AGA – Annotated Model Grant Agreement Version 2. 1 30 October 2015 Disclaimer This guide is aimed at assisting beneficiaries. It is provided for information purposes only and is not intended to replace consultation of any applicable legal sources. Neither the Commission nor the Agencies (or any person acting on their behalf) can be held responsible for the use made of this guidance document. 2 HISTORY OF CHANGES Version Publication date Changes 1.0 20.12.2013  Initial version. Article 6. 1.2 17.02.2014  Articles 7 to 14, 17 to 19, 23a to 25, 35, 52 to 54, 56 and 58 added 1.3 26.03.2014  Articles 16, 32 to 34 and 41 to 44 added 1.4 16.04.2014  Articles 4 to 6, 9 to 16, 20, 21, 23, 24, 39, 40, 45 to 52 and 57 added or revised 1.5 25.04.2014  Articles 22, 26 to 31, 36 to 38, and 55 added 1.6 02.05.2014  New annotations for: ERC, SME Instrument, ERA-NET COFUND, PCP-PPI COFUND, EJP COFUND, Framework Partnership and Specific Agreements 1.6.1 16.06.2014  Clickable table of contents added 1.6.2 17.07.2014  Links to time-sheet model and declaration model for personnel costs 1.6.3 20.08.2014  Changed link to Main Work Programme – MSCA (page 55) 1.7 19.12.2014  Updates due to the amendment of the model grant agreement, in particular Articles 3, 9, 20.6 and 38.1.2  New annotations on Articles 6.2.A, 6.2.E, 6.2.F, 22.4, 22.5  New explanations and examples resulting from frequently asked questions, in particular in Articles 2, 6.1, 6.2.D.2, 6.2.D.3, 6.3, 6.4, 6.5, 10, 13, 14, 18, 20.4, 34, 39, 41.5, 43, 49.1, 50.3, 55 and 57;  Updates in the derived model grant agreements: - ERC: Articles 2, 4, 6.2, 8, 32, 56.1 and 56.a - SME: Articles 2, 5.4, 8, 21, 41, 42, 43, 44, 50 Ph1 and Article 2, 4 and 6 Ph2 - ERA-NET Co-fund: Article 4, 6.2.B and 13 (option for PCP) - EJP Co-fund: Article 4, 6.2  New Annotations for the MSCA  Other minor corrections and clarifications  Improved clickable table of contents including Articles 2.0 30.03.2015  Reformatting into the style of the Online AGA. Streamlined approach to information with exclamation mark, and info sign; presentation in yellow and blue text boxes.  Clickable cross-references (Articles)  New table explaining the treatment of the different types of work contracts (under Article 6.2.A).  New explanations and examples resulting from frequently asked questions, in particular in Articles 2, 3, 6.2.A, 6.2.D, 6.2.E, 6.2.F, 13, 18.2, 21, 27, 28.3, 29, 30, 38, 41, 47 and substantial updates in Article 55.  Updates in the derived model grant agreements:  ERC: ERC GA preamble, Article 56a  MSCA: ITN Articles 6.2, 19.2, 32; IF Articles 6.2, 8, 32; RISE Articles 6.2, 19; Co-fund Articles 6.2, 15, 19  FPA: Article 13; SGA: Article 17  Other minor corrections and clarifications 2.0.1 18.05.2015  Corrigendum of annotations on Article 4 of the MSCA-ITN and the MSCA-RISE grants 2.1 30.10.2015  New explanations and examples resulting from frequently asked questions, in particular in Articles 5.2, 6.1, 6.2.A, 6.2.D, 6.5, 9, 11, 12, 13, 14, 20, 21, 22.2, 24, 26, 29, 30, 31, 34, 40, 43, 47, 3 50, 55 and 56.  New Section I.3 'List of issues applicable to particular countries' added — explanations on eligibility of national taxes, bonuses  New annotations and updates in the derived model grant agreements:  ERC MGA: Preamble, Articles 6, 8, 18, 29 and 56a  MSCA: ITN Articles 4, 6.2, 8, 31; 32, IF Articles 4, 6.1, 6.2, 8, 31, 32; 56a RISE Articles 4, 6.2, 8, 18; 31 Co-fund Articles 4, 6.2, 8, 15  SME Instrument Phase 1: Article 5;  SME Instrument Phase 2: Article 13;  ERA-NET Co-fund: Articles 5.2, 6.2.A and 20;  FPA: Article 5;  MGA Lump sum: new annotations.  Other minor corrections and clarifications. For easy identification, paragraphs, indents or sections with new interpretations are marked with the symbol on the left. 4 . IMPORTANT NOTICE The ‘AGA — Annotated Model Grant Agreement’ is a user guide that aims to explain to applicants and beneficiaries the General Model Grant Agreement (‘General MGA’) and the different specific Model Grant Agreements (‘Specific MGAs’) for the Horizon 2020 Framework Programme for 2014-2020. The purpose of this document is to help users understand and interpret the GAs, by avoiding technical vocabulary, legal references and jargon, and seeking to help readers find answers to any practical questions they may have about particular parts of the GAs. In the same spirit, the document’s structure mirrors that of the GAs. It explains each GA Article and includes examples where appropriate. Since the Specific MGAs have a similar set-up and provisions as the General MGA (i.e. they are all derived from the General MGA), the annotations will focus mainly on the General MGA (and the annotations of the other MGAs will be limited to major differences from that MGA). The key provisions on the amount, cost forms and conditions for eligibility of your grant are however explained for all MGAs (see Articles 4-6 of each MGA). The annotations are — with some exceptions — done on the multi-beneficiary versions. The multi- and mono-beneficiary versions are largely identical. Our approach 1. The text of the article appears in a grey text box — to differentiate it from the annotations. The concepts that are annotated are in bold and underlined. The annotations to the article are immediately underneath. Long articles are split into different parts, so the annotations can be placed below the relevant parts. Examples, best practices are in bold and green. Lists and procedures are in bold and red. Specific cases and exceptions are in bold and orange. New explanations (compared to the last update) will be marked with: 2. As the AGA intends to be comprehensive, it will cover all possible options envisaged in the different GA articles. Many of these options may not be relevant to your grant (and will not appear in the grant agreement you sign, or will be marked ‘not applicable’). The chosen options will appear in italics (without brackets and without the option title), to allow you to easily spot that a specific rule applies. Updates With version 2.0, the AGA was reformatted into a clickable online version. It will be periodically updated with new examples and explanations, based on practical experience and on- going developments. Other information The AGA is limited to annotations to the provisions of the Horizon 2020 MGAs. For a more general overview of how Horizon 2020 grants work, see the Online Manual. A comprehensive list of all Horizon 2020 reference documents (including legislation, work programme and templates) can be found on the Participant Portal Reference documents page. Horizon 2020 terms are explained in the Participant Portal Glossary. If necessary, you can also contact the Horizon 2020 Helpdesk. 5 H2020 legislation H2020 Framework Programme — Regulation (EU) No 1291/2013 of the European Parliament and of the Council of 11 December 2013 establishing Horizon 2020 - The Framework Programme for Research and Innovation (2014-2020) (OJ 347, 20.12.2013, p. 104). Euratom Research and Training Programme (2014-2018) — Council Regulation (Euratom) No 1314/2013 of 16 December 2013 on the Research and Training Programme of the European Atomic Energy Community (2014-2018) complementing the Horizon 2020 – The Framework Programme for Research and Innovation (OJ L 347, 20.12.2013, p. 948). H2020 Specific Programme — Council Decision 2013/743/EU of 3 December 2013 establishing the Specific Programme Implementing Horizon 2020 - The Framework Programme for Research and Innovation (2014-2020) (OJ L 347, 20.12.2013, p. 965). Rules for Participation (RfP) — Regulation (EU) No 1290/2013 of the European Parliament and of the Council of 11 of December 2013 laying down the rules for the participation and dissemination in Horizon 2020 – the Framework Programme for Research and Innovation (2014-2020) (OJ L 347, 20.12.2013, p.81). Financial Regulation (FR) — Regulation (EC, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the European Union (OJ L 298, 26.10.2012, p.1). Rules of Application (RAP) — Commission Regulation (EC, Euratom) No 1268/2012 of 29 October 2012 on the rules of application of l Regulation (EC, Euratom) No 966/2012 of the European Parliament and of the Council on the financial rules applicable to the general budget of the Union (OJ L 298, 26.10.2012, p.1). 6 TABLE OF CONTENTS I. GENERAL MODEL GRANT AGREEMENT (GENERAL MGA) 12 I.1 General MGA: Background information ....................................................................................................................................................................... 12 I.2 General MGA: Annotations .............................................................................................................................................................................................. 13 CHAPTER 1 GENERAL 16 ARTICLE 1 — SUBJECT OF THE AGREEMENT....................................................................................................................................................... 16 CHAPTER 2 ACTION 17 ARTICLE 2 — ACTION TO BE IMPLEMENTED [— COMPLEMENTARY GRANT] [— JOINTLY FUNDED ACTION] ............................. 17 ARTICLE 3 — DURATION AND STARTING DATE OF THE ACTION ................................................................................................................. 19 ARTICLE 4 — ESTIMATED BUDGET AND BUDGET TRANSFERS ..................................................................................................................... 20 CHAPTER 3 GRANT 24 ARTICLE 5 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATES AND FORMS OF COSTS .......................................... 24 ARTICLE 6 — ELIGIBLE AND INELIGIBLE COSTS ................................................................................................................................................ 35 CHAPTER 4 RIGHTS AND OBLIGATIONS OF THE PARTIES 111 SECTION 1 RIGHTS AND OBLIGATIONS RELATED TO IMPLEMENTING THE ACTION 111 ARTICLE 7 — GENERAL OBLIGATION TO PROPERLY IMPLEMENT THE ACTION .................................................................................. 111 ARTICLE 8 — RESOURCES TO IMPLEMENT THE ACTION — THIRD PARTIES INVOLVED IN THE ACTION .................................. 112 ARTICLE 9 — IMPLEMENTATION OF ACTION TASKS BY BENEFICIARIES NOT RECEIVING EU FUNDING ................................... 116 ARTICLE 10 — PURCHASE OF GOODS, WORKS OR SERVICES ................................................................................................................... 119 ARTICLE 11 — USE OF IN-KIND CONTRIBUTIONS PROVIDED BY THIRD PARTIES AGAINST PAYMENT..................................... 122 ARTICLE 12 — USE OF IN-KIND CONTRIBUTIONS PROVIDED BY THIRD PARTIES FREE OF CHARGE......................................... 125 ARTICLE 13 — IMPLEMENTATION OF ACTION TASKS BY SUBCONTRACTORS .................................................................................... 128 ARTICLE 14 — IMPLEMENTATION OF ACTION TASKS BY LINKED THIRD PARTIES ............................................................................ 134 ARTICLE 15 — FINANCIAL SUPPORT TO THIRD PARTIES ............................................................................................................................. 139 ARTICLE 16 — PROVISION OF TRANS-NATIONAL OR VIRTUAL ACCESS TO RESEARCH INFRASTRUCTURE .................... 144 SECTION 2 RIGHTS AND OBLIGATIONS RELATED TO THE GRANT ADMINISTRATION 151 ARTICLE 17 — GENERAL OBLIGATION TO INFORM ....................................................................................................................................... 151 ARTICLE 18 — KEEPING RECORDS — SUPPORTING DOCUMENTATION ................................................................................................. 154 ARTICLE 19 — SUBMISSION OF DELIVERABLES ............................................................................................................................................. 162 ARTICLE 20 — REPORTING — PAYMENT REQUESTS ..................................................................................................................................... 163 ARTICLE 21 — PAYMENTS AND PAYMENT ARRANGEMENTS ..................................................................................................................... 174 ARTICLE 22 — CHECKS, REVIEWS, AUDITS AND INVESTIGATIONS — EXTENSION OF FINDINGS ............................................... 181 ARTICLE 23 — EVALUATION OF THE IMPACT OF THE ACTION .................................................................................................................. 197 SECTION 3 RIGHTS AND OBLIGATIONS RELATED TO BACKGROUND AND RESULTS 198 ARTICLE 23a — MANAGEMENT OF INTELLECTUAL PROPERTY ................................................................................................................. 198 ARTICLE 24 — AGREEMENT ON BACKGROUND............................................................................................................................................... 199 ARTICLE 25 — ACCESS RIGHTS TO BACKGROUND ........................................................................................................................................ 201 ARTICLE 26 — OWNERSHIP OF RESULTS .......................................................................................................................................................... 204 ARTICLE 27 — PROTECTION OF RESULTS — VISIBILITY OF EU FUNDING ............................................................................................ 208 ARTICLE 28 — EXPLOITATION OF RESULTS ..................................................................................................................................................... 211 ARTICLE 29 — DISSEMINATION OF RESULTS — OPEN ACCESS — VISIBILITY OF EU FUNDING .................................................. 213 ARTICLE 30 — TRANSFER AND LICENSING OF RESULTS ............................................................................................................................ 221 ARTICLE 31 — ACCESS RIGHTS TO RESULTS ................................................................................................................................................... 226 SECTION 4 OTHER RIGHTS AND OBLIGATIONS 231 7 ARTICLE 32 — RECRUITMENT AND WORKING CONDITIONS FOR RESEARCHERS .............................................................................. 231 ARTICLE 33 — GENDER EQUALITY ....................................................................................................................................................................... 234 ARTICLE 34 — ETHICS ............................................................................................................................................................................................... 235 ARTICLE 35 — CONFLICT OF INTERESTS ........................................................................................................................................................... 239 ARTICLE 36 — CONFIDENTIALITY ......................................................................................................................................................................... 241 ARTICLE 37 — SECURITY-RELATED OBLIGATIONS ........................................................................................................................................ 243 ARTICLE 38 — PROMOTING THE ACTION — VISIBILITY OF EU FUNDING ............................................................................................. 245 ARTICLE 39 — PROCESSING OF PERSONAL DATA ......................................................................................................................................... 250 ARTICLE 40 — ASSIGNMENTS OF CLAIMS FOR PAYMENT AGAINST THE [COMMISSION][AGENCY] ........................................... 254 CHAPTER 5 DIVISION OF BENEFICIARIES’ ROLES AND RESPONSIBILITIES — RELATIONSHIP WITH COMPLEMENTARY BENEFICIARIES — RELATIONSHIP WITH PARTNERS OF A JOINT ACTION 255 ARTICLE 41 — DIVISION OF BENEFICIARIES’ ROLES AND RESPONSIBILITIES — RELATIONSHIP WITH COMPLEMENTARY BENEFICIARIES — RELATIONSHIP WITH PARTNERS OF A JOINT ACTION ................. 255 CHAPTER 6 REJECTION OF COSTS — REDUCTION OF THE GRANT — RECOVERY — PENALTIES — DAMAGES — SUSPENSION — TERMINATION — FORCE MAJEURE 263 SECTION 1 REJECTION OF COSTS — REDUCTION OF THE GRANT — RECOVERY — PENALTIES 263 ARTICLE 42 — REJECTION OF INELIGIBLE COSTS ......................................................................................................................................... 263 ARTICLE 43 — REDUCTION OF THE GRANT ...................................................................................................................................................... 267 ARTICLE 44 — RECOVERY OF UNDUE AMOUNTS ........................................................................................................................................... 272 ARTICLE 45 — ADMINISTRATIVE AND FINANCIAL PENALTIES .................................................................................................................. 282 SECTION 2 LIABILITY FOR DAMAGES 286 ARTICLE 46 — LIABILITY FOR DAMAGES ........................................................................................................................................................... 286 SECTION 3 SUSPENSION AND TERMINATION 289 ARTICLE 47 — SUSPENSION OF PAYMENT DEADLINE ................................................................................................................................. 289 ARTICLE 48 — SUSPENSION OF PAYMENTS .................................................................................................................................................... 292 ARTICLE 49 — SUSPENSION OF THE ACTION IMPLEMENTATION ............................................................................................................ 295 ARTICLE 50 — TERMINATION OF THE AGREEMENT OR OF THE PARTICIPATION OF ONE OR MORE BENEFICIARIES .......... 300 SECTION 4 FORCE MAJEURE 316 ARTICLE 51 — FORCE MAJEURE ........................................................................................................................................................................... 316 CHAPTER 7 FINAL PROVISIONS 318 ARTICLE 52 — COMMUNICATION BETWEEN THE PARTIES ......................................................................................................................... 318 ARTICLE 53 — INTERPRETATION OF THE AGREEMENT ................................................................................................................................ 321 ARTICLE 54 — CALCULATION OF PERIODS, DATES AND DEADLINES .................................................................................................... 322 ARTICLE 55 — AMENDMENTS TO THE AGREEMENT ...................................................................................................................................... 323 ARTICLE 56 — ACCESSION TO THE AGREEMENT ........................................................................................................................................... 334 ARTICLE 57 — APPLICABLE LAW AND SETTLEMENT OF DISPUTES ........................................................................................................ 337 ARTICLE 58 — ENTRY INTO FORCE OF THE AGREEMENT ............................................................................................................................ 341 I.3 Specific issues per country .......................................................................................................................................................................................... 342 II. ERC MGAS 343 II.1 Background information and approach .................................................................................................................................................................. 343 II.2 H2020 ERC MGA: Annotations ................................................................................................................................................................................... 345 ARTICLE 2 — ACTION TO BE IMPLEMENTED .................................................................................................................................................... 348 ARTICLE 4 — ESTIMATED BUDGET AND BUDGET TRANSFERS .................................................................................................................. 349 ARTICLE 5 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATE AND FORMS OF COSTS .......................................... 350 ARTICLE 6 — ELIGIBLE AND INELIGIBLE COSTS ............................................................................................................................................. 352 ARTICLE 8 — RESOURCES TO IMPLEMENT THE ACTION — THIRD PARTIES INVOLVED IN THE ACTION .................................. 354 8 ARTICLE 18 — KEEPING RECORDS — SUPPORTING DOCUMENTATION ................................................................................................. 355 ARTICLE 20 — REPORTING — PAYMENT REQUESTS ..................................................................................................................................... 357 ARTICLE 26 — OWNERSHIP OF RESULTS .......................................................................................................................................................... 361 ARTICLE 29 — DISSEMINATION OF RESULTS — OPEN ACCESS — VISIBILITY OF EU FUNDING .................................................. 362 ARTICLE 32 — WORKING CONDITIONS FOR THE PRINCIPAL INVESTIGATOR[S] AND [HIS/HER][THEIR] TEAM ....................... 365 ARTICLE 38 — PROMOTING THE ACTION — VISIBILITY OF EU FUNDING ............................................................................................. 369 ARTICLE 56 — ACCESSION TO THE AGREEMENT ........................................................................................................................................... 370 ARTICLE 56a — TRANSFER OF THE AGREEMENT TO A NEW BENEFICIARY — PORTABILITY OF THE GRANT ......................... 371 II.3 H2020 ERC MGA PoC: Annotations ........................................................................................................................................................................... 373 ARTICLE 2 — ACTION TO BE IMPLEMENTED .................................................................................................................................................... 374 ARTICLE 20 — REPORTING — PAYMENT REQUESTS ..................................................................................................................................... 375 III. MARIE SKŁODOWSKA-CURIE (MSCA) MGAS 379 III.1 Background information and approach ................................................................................................................................................................. 379 III.2 H2020 MGA MSCA-ITN: Annotations ...................................................................................................................................................................... 382 ARTICLE 2 — ACTION TO BE IMPLEMENTED .................................................................................................................................................... 382 ARTICLE 4 — ESTIMATED BUDGET AND BUDGET TRANSFERS .................................................................................................................. 383 ARTICLE 5 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATES AND FORMS OF COSTS ....................................... 385 ARTICLE 6 — ELIGIBLE AND INELIGIBLE COSTS ............................................................................................................................................. 387 ARTICLE 8 — RESOURCES TO IMPLEMENT THE ACTION — THIRD PARTIES INVOLVED IN THE ACTION .................................. 398 ARTICLE 18 — KEEPING RECORDS — SUPPORTING DOCUMENTATION ................................................................................................. 399 ARTICLE 19 — SUBMISSION OF DELIVERABLES ............................................................................................................................................. 400 ARTICLE 25 — ACCESS RIGHTS TO BACKGROUND ........................................................................................................................................ 402 ARTICLE 31 — ACCESS RIGHTS TO RESULTS ................................................................................................................................................... 402 ARTICLE 32 — RECRUITMENT AND WORKING CONDITIONS FOR RECRUITED RESEARCHERS ...................................................... 403 ARTICLE 38 — PROMOTING THE ACTION — VISIBILITY OF EU FUNDING ............................................................................................. 407 III.3 H2020 MGA MSCA-IF: Annotations ......................................................................................................................................................................... 409 ARTICLE 2 — ACTION TO BE IMPLEMENTED .................................................................................................................................................... 409 ARTICLE 3 — DURATION AND STARTING DATE OF THE ACTION .............................................................................................................. 410 ARTICLE 4 — ESTIMATED BUDGET AND BUDGET TRANSFERS .................................................................................................................. 411 ARTICLE 5 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATES AND FORMS OF COSTS ....................................... 412 ARTICLE 6 – ELIGIBLE AND INELIGIBLE COSTS .............................................................................................................................................. 414 ARTICLE 8 — RESOURCES TO IMPLEMENT THE ACTION — THIRD PARTIES INVOLVED IN THE ACTION .................................. 424 ARTICLE 18 — KEEPING RECORDS — SUPPORTING DOCUMENTATION ................................................................................................. 425 ARTICLE 25 — ACCESS RIGHTS TO BACKGROUND ........................................................................................................................................ 425 ARTICLE 31 — ACCESS RIGHTS TO RESULTS ................................................................................................................................................... 426 ARTICLE 32 — RECRUITMENT AND WORKING CONDITIONS FOR THE RECRUITED RESEARCHER ............................................... 427 ARTICLE 38 — PROMOTING THE ACTION — VISIBILITY OF EU FUNDING ............................................................................................. 431 ARTICLE 49 — SUSPENSION OF THE ACTION IMPLEMENTATION ............................................................................................................ 433 ARTICLE 55 — AMENDMENTS TO THE AGREEMENT ...................................................................................................................................... 435 ARTICLE 56a — TRANSFER OF THE AGREEMENT TO A NEW BENEFICIARY ......................................................................................... 436 III.4 H2020 MGA MSCA-RISE: Annotations .................................................................................................................................................................... 438 ARTICLE 2 — ACTION TO BE IMPLEMENTED .................................................................................................................................................... 438 ARTICLE 4 — ESTIMATED BUDGET AND BUDGET TRANSFERS .................................................................................................................. 439 ARTICLE 5 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATES AND FORMS OF COSTS ....................................... 441 ARTICLE 6 — ELIGIBLE AND INELIGIBLE COSTS ............................................................................................................................................. 443 9 ARTICLE 8 — RESOURCES TO IMPLEMENT THE ACTION — THIRD PARTIES INVOLVED IN THE ACTION .................................. 452 ARTICLE 18 — KEEPING RECORDS — SUPPORTING DOCUMENTATION ................................................................................................. 453 ARTICLE 19 — SUBMISSION OF DELIVERABLES ............................................................................................................................................. 454 ARTICLE 25 — ACCESS RIGHTS TO BACKGROUND ........................................................................................................................................ 456 ARTICLE 31 — ACCESS RIGHTS TO RESULTS ................................................................................................................................................... 456 ARTICLE 32 — RECRUITMENT AND WORKING CONDITIONS FOR SECONDED STAFF MEMBERS ................................................. 457 ARTICLE 38 — PROMOTING THE ACTION — VISIBILITY OF EU FUNDING ............................................................................................. 460 III.5 H2020 MGA MSCA-COFUND: Annotations ............................................................................................................................................................ 462 ARTICLE 2 — ACTION TO BE IMPLEMENTED .................................................................................................................................................... 462 ARTICLE 4 — ESTIMATED BUDGET AND BUDGET TRANSFERS .................................................................................................................. 463 ARTICLE 5 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATES AND FORMS OF COSTS ....................................... 464 ARTICLE 6 — ELIGIBLE AND INELIGIBLE COSTS ............................................................................................................................................. 466 ARTICLE 8 — RESOURCES TO IMPLEMENT THE ACTION — THIRD PARTIES INVOLVED IN THE ACTION .................................. 472 ARTICLE 15 — FINANCIAL SUPPORT TO OR IMPLEMENTATION OF [DOCTORAL] [FELLOWSHIP] PROGRAMMES .................. 473 ARTICLE 18 — KEEPING RECORDS — SUPPORTING DOCUMENTATION ................................................................................................. 480 ARTICLE 19 — SUBMISSION OF DELIVERABLES ............................................................................................................................................. 481 ARTICLE 38 — PROMOTING THE ACTION — VISIBILITY OF EU FUNDING ............................................................................................. 482 IV. SME INSTRUMENT MGAS 484 IV.1 Background information and approach ................................................................................................................................................................. 484 IV.2 H2020 MGA SME Ph1: Annotations ........................................................................................................................................................................ 486 ARTICLE 2 — ACTION TO BE IMPLEMENTED .................................................................................................................................................... 486 ARTICLE 4 — ESTIMATED BUDGET AND BUDGET TRANSFERS .................................................................................................................. 487 ARTICLE 5 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATE AND FORM OF COSTS............................................. 488 ARTICLE 6 — ELIGIBLE AND INELIGIBLE COSTS ............................................................................................................................................. 491 ARTICLE 7 — GENERAL OBLIGATION TO PROPERLY IMPLEMENT THE ACTION .................................................................................. 493 ARTICLE 8 — RESOURCES TO IMPLEMENT THE ACTION—THIRD PARTIES INVOLVED IN THE ACTION ..................................... 494 ARTICLE 10 — PURCHASE OF GOODS, WORKS OR SERVICES ................................................................................................................... 495 ARTICLE 13 — IMPLEMENTATION OF ACTION TASKS BY SUBCONTRACTORS .................................................................................... 496 ARTICLE 18 — KEEPING RECORDS — SUPPORTING DOCUMENTATION ................................................................................................. 497 ARTICLE 20 — REPORTING — PAYMENT REQUESTS ..................................................................................................................................... 498 ARTICLE 21 — PAYMENTS AND PAYMENT ARRANGEMENTS ..................................................................................................................... 500 ARTICLE 36 — CONFIDENTIALITY ......................................................................................................................................................................... 503 ARTICLE 38 — PROMOTING THE ACTION — VISIBILITY OF EU FUNDING ............................................................................................. 504 ARTICLE 41 — DIVISION OF THE BENEFICIARY’S ROLES AND RESPONSIBILITIES — RELATIONSHIP WITH COMPLEMENTARY BENEFICIARIES — RELATIONSHIP WITH PARTNERS OF A JOINT ACTION ................. 506 ARTICLE 42 — REJECTION OF INELIGIBLE COSTS ......................................................................................................................................... 508 ARTICLE 43 — REDUCTION OF THE GRANT ...................................................................................................................................................... 509 ARTICLE 44 — RECOVERY OF UNDUE AMOUNTS ........................................................................................................................................... 510 ARTICLE 50 — TERMINATION OF THE AGREEMENT OR OF THE PARTICIPATION OF ONE OR MORE BENEFICIARIES .......... 514 IV.3 H2020 MGA SME Ph2: Annotations ........................................................................................................................................................................ 521 ARTICLE 2 — ACTION TO BE IMPLEMENTED .................................................................................................................................................... 521 ARTICLE 4 — ESTIMATED BUDGET AND BUDGET TRANSFERS .................................................................................................................. 522 ARTICLE 5 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATE AND FORMS OF COSTS .......................................... 523 ARTICLE 6 — ELIGIBLE AND INELIGIBLE COSTS ............................................................................................................................................. 525 ARTICLE 8 — RESOURCES TO IMPLEMENT THE ACTION – THIRD PARTIES INVOLVED IN THE ACTION .................................... 526 10 ARTICLE 13 — IMPLEMENTATION OF ACTION TASKS BY SUBCONTRACTORS .................................................................................... 527 ARTICLE 20 — REPORTING — PAYMENT REQUESTS ..................................................................................................................................... 530 ARTICLE 26 — OWNERSHIP OF RESULTS .......................................................................................................................................................... 531 V. ERA-NET COFUND MGA 532 V.1 Background information and approach .................................................................................................................................................................. 532 V.2 H2020 MGA ERA-NET Cofund: Annotations ........................................................................................................................................................... 533 ARTICLE 2 — ACTION TO BE IMPLEMENTED [— COMPLEMENTARY GRANT] [— JOINTLY FUNDED ACTION] .......................... 533 ARTICLE 3 — DURATION AND STARTING DATE OF THE ACTION .............................................................................................................. 535 ARTICLE 4 — ESTIMATED BUDGET AND BUDGET TRANSFERS .................................................................................................................. 536 ARTICLE 5 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATE AND FORMS OF COSTS .......................................... 538 ARTICLE 6 — ELIGIBLE AND INELIGIBLE COSTS ............................................................................................................................................. 540 ARTICLE 8 — RESOURCES TO IMPLEMENT THE ACTION — THIRD PARTIES INVOLVED IN THE ACTION .................................. 548 ARTICLE 15 — SUPPORT TO OR IMPLEMENTATION OF TRANS-NATIONAL PROJECTS .................................................................... 549 ARTICLE 19 — SUBMISSION OF DELIVERABLES ............................................................................................................................................. 552 ARTICLE 20 — REPORTING — PAYMENT REQUESTS ..................................................................................................................................... 554 ARTICLE 21 — PAYMENTS AND PAYMENT ARRANGEMENTS ..................................................................................................................... 558 VI. PCP-PPI COFUND MGA 560 VI.1 Background information and approach ................................................................................................................................................................. 560 VI.2 H2020 MGA PCP-PPI Cofund: Annotations ........................................................................................................................................................... 561 ARTICLE 2 — ACTION TO BE IMPLEMENTED [— COMPLEMENTARY GRANT] [— JOINTLY FUNDED ACTION] .......................... 561 ARTICLE 4 — ESTIMATED BUDGET AND BUDGET TRANSFERS .................................................................................................................. 563 ARTICLE 5 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATE AND FORMS OF COSTS .......................................... 565 ARTICLE 6 — ELIGIBLE AND INELIGIBLE COSTS ............................................................................................................................................. 567 ARTICLE 8 — RESOURCES TO IMPLEMENT THE ACTION — THIRD PARTIES INVOLVED IN THE ACTION .................................. 576 ARTICLE 13 — IMPLEMENTATION OF ACTION TASKS BY SUBCONTRACTORS .................................................................................... 577 ARTICLE 19 — SUBMISSION OF DELIVERABLES ............................................................................................................................................. 596 ARTICLE 20 — REPORTING — PAYMENT REQUESTS ..................................................................................................................................... 598 ARTICLE 21 — PAYMENTS AND PAYMENT ARRANGEMENTS ..................................................................................................................... 602 ARTICLE 22 — CHECKS, REVIEWS, AUDITS AND INVESTIGATIONS — EXTENSION OF FINDINGS ............................................... 604 VII. EJP COFUND MGA 605 VII.1 Background information and approach................................................................................................................................................................ 605 VII.2 H2020 MGA EJP Cofund: Annotations .................................................................................................................................................................. 606 ARTICLE 2 — ACTION TO BE IMPLEMENTED [— COMPLEMENTARY GRANT] [— JOINTLY FUNDED ACTION] .......................... 606 ARTICLE 3 — DURATION AND STARTING DATE OF THE ACTION .............................................................................................................. 607 ARTICLE 4 — ESTIMATED BUDGET AND BUDGET TRANSFERS .................................................................................................................. 608 ARTICLE 5 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATE AND FORMS OF COSTS .......................................... 609 ARTICLE 6 — ELIGIBLE AND INELIGIBLE COSTS ............................................................................................................................................. 611 ARTICLE 8 — RESOURCES TO IMPLEMENT THE ACTION — THIRD PARTIES INVOLVED IN THE ACTION .................................. 623 ARTICLE 19 — SUBMISSION OF DELIVERABLES ............................................................................................................................................. 624 ARTICLE 20 — REPORTING — PAYMENT REQUESTS ..................................................................................................................................... 626 ARTICLE 21 — PAYMENTS AND PAYMENT ARRANGEMENTS ..................................................................................................................... 627 VIII. FRAMEWORK PARTNERSHIPS AND SPECIFIC AGREEMENTS 629 VIII.1 Background information and approach .............................................................................................................................................................. 629 VIII.2 H2020 FPA: Annotations ......................................................................................................................................................................................... 633 11 CHAPTER 1 GENERAL 636 ARTICLE 1 — SUBJECT MATTER OF THE AGREEMENT .................................................................................................................................. 636 CHAPTER 2 FRAMEWORK PARTNERSHIP 637 ARTICLE 2 — ACTION PLAN — AWARD OF SPECIFIC GRANTS — SPECIFIC AGREEMENTS ............................................................. 637 ARTICLE 3 — DURATION AND STARTING DATE OF THE FRAMEWORK PARTERNSHIP ...................................................................... 640 ARTICLE 4 — RIGHTS AND OBLIGATIONS UNDER THE FRAMEWORK PARTNERSHIP ........................................................................ 641 ARTICLE 5 — SUSPENSION OF FRAMEWORK PARTNERSHIP IMPLEMENTATION ............................................................................... 642 ARTICLE 6 — TERMINATION OF THE FRAMEWORK PARTNERSHIP AGREEMENT OR OF THE PARTICIPATION OF ONE OR MORE PARTNERS ............................................................................................................................................................ 643 ARTICLE 9 — ESTIMATED BUDGET AND BUDGET TRANSFERS .................................................................................................................. 645 ARTICLE 10 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATES AND FORMS OF COSTS..................................... 646 ARTICLE 11 — ELIGIBLE AND INELIGIBLE COSTS .......................................................................................................................................... 649 ARTICLE 13 — RESOURCES TO IMPLEMENT THE SPECIFIC ACTIONS — THIRD PARTIES INVOLVED IN THE SPECIFIC ACTIONS ................................................................................................................................................................................... 650 ARTICLE 62 — ACCESSION TO THE FRAMEWORK PARTNERSHIP AGREEMENT AND THE SPECIFIC AGREEMENTS ............... 651 VIII.3 H2020 SGA: Annotations ......................................................................................................................................................................................... 653 ARTICLE 17 — PAYMENTS AND PAYMENT ARRANGEMENTS ..................................................................................................................... 656 IX. H2020 MGA LUMP SUM 657 IX.1 Background information and approach ................................................................................................................................................................. 657 IX.2 MGA lump sum: annotations ..................................................................................................................................................................................... 658 ARTICLE 4 — ESTIMATED BUDGET AND BUDGET TRANSFERS .................................................................................................................. 658 ARTICLE 5 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATE AND FORM OF COSTS............................................. 660 ARTICLE 5 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATES AND FORMS OF COSTS .............. 660 ARTICLE 6 — ELIGIBLE AND INELIGIBLE COSTS ............................................................................................................................................. 663 ARTICLE 7 — GENERAL OBLIGATION TO PROPERLY IMPLEMENT THE ACTION .................................................................................. 665 ARTICLE 8 — RESOURCES TO IMPLEMENT THE ACTION—THIRD PARTIES INVOLVED IN THE ACTION ..................................... 666 ARTICLE 10 — PURCHASE OF GOODS, WORKS OR SERVICES ................................................................................................................... 667 ARTICLE 13 — IMPLEMENTATION OF ACTION TASKS BY SUBCONTRACTORS .................................................................................... 668 ARTICLE 18 — KEEPING RECORDS — SUPPORTING DOCUMENTATION ................................................................................................. 669 ARTICLE 20 — REPORTING — PAYMENT REQUESTS ..................................................................................................................................... 671 ARTICLE 21 — PAYMENTS AND PAYMENT ARRANGEMENTS ..................................................................................................................... 674 ARTICLE 41 — DIVISION OF THE BENEFICIARY’S ROLES AND RESPONSIBILITIES — RELATIONSHIP WITH COMPLEMENTARY BENEFICIARIES — RELATIONSHIP WITH PARTNERS OF A JOINT ACTION ................. 680 ARTICLE 42 — REJECTION OF INELIGIBLE COSTS ......................................................................................................................................... 682 ARTICLE 43 — REDUCTION OF THE GRANT ...................................................................................................................................................... 683 ARTICLE 44 — RECOVERY OF UNDUE AMOUNTS ........................................................................................................................................... 684 ARTICLE 49 — SUSPENSION OF THE ACTION IMPLEMENTATION ............................................................................................................ 689 ARTICLE 50 — TERMINATION OF THE AGREEMENT OR OF THE PARTICIPATION OF ONE OR MORE BENEFICIARIES .......... 691 H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 12 I. GENERAL MODEL GRANT AGREEMENT (H2020 GENERAL MGA) I.1 Background information The General Model Grant Agreement (H2020 General MGA) is used for grants for ‘research and innovation actions (RIA)’, ‘innovation actions (IA)’ and ‘coordination and support actions (CSA)’. Examples: actions under Part III, Societal challenge 3 ‘Secure, clean and efficient energy’ (see a Smart Cities and Communities call); actions under Part I, ‘Research infrastructures’ (see a Research Infrastructure call); actions under Part III, Societal challenge 1‘Health, Demographic Change and Wellbeing’ , etc. The General MGA is NOT used for actions that fall under one of the Specific MGAs (i.e. Lump sum MGA, ERC MGAs, MSCA MGAs, SME Instrument MGAs, ERA-NET Cofund MGA, PCP/PPI Cofund MGA, EJP Cofund MGA or Framework Partnerships). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 13 I.2 H2020 General MGA: Annotations GRANT AGREEMENT NUMBER [insert number] — [insert acronym] This Agreement (‘the Agreement’) is between the following parties: on the one part, [OPTION 1: the European Union (‘the EU’, represented by the European Commission (‘the Commission) 2 ,] [OPTION 2: the European Atomic Energy Community (‘Euratom’), represented by the European Commission (‘the Commission’) 3 ,] [OPTION 3: the [Research Executive Agency (REA)] [European Research Council Executive Agency (ERCEA)] [Innovation and Networks Executive Agency (INEA)] [Executive Agency for Small and Medium-sized Enterprises (EASME)] (‘the Agency’), under the powers delegated by the European Commission (‘the Commission’) 4 ,] represented for the purposes of signature of this Agreement by [[function, [Directorate-General, Directorate, Unit] [Department]], [forename and surname], 5 and on the other part, 1. ‘the coordinator’: [full official name (short name)][legal form], [official registration No], established in [official address in full], [VAT number], [OPTION for coordinators not receiving EU funding: as ‘beneficiary not receiving EU funding’ (see Article 9),] represented for the purposes of signing the Agreement by [function, forename and surname] and the following other beneficiaries, if they sign their ‘Accession Form’ (see Annex 3 and Article 56): 2. [full official name (short name)][legal form], [official registration No], established in [official address in full] [VAT number], [OPTION for beneficiaries not receiving EU funding: X. [full official name (short name)] [legal form], [official registration No], established in [official address in full] [VAT number], as ‘beneficiary not receiving EU funding’ (see Article 9),] [same for each beneficiary] [OPTION if the JRC is a beneficiary: and X. the Joint Research Centre (JRC) established in [official address in full], if it signs the Administrative Arrangement (see Annex 3b)]. Unless otherwise specified, references to ‘beneficiary’ or ‘beneficiaries’ include the coordinator [OPTION if the JRC participates: and the Joint Research Centre (JRC)]. The parties referred to above have agreed to enter into the Agreement under the terms and conditions below. By signing the Agreement or the Accession Form [OPTION if the JRC is a beneficiary: or the Administrative Arrangement], the beneficiaries accept the grant and agree to implement it under their own responsibility and in accordance with the Agreement, with all the obligations and conditions it sets out. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 14 1. Coordinator — Beneficiaries ‘Beneficiaries’ means the legal entities who have signed the Grant Agreement (GA) with the Commission/Agency (i.e. a ‘participant’1 in an action supported by a grant). The ‘coordinator’ is the beneficiary which is the central contact point for the Commission/Agency and represents the consortium (towards the Commission/Agency). 1 For the definition, see Article 2.1(15) of the Rules for Participation: ‘participant’ means any legal entity carrying out an action or part of an action under Regulation (EU) No 1291/2013 having rights and obligations with regard to the Union or another funding body under the terms of this Regulation. Both beneficiaries and coordinators must have a sufficient financial viability/capacity to be able to implement the action (i.e. achieve its expected objectives and results). The Commission/Agency will systematically verify the financial viability/capacity of the coordinator, if the requested EU contribution for the action is equal or superior to EUR 500 000. Exceptionally, it will also verify the financial viability/capacity (of the coordinator or other beneficiaries), if there are grounds to doubt them (see Article 15(9) of the Rules for Participation). For more information on financial viability/capacity, see the Online Manual. The Agreement is composed of: Terms and Conditions Annex 1 Description of the action Annex 2 Estimated budget for the action Annex 3 Accession Forms [OPTION to be used if Article 14 applies if joint and several liability has been requested by the [Commission][Agency]: 3a Declaration on joint and several liability of linked third parties] [OPTION if the JRC participates: 3b Administrative Arrangement] Annex 4 Model for the financial statements Annex 5 Model for the certificate on the financial statements Annex 6 Model for the certificate on the methodology 1 Regulation (EU) No 1291/2013 of the European Parliament and of the Council of 11 December 2013 establishing Horizon 2020 - the Framework Programme for Research and Innovation (2014-2020) (‘H2020 Framework Programme Regulation No 1291/2013’) (OJ L 347, 20.12.2013 p.104). 2 Text in italics shows the options of the Model Grant Agreement that are applicable to this Agreement. 3 Text in italics shows the options of the Model Grant Agreement that are applicable to this Agreement. 4 Text in italics shows the options of the Model Grant Agreement that are applicable to this Agreement. 5 The person representing the Commission/Agency must be an authorising officer (by delegation or sub-delegation), designated in accordance with document 60008 of 22.02.2001 ‘Mise en place de la Charte des ordonnateurs’. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 15 The division of roles and responsibilities within the consortium is explained in Article 41.2. Generally speaking:  the coordinator must coordinate and manage the grant and is the central contact point for the Commission/Agency  the beneficiaries must all together contribute to a smooth and successful implementation of the grant (i.e. contribute to the proper implementation of the action, comply with their own obligations under the GA and support the coordinator in his obligations). The signature arrangements are the following:  the coordinator directly signs the GA  the other beneficiaries sign the GA by signing the Accession Form (see Article 56). Amendments to the GA, if any, will be signed by the coordinator on their behalf. Applicants who accept the grant (by signing the GA) become beneficiaries of the grant and are bound by the entirety of its terms and conditions. This means that the beneficiaries must:  carry out the action (and especially the research work) as detailed in Annex 1 (‘technical implementation’) and  comply with all the other provisions of the GA and all the applicable provisions of EU, international and national law. Other entities which participate in the action but do not sign the GA (including entities linked to the beneficiaries) are considered as ‘third parties involved in the action’ (see Article 8). They are not bound by the terms and conditions of the GA; conversely, the Commission/Agency has no obligation towards third parties. 2. Name, legal form, official registration No, address — Legal entity data The legal entity data (legal name, address, legal form, legal representatives, etc.) of the beneficiaries comes from the Participant Portal Beneficiary Register. ‘Official registration No’ refers NOT to the ‘participant identification code (PIC)’ attributed by the Beneficiary Register, but to the official registration number in the national registry, if any. This data will be automatically used for all communications concerning this grant (see Article 52) and other H2020 grants. The beneficiaries must keep their beneficiary data up-to-date at all times, including after the end of the grant (see also Article 17). In case of changes, the ‘legal entity appointed representative (LEAR)’ of the concerned beneficiary must introduce a change request directly in the Participant Portal (see Articles 17 and 52). . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 16 CHAPTER 1 GENERAL ARTICLE 1 — SUBJECT OF THE AGREEMENT CHAPTER 1 GENERAL ARTICLE 1 — SUBJECT OF THE AGREEMENT This Agreement sets out the rights and obligations and the terms and conditions applicable to the grant awarded to the beneficiaries for implementing the action set out in Chapter 2. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 17 CHAPTER 2 ACTION ARTICLE 2 — ACTION TO BE IMPLEMENTED [— COMPLEMENTARY GRANT] [— JOINTLY FUNDED ACTION] 1. RIA, IA and CSA actions What? The RIA, IA and CSA grants of the General MGA fund2:  for research and innovation actions (RIA): R&D aiming to establish new knowledge or explore the feasibility of a new technology, product, process, service or solution (including basic and applied research, technology development and integration, testing and validation on a small-scale prototype in a laboratory or simulated environment)  for innovation actions (IA): innovation activities directly aiming at producing plans and arrangements or designs for new, altered or improved products, processes or services (including prototyping, testing, demonstrating, piloting, large-scale product validation and market replication)3  for coordination and support actions (CSA): accompanying measures (such as standardisation, dissemination, awareness-raising and communication, networking, coordination or support services, policy dialogues and mutual learning exercises and studies)4. 2 More information on the types of action can be found on the General Annexes to the Work Programmes. 3 For the definition, see Article 2.1(6) of the Rules for Participation: ‘innovation action’ means an action primarily consisting of activities directly aiming at producing plans and arrangements or designs for new, altered or improved products, processes or services. For this purpose they may include prototyping, testing, demonstrating, piloting, large-scale product validation and market replication. 4 For the definition, see Article 2.1(7) of the Rules for Participation: ‘coordination and support action’ means an action consisting primarily of accompanying measures such as standardisation, dissemination, awareness- raising, and communication, networking, coordination or support services, policy dialogues and mutual learning exercises and studies, including design studies for new infrastructure, and may also include complementary activities of networking and coordination between programmes in different countries. CHAPTER 2 ACTION ARTICLE 2 — ACTION TO BE IMPLEMENTED [— COMPLEMENTARY GRANT] [— JOINTLY FUNDED ACTION] The grant is awarded for the action entitled [insert title of the action] — [insert acronym] (‘action’), as described in Annex 1. [OPTION for complementary grants if foreseen in the work programme: The grant is a ‘complementary grant’ to [the grant agreement(s) under the call(s) for proposals [call identifier(s): H2020 — theme —]] [the following complementary grant agreement(s) No(s): - [insert number] [insert acronym] - [insert number] [insert acronym]].] [OPTION for joint actions (joint call with a third country or an international organisation): The action is a ‘jointly funded action’ which must be coordinated with the ‘joint action’ called [insert the name of the third country or international organisation action], as described in Annex 1.] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 18 RIA, IA and CSA actions are mono- or multi-beneficiary actions. They are funded in all Parts of the Horizon 2020 Framework Programme (e.g. H2020-FETOPEN- 2014-2015-RIA; H2020-WIDESPREAD-2014-3). 2. Complementary grants ‘Complementary grants’ are different EU grants which are ‘linked’ by the work programme/calls by identifying them as ‘complementary actions’. The beneficiaries and those of the complementary grants must cooperate and provide access to their results. They must conclude a written ‘collaboration agreement’ regarding the coordination of the complementary grants and the work of the action (see Article 41.4). (It covers the case included under Special Clause 41 in FP7.) 3. Jointly funded actions (‘joint actions’) ‘Joint actions’ are the result of joint or coordinated calls for proposals, launched in parallel by the EU and a third country (e.g. a scientific and technological organisation or funding agency) or international organisation (in policy areas of common interest and expected mutual benefit where there is a clear added value for the EU).5 For joint calls: the applicants prepare a joint proposal which is submitted to both the EU and the third country/IO; the proposals are evaluated and selected through joint evaluation and selection procedures, involving a balanced group of independent experts appointed by each party. For coordinated calls: the applicants submit separate proposals (to the EU and the third country/IO), together with a summary of the work to be done under the coordinated proposal. The Commission/Agency will only evaluate the proposals for the EU action; however, the evaluation may be coordinated (i.e. include experts from the third country/IO use the same expert panels; apply the same evaluation criteria, etc.). For both types of calls, the EU participants sign a GA with the EU, while the third country participants sign one with their funding agency/IO. The description of the action (Annex 1 to the GA) contains the research carried out under the EU action (but will also include detailed explanations about the research to be carried out under the third country/IO action). To ensure coordination, the participants of the two actions must conclude a ‘coordination agreement’ (see Article 41.5) to link the actions (although legally separate) and ensure a smooth and successful project implementation. 5 See Article 12 of the Rules for Participation. The term ‘action’ comes from the Financial Regulation No 966/2012 and the Rules of Application Regulation No 1268/2012 and means ‘project’. (Previous EU Research Framework Programmes used ‘project’.) . For more information on RIA, IA and CSA actions, see the Online Manual and the H2020 grants fact sheets on the Participant Portal. For guidance on coordination agreements, see the Guidance — How to draw up your coordination agreement. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 19 ARTICLE 3 — DURATION AND STARTING DATE OF THE ACTION 1. Action starting date The starting date of the action (‘action starting date’) is fixed by the Commission/Agency in the GA. It is usually the first day of the month following the date when the GA enters into force. The GA enters into force when the last party signs it (see Article 58). A fixed starting date may also be agreed between the Commission/Agency and the consortium. Exceptionally, the Commission/Agency may agree that the action starts on another day than the first day of the month, if the consortium requests it (usually in its proposal) and can show that there is a need to start the action at that moment (e.g. an action that is dependent on environmental conditions). That starting date can be either:  before the entry into force of the GA, i.e. before the grant agreement is signed by both parties Example: Grant agreement signed by the coordinator on 30.12.2014. Commission signs on 5.1.2015. The action starting date would normally be the 1.2.2015, but the consortium has requested a fixed starting date of 1.9.2014 in its proposal (submitted by the consortium on 15.5.2014), since the action funded is the continuation of a previous FP7 project. Upon consideration of the reasons, this fixed starting date is approved. If the consortium (via the coordinator) requests a fixed starting date before the entry into force of the GA, it (the consortium) assumes the risks implied by starting the action before the GA is signed, in particular not being reimbursed for the costs incurred (e.g. the eventuality that the proposal is not successful or that the GA is not signed)  after the entry into force of the GA, i.e. after the grant agreement is signed by both parties, but on another day than the first day of the following month A starting date fixed much later in time (e.g. 2-3 months after the signature of the GA) will have an impact on the timing of the pre-financing payment and will delay it. The action starting date can NEVER be before the submission of the proposal. ARTICLE 3 — DURATION AND STARTING DATE OF THE ACTION The duration of the action will be [insert number] months as of [OPTION by default: the first day of the month following the date the Agreement enters into force (see Article 58)] [OPTION if needed for the action: [insert date]] 6 (‘starting date of the action’). 6 This date must be the first day of a month and it must be later than the date of entry into force of the agreement, unless authorised otherwise by the authorising officer, if the applicant can demonstrate the need to start the action before the entry into force of the grant agreement or the need to start the action on another day than the first day of the month. In any case, the starting date should not be earlier than the date of the submission of the grant application (Article 130 FR). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 20 2. Action duration The duration of the action (‘action duration’) is fixed by the Commission/Agency in the GA. It is expressed as a number of months, running from the action starting date until the end date of the action. The action duration relates only to the period during which the action tasks (set out in Annex 1) are implemented. The end date of the action is therefore NOT the same as ‘project closure’ or the end of the GA. After the end date of the action, the beneficiaries still have to submit their final report and the Commission/Agency has to make the payment of the balance. Moreover, certain obligations under the GA continue even afterwards. . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 21 ARTICLE 4 — ESTIMATED BUDGET AND BUDGET TRANSFERS 1. Estimated budget The estimated budget of the action is calculated on the basis of the estimated eligible costs submitted by the consortium and is annexed to the GA (Annex 2). These estimated eligible costs are used to determine the ‘maximum grant amount’ of the action (called ‘EU/Euratom financial contribution’ in FP7 projects; see Article 5.1). Costs of beneficiaries not receiving EU funding will be indicated in Annex 2, but will not be included in the total eligible costs and will not count for the maximum amount of the grant (see Article 9). 2. Budget categories The budget categories are listed in Article 6.2 and reflected in the table in Annex 2. Budget categories of the General MGA:  direct personnel costs’  costs for employees (or equivalent)  costs for natural persons working under a direct contract  costs of personnel seconded by a third party against payment  costs for SME owners without salary  costs for beneficiaries that are natural persons without salary  personnel costs for providing trans-national access to research infrastructure  direct costs of subcontracting ARTICLE 4 — ESTIMATED BUDGET AND BUDGET TRANSFERS 4.1 Estimated budget The ‘estimated budget’ for the action is set out in Annex 2. It contains the estimated eligible costs and the forms of costs, broken down by beneficiary [(and linked third party)] and budget category (see Articles 5, 6, [and 14]). [OPTION to be used if Article 9 applies: It also contains the estimated costs of the beneficiaries not receiving EU funding (see Article 9).] 4.2 Budget transfers The estimated budget breakdown indicated in Annex 2 may be adjusted by transfers of amounts between beneficiaries or between budget categories (or both). This does not require an amendment according to Article 55, if the action is implemented as described in Annex 1. However, the beneficiaries may not add costs relating to subcontracts not provided for in Annex 1, unless such additional subcontracts are approved by an amendment or in accordance with Article 13. [OPTION if lump sum foreseen in Article 5.2: Lump sums set out in Annex 2 can never be adjusted.] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 22  direct costs of providing financial support to third parties (if option applies)  other direct costs  travel costs and related subsistence allowances  equipment costs  costs of other goods and services  capitalised and operating costs of large research infrastructure  indirect costs  specific cost categories (if option applies). This budget category (specific cost categories) applies ONLY where specific activities are reimbursed by unit costs or lump sum costs. For the General MGA, this is currently the case for ‘access costs for providing trans-national access to research infrastructure’, ‘costs for energy efficiency measures in buildings’ and ‘costs for clinical studies’. 3. Budget transfers The budget in Annex 2 is an estimation. Therefore at the time of reporting, beneficiaries may declare costs that are different from the estimated eligible costs in the budget. Moreover, beneficiaries may transfer budget among themselves, between linked third parties or between budget categories — without requesting an amendment (see Article 55) (unless Annex 1 must be changed). What can be transferred? If the incurred eligible costs are lower than the estimated eligible costs, the difference can be allocated to another beneficiary or another budget category. The amount reimbursed for the other beneficiary (by application of its reimbursement rate) or for the other budget category (to which the budget transfer is intended) may thus be higher than planned. Example: The estimated budget includes personnel costs of EUR 60 000 for Beneficiary A and EUR 75 000 for Beneficiary B. However, at the end of the action, the actual personnel costs of Beneficiary A are EUR 75 000 due to an increase in salaries or to the need to employ additional personnel to carry out the tasks mentioned in Annex 1 while the actual personnel costs of Beneficiary B are EUR 60 000. This may be acceptable provided the additional costs of Beneficiary A fulfil the eligibility requirements of Article 6 and up to the maximum grant amount set out in Article 5.1 (at the level of the action). Unit costs — If the GA foresees unit costs, transferring amounts declared as unit costs to other categories or other beneficiaries is possible if the actual number of units used (or produced) by the beneficiary is less than the number estimated in Annex 2. The cost per unit cannot be changed. Example: Total estimated unit costs for beneficiary A: EUR 10 000 (100 units x 100 EUR/unit) Total actual unit costs used (or produced) by beneficiary A: EUR 8 000 (80 units x 100 EUR/unit) Total possible transfer to another budget category: EUR 2 000 What not? The GA allows transfers of budget, not of tasks. The maximum grant amount (see Article 5.1) can however NEVER be increased. . The budget categories are relevant for the estimated budget (Article 4 and Annex 2), forms of costs (Article 5), cost eligibility rules (Article 6.2) and the cost declarations (i.e. financial statements; Article 20 and Annex 4). . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 23 A beneficiary cannot transfer budget to a form of costs that has not been foreseen in Annex 2 (for that beneficiary). Example: A beneficiary budgets all its direct personnel costs as ‘actual costs’ in the estimated budget (column A (a) of Annex 2). However, at the end of the first reporting period, the beneficiary declares its direct personnel costs as ‘unit costs determined according to its usual cost accounting practices’ (average personnel costs, in column A (b) of Annex 2). This is not acceptable without an amendment of the GA to modify the form of costs for direct personnel costs. If the budget transfer is due to a significant change in Annex 1, an amendment to the GA is needed. A significant change is a change that affects the technical work (the ‘tasks’ of the action) of Annex 1. Best practice: The coordinator can contact the Commission/Agency to ask whether the transfer of budget reflects a significant change in Annex 1 which requires an amendment. Lump sums — If the GA provides for a lump sum, the lump sum set out in Annex 2 cannot be transferred to another category or to another beneficiary. Furthermore, the amount of the lump sum can never be increased, decreased or split. Example: EUR 30 000 lump sum foreseen for travel in Annex 2 (under ‘other direct costs’) cannot be turned into a EUR 15 000 lump sum for travel and EUR 15 000 for personnel costs New subcontracts — The transfer of budget intended to increase the eligible costs for ‘subcontracting’ is considered to reflect a significant change of Annex 1 normally requires an amendment (unless the beneficiary uses the ‘simplified approval procedure’ without formal amendment provided for in Article 13). Example (amendment): Beneficiary A subcontracts an action task during the action implementation, because it decided not to recruit additional personnel as initially foreseen, but to use a subcontractor. It requests an ex- ante approval via an amendment (see Article 55) Example (simplified approval procedure): A beneficiary wants to subcontract a task that originally it was going to carry out by itself. It wants to transfer EUR 100 000 from personnel costs to subcontracting. In order to make sure that this new subcontracting is possible and its cost is eligible, this will require an amendment to the GA before the subcontracting takes place. However, the beneficiary doesn’t request an amendment, but declares the change only with the next periodic technical report (at its own risk). Since the Commission approves the report, the costs of the additional subcontract are eligible. Beneficiaries that rely on the ‘simplified approval procedure’ bear the full risk of non-approval and rejection by the Commission/Agency (see Article 13). . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 24 CHAPTER 3 GRANT ARTICLE 5 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATES AND FORMS OF COSTS CHAPTER 3 GRANT ARTICLE 5 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATES AND FORMS OF COSTS 5.1 Maximum grant amount The ‘maximum grant amount’ is EUR [insert amount (insert amount in words)]. 5.2 Form of grant, reimbursement rates and forms of costs The grant reimburses [OPTION for research and innovation actions (RIA): 100 % of the action’s eligible costs] [OPTION for innovation actions (IA) 7 if all beneficiaries and all linked third parties are non- profit legal entities 8 : 100% of the action’s eligible costs][OPTION for innovation actions if all beneficiaries and all linked third parties are profit legal entities: 70% of the action’s eligible costs][OPTION for innovation actions (IA) if some beneficiaries or linked third parties are non-profit legal entities and some are profit legal entities: 100% of the eligible costs of [the beneficiaries][and][linked third parties] that are non-profit legal entities and 70% of the eligible costs of the beneficiaries [and linked third parties] that are profit legal entities][OPTION for exceptional cases if foreseen in the work programme: […%] of the action’s eligible costs] (see Article 6) (‘reimbursement of eligible costs grant’) (see Annex 2). The estimated eligible costs of the action are EUR [insert amount (insert amount in words)]. Eligible costs (see Article 6) must be declared under the following forms (‘forms of costs’): (a) for direct personnel costs [(excluding direct personnel costs covered by the unit cost[/lump sum] under Point (f))] 9 : - as actually incurred costs (‘actual costs’) or - on the basis of an amount per unit calculated by the beneficiary in accordance with its usual cost accounting practices (‘unit costs’). Personnel costs for SME owners or beneficiaries that are natural persons not receiving a salary (see Article 6.2, Points A.4 and A.5) must be declared on the basis of the amount per unit set out in Annex 2 (unit costs); (b) for direct costs of subcontracting [(excluding subcontracting costs covered by the unit cost[/lump sum] under Point (f))] 10 : as actually incurred costs (actual costs); (c) for direct costs of providing financial support to third parties [(excluding costs of financial support covered by the unit cost[/lump sum] under Point (f))] 11 : [OPTION to be used if Article 15 applies: as actually incurred costs (actual costs);][OPTION: not applicable;] (d) for other direct costs [(excluding other direct costs covered by the unit cost[/lump sum] under Point (f))] 12 : as actually incurred costs (actual costs); (e) for indirect costs [(excluding indirect costs covered by the unit cost[/lump sum] under Point (f))]13: on the basis of a flat-rate applied as set out in Article 6.2, Point E (‘flat-rate costs’); (f) [OPTION for specific unit costs (unit cost foreseen by Commission decision and applicable to the grant): for [insert name of specific cost category(ies) 14 ]: on the basis of the amount(s) per unit set out in Annex 2 15 (unit costs).] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 25 1. Maximum grant amount The maximum grant amount set out in this Article can NOT be exceeded. The maximum grant amount is not the ‘final grant amount’ and is not a ‘price’ due to the beneficiaries. 2. Reimbursement rates How much? The ‘reimbursement rate’ for RIA actions is normally 100% of the total eligible costs6; for IA actions it is normally 70% of the total eligible costs7. The eligible costs of non-profit beneficiaries/linked third parties participating in innovation actions may be reimbursed at 100%.8 In exceptional cases fixed in the work programme/call, lower reimbursement rates may apply. As a general principle there is only one funding (reimbursement) rate per action, the same for all activities and all beneficiaries of the action (one project — one funding rate). 6 See Article 28(4) of the Rules for Participation. 7 See Article 28(5) of the Rules for Participation. 8 See Article 28(5) of the Rules for Participation. The maximum grant amount can NEVER be increased — even if the eligible costs of the action are higher than planned. . [OPTION: specific cost category(ies): not applicable.] [OPTION for specific lump sum costs (lump sum foreseen by Commission decision and applicable to the grant): for [insert name of specific cost category(ies)]: as the lump sum set out in Annex 2 (‘lump sum costs’).] 7 For the definition, see Article 2.1(6) of Regulation (EU) No 1290/2013 of the European Parliament and of the Council of 11 December 2013 laying down the rules for participation and dissemination in "Horizon 2020 – the Framework Programme for Research and Innovation (2014-2020)" ('Rules for Participation Regulation No 1290/2013') (OJ L 347, 20.12.2013 p.81): ‘innovation action’ means an action primarily consisting of activities directly aiming at producing plans and arrangements or designs for new, altered or improved products, processes or services. For this purpose they may include prototyping, testing, demonstrating, piloting, large-scale product validation and market replication. 8 For the definition, see Article 2.1(14) of the Rules for Participation Regulation (EU) No 1290/2013: ‘non-profit legal entity’ means a legal entity which by its legal form is non-profit-making or which has a legal or statutory obligation not to distribute profits to its shareholders or individual members. 9 To be used only if option in point (f) is used. 10 To be used only if option point (f) is used. 11 To be used only if option in point (f) is used. 12 To be used only if option in point (f) is used. 13 To be used only if option in point (f) is used. 14 Insert precise name of the costs category (as in the Commission decision authorising the use of the unit cost/lump-sum). For example: ‘access costs for providing trans-national access to research infrastructures’; costs for ‘clinical studies’; costs for ‘energy efficiency measures in buildings’. 15 Annex 2 must clearly show, for each beneficiary (and linked third party) concerned, all the parameters for the unit cost (i.e. the unit(s), the amount(s) per unit, the research installation/infrastructure for which it is used, the clinical study for which it is used, etc.). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 26 However, if non-profit beneficiaries/linked third parties are in the same innovation action together with profit beneficiaries/linked third parties, their eligible costs will be reimbursed according to their different reimbursement rates. The reimbursement rates apply to all forms of costs (actual, unit, lump sums and flat-rates costs)9 and all budget categories. 3. Costs forms The General MGA foresees options for all four cost forms (i.e. actual, unit, flat-rate and lump-sum costs)10. In practice, they are currently all used, except for lump sums (which are only used for SME Instrument actions). Cost forms of the General MGA:  actual costs (i.e. costs which are real and not estimated or budgeted) for:  direct personnel costs (— unless declared as unit cost) Example: EUR 62 500 actual yearly salary for senior researcher A  subcontracting costs Example: The actual price paid for the subcontracting of a clinical study  costs of providing financial support to third parties (if option applies) Example: The financial support actually paid to third parties  other direct costs Example: EUR 2000 actual price for a computer  unit costs (i.e. an amount per unit) for:  direct personnel costs of SME owners/natural persons not receiving a salary11  direct personnel costs calculated by the beneficiaries in accordance with their usual cost accounting practices (‘average personnel costs’) 12  specific unit costs for:  costs for energy efficiency measures in buildings13  access costs for providing trans-national access to research infrastructure14  costs for clinical studies15 9 See Article 28(6) of the Rules for Participation. 10 See Articles 123, 124 of the Financial Regulation. 11 Commission Decision C(2013) 8197 of 10 December 2013 authorising the use of reimbursement on the basis of unit costs for the personnel costs of the owners of small and medium-sized enterprises and beneficiaries that are natural persons not receiving a salary under the Horizon 2020 Framework Programme for Research and Innovation and under the Research and Training Programme of the European Atomic Energy Community (2014- 2018). Available at http://ec.europa.eu/research/participants/data/ref/h2020/other/legal/unit_costs/unit- costs_sme-owners_natural-persons-no-salary_en.pdf. 12 See Article 33(2) of the Rules for Participation. 13 Commission Decision C(2013) 8196 of 10 December 2013 authorising the use of reimbursement on the basis of unit costs for energy efficiency measures in buildings under the Energy Challenge actions of the Horizon 2020 Framework Programme. Available at http://ec.europa.eu/research/participants/data/ref/h2020/other/legal/unit_costs/unit-costs_energy_en.pdf. 14 Commission Decision C(2013) 8199 of 10 December 2013 authorising the use of reimbursement on the basis of unit costs for actions involving trans-national access under the Research Infrastructures Part of the Horizon 2020 Framework Programme. Available at http://ec.europa.eu/research/participants/data/ref/h2020/other/legal/unit_costs/unit-costs_tna-infra_en.pdf. 15 Commission Decision C(2014) 1393 of 7 March 2014 authorising the use of reimbursement on the basis of unit costs for actions requiring the conduct of clinical studies under ‘Societal Challenge 1: Health, Demographic Change and Wellbeing’ of the Horizon 2020 Framework Programme available at The grant can NEVER reimburse more than the maximum grant amount fixed in Article 5.1. . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 27  flat-rate costs (i.e. costs calculated by applying a percentage fixed in advance to other types of eligible costs) for:  indirect costs (25% flat-rate for indirect costs; new in Horizon 2020)16  lump sum costs (i.e. a global amount deemed to cover all costs of the action or a specific category of costs). Example: EUR 150 000 to carry out a study within an action The General MGA currently does NOT use any lump sum costs. Within a grant, different forms of costs can be used. Example: a budget category (e.g. personnel) covered by unit costs and another (e.g. equipment) by actual costs. The table below summarises the different budget categories and forms of costs that may be used in H2020 actions under the General MGA: Forms of costs Budget categories Direct personnel costs Direct costs of sub- contracting Direct costs of financial support to third parties (option used if Article 15 applies) Other direct costs Indirect costs Specific cost categories (option used if Article 6.2 (F) applies) Actual costs YES YES YES YES NO NO Unit costs YES, only for: -costs established according to the usual cost accounting practices of the beneficiary -costs of SME owners and natural persons not receiving a salary NO NO NO NO YES, only if foreseen by Commission Decision Flat-rate costs NO NO NO NO YES NO Lump sum costs NO NO NO NO NO YES, only if foreseen by Commission Decision http://ec.europa.eu/research/participants/data/ref/h2020/other/legal/unit_costs/unit%20costs_clinical_studies. pdf 16 See Article 29(1) of the Rules for Participation. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 28 5.3 Final grant amount — Calculation The ‘final grant amount’ depends on the actual extent to which the action is implemented in accordance with the Agreement’s terms and conditions. This amount is calculated by the [Commission][Agency] — when the payment of the balance is made (see Article 21.4) — in the following steps: Step 1 — Application of the reimbursement rates to the eligible costs Step 2 — Limit to the maximum grant amount Step 3 — Reduction due to the no-profit rule Step 4 — Reduction due to improper implementation or breach of other obligations 5.3.1 Step 1 — Application of the reimbursement rates to the eligible costs The reimbursement rate(s) (see Article 5.2) are applied to the eligible costs (actual costs, unit costs and flat- rate costs [and lump sum costs]; see Article 6) declared by the beneficiaries [and linked third parties] (see Article 20) and approved by the [Commission][Agency] (see Article 21). 5.3.2 Step 2 — Limit to the maximum grant amount If the amount obtained following Step 1 is higher than the maximum grant amount set out in Article 5.1, it will be limited to the latter. 5.3.3 Step 3 — Reduction due to the no-profit rule The grant must not produce a profit. ‘Profit’ means the surplus of the amount obtained following Steps 1 and 2 plus the action’s total receipts, over the action’s total eligible costs. The ‘action’s total eligible costs’ are the consolidated total eligible costs approved by the [Commission][Agency]. The ‘action’s total receipts’ are the consolidated total receipts generated during its duration (see Article 3). The following are considered receipts: (a) income generated by the action; if the income is generated from selling equipment or other assets purchased under the Agreement, the receipt is up to the amount declared as eligible under the Agreement; (b) financial contributions given by third parties to the beneficiary [or to a linked third party] specifically to be used for the action, and (c) in-kind contributions provided by third parties free of charge and specifically to be used for the action, if they have been declared as eligible costs. The following are however not considered receipts: (a) income generated by exploiting the action’s results (see Article 28); (b) financial contributions by third parties, if they may be used to cover costs other than the eligible costs (see Article 6); H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 29 1. Final grant amount The final grant amount will be calculated by the Commission/Agency — at the end of the action (or in case of termination of the GA) —, in order to determine the balance to be paid. The final grant amount will depend on two types of criteria:  work implementation criteria, i.e. was the work carried out as described in Annex I? This is a technical analysis by the Commission/Agency of the work performed during the action, as compared with the activities set out in Annex 1 to the GA.  financial criteria, including:  the amount of eligible costs  the reimbursement rates  the maximum grant amount (see Article 5.1). Procedure for calculating the final grant amount: Calculation of final grant amount Step 1 — Application of reimbursement rate(s) to eligible costs Step 2 — Limit to the maximum grant amount The grant amount following Steps 1 and 2 is the lower of the two amounts. Step 3 — Reduction due to the no-profit rule Step 4 — Reduction due to improper implementation or breach of other obligations under the GA The final grant amount is the lower of the following two amounts obtained following Steps 1 to 3 or following Step 4. final grant amount (c) financial contributions by third parties with no obligation to repay any amount unused at the end of the period set out in Article 3. If there is a profit, it will be deducted from the amount obtained following Steps 1 and 2. 5.3.4 Step 4 — Reduction due to improper implementation or breach of other obligations — Reduced grant amount — Calculation If the grant is reduced (see Article 43), the [Commission][Agency] will calculate the reduced grant amount by deducting the amount of the reduction (calculated in proportion to the improper implementation of the action or to the seriousness of the breach of obligations in accordance with Article 43.2) from the maximum grant amount set out in Article 5.1. The final grant amount will be the lower of the following two: - the amount obtained following Steps 1 to 3 or - the reduced grant amount following Step 4. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 30 Step 1 — Rejection of ineligible costs and application of the reimbursement rate(s). Ineligible costs (i.e. costs that do not comply with one or more cost eligibility conditions; see Article 6) will — if found at payment of the balance — be rejected (i.e. not approved). If, for innovation actions (IA), there are different reimbursement rates for different beneficiaries, the Commission/Agency will apply the reimbursement rate for each beneficiary to the costs it has approved for that beneficiary. Step 2 — The contribution is limited to the maximum grant amount (see Article 5.1). Step 3 — Reduction due to the no-profit rule and receipts. Since the grant amount may not have the purpose or effect of producing a profit for the beneficiaries, the total funding requested + receipts is capped at the total eligible costs; the grant amount following Steps 1 and 2 plus receipts cannot exceed the approved costs. If grant amount + receipts > total eligible costs  reduction of grant amount The grant amount, receipts and eligible costs taken into account are the consolidated grant amount (following Steps 1 and 2), the consolidated receipts and the consolidated approved costs. The receipts that must be taken into account are receipts that are:  established (i.e. revenue that has been collected AND entered in the accounts)  generated (i.e. revenue that has not yet been collected, but which has been generated) or  confirmed (i.e. revenue that has not yet been collected, but for which the beneficiary has a commitment or written confirmation) during the action duration (see Article 3). The following are considered ‘receipts’:  income generated by the action (i.e. any income generated by the action itself, including the sale of assets bought for the action and sold during the action duration) Examples: admission fee to a conference organised by the consortium; sale of equipment bought for the action. Receipts from the sale of assets are capped to the amount of costs declared for the asset. Example: Machine bought for EUR 21 000 in year X, sold in year X + 4 (both within the action duration) for EUR 16 000. The machine was used at 50% for the action, and fully depreciated in 3 years (7 000 EUR/year, of which 3 500 EUR/year were charged to the action) Amount of receipts to be declared: 50% of 16 000 with a limit of 10 500 (3 x 3 500) = EUR 8 000  financial contributions given by third parties specifically to be used for the action (i.e. money given as a donation by a third party (a donor) to a beneficiary/linked third party specifically for the action covered by the GA  in-kind contributions provided by third parties free of charge specifically to be used for the action, if they have been declared as eligible costs (i.e. not money, but an in-kind contribution free of charge given by a third party (a donor) specifically for being used for the action covered by the GA) Profit is assessed at the level of the action, NOT at the level of the individual beneficiaries ( new in Horizon 2020). . . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 31 Examples: the free use of equipment; the secondment of an expert without reimbursement Free of charge in-kind contributions are capped by the amount declared as third party costs for the contribution. The following are NOT considered ‘receipts’:  income generated by exploiting the results of the project (e.g. the IPR) is not considered a receipt since successfully exploiting the results is one of the main objectives of the action  financial contributions given by a third party (a donor) specifically to be used for the action if they may be used according to the donor’s rules to cover costs other than the eligible costs Example: currency exchange losses  financial contributions given by a third party (a donor) specifically to be used for the action — if the donor did not set the obligation to repay any unused amount at the end of the action In this case, the full amount of the financial contribution is considered not a receipt (not only the unused amount). Example: A university professor whose costs are charged by the university in the GA, but whose salary is paid by the Ministry and not reimbursed by the university: This in-kind contribution from a third party (the Ministry) is not to be considered a receipt, unless the professor has been specifically seconded by the Ministry to the university to work for the action in question. In other words, if the university is free to decide the allocation of the professor's work, then his/her contribution is assimilated to an ‘own resource’ of the university and it is not a receipt.  financial contributions made by one beneficiary to another within the same action are also not considered receipts either, since receipts are only contributions from third parties. (Conversely, such a financial contribution cannot either be declared as cost for the action.) Example: Beneficiary A (big company) in an innovation project (i.e. funded at 70%) decides to subsidise a small specialised SME by funding an additional 10% of the SME’s costs in order to encourage it to participate in the action. Step 4 — Reduction due to improper implementation or breach of other obligations under the GA. Proper implementation will be analysed by the Commission/Agency, comparing the work performed (according to the periodic and final technical reports) to the activities described in Annex 1. Receipts will be taken into account by the Commission/Agency only at the moment of the payment of the balance (i.e. the final payment at the end of the action). They must be declared in the final report (although beneficiaries are free to do so also in the periodic reports). In many cases they will not affect the grant amount since they do not lead to a profit (at the level of the action). However, particularly in actions funded at 100%, they may have an impact and cause a reduction. Examples: 1. Eligible costs: 100 and grant amount: 70 If receipts: 30  no impact If receipts: 20  no impact If receipts: 60  the grant amount will be reduced to 40. 2. Eligible costs: 100 and grant amount: 100 If receipts: 0  no impact; If receipts: 20  the grant amount will be reduced to 80 Best practice: The potential implications of receipts should be addressed in the consortium agreement (see Article 41.3). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 32 Improper implementation may lead to a reduction of the grant (i.e. reduction of the ‘maximum grant amount’; see Article 5.1) — on a case-by-case basis (and only after a contradictory procedure with the coordinator or the beneficiary concerned; see Article 43). In principle, the Commission/Agency will not reduce the final grant amount for minor delays/deviations in the technical work foreseen in Annex 1. Example (reduction): of the 3 test plants was not built, and several testing activities were not carried out; breach of the obligation to display the EU emblem or to respect confidentiality of information identified as confidential. Examples (no reduction): a deliverable is delayed by a couple of days because the researcher responsible is on sick leave; a scientific test has to be redone at a later time due to meteorological conditions Example for calculating the final grant amount: Grant for a consortium with a maximum grant amount of EUR 3 000 000, where the eligible costs are reimbursed at 100%, and the indirect costs are calculated on the basis of a flat rate of 25% on the direct costs (minus subcontracting, costs incurred by third parties not used in the beneficiaries’ premises and costs of providing financial support to third parties). The total direct eligible costs of the consortium approved by the Commission/Agency are EUR 2 500 000. One of the beneficiaries is sponsored for this project by a private company, with an amount of EUR 60 000 dedicated to the reimbursement of the remuneration of one young researcher, and another beneficiary (a university) receives as in-kind contribution from its government the secondment of a scientist specifically assigned to the project (the “action”). The salary of this seconded scientist (EUR 80 000) is declared as eligible by this beneficiary, even if paid by the Government. Both these contributions fit the definition of receipts (see above). Rejection of ineligible costs and application of the reimbursement rates: Eligible costs = EUR 2 500 000 direct costs (including EUR 200 000 for subcontracting) + EUR 575 000 for indirect costs (25 % flat rate on direct costs minus subcontracting) = EUR 3 075 000 Reimbursement rate= 100% Amount obtained = EUR 3 075 000 Limit to the maximum grant amount: The total eligible costs of EUR 3 075 000 are higher than the maximum grant amount of EUR 3 000 000. However, the maximum amount cannot be increased and therefore, it is limited to EUR 3 000 000. Reduction due to the no-profit rule and receipts: In the example above, the profit at the level of the action would be calculated by taking the surplus of EUR 3 000 000 (amount obtained after steps 1 and 2), plus the action’s total receipts (60 000 + 80 000), over the action’s total approved eligible costs (EUR 3 075 000): 3 000 000 + 60 000 + 80 000 = EUR 3 140 000. Total eligible costs: EUR 3 075 000. Profit: EUR 3 140 000 – EUR 3 075 000=EUR 65 000 Grant amount after reduction due to no-profit rule: EUR 3 000 000 – EUR 65 000 = EUR 2 935 000. Reduction due to improper implementation or breach of other obligations under the GA: Reduction of 2% of the maximum grant amount as the Coordinator of the consortium breached a confidentiality obligation of Article 36 GA, namely EUR 60 000 3 000 000 - 60 000 = EUR 2 940 000 The final amount of the grant will be the lower between the following two:  the amount obtained after applying the reimbursement rates to the total eligible costs, within the ceiling of the maximum grant amount and after applying the no-profit rule (Steps 1, 2 and 3): 2 935 000  the reduced maximum grant amount obtained in Step 4: 2 940 000 Final grant amount = EUR 2 935 000. A reduction of the maximum grant amount is NOT a sanction, but the consequence of a breach of an obligation under the GA. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 33 1. Revised final grant amount If the Commission/Agency finds — after the payment of the balance — ineligible costs, improper implementation of the action or breach of other obligations (and therefore rejects the costs or reduces the grant), it will revise the final grant amount, for each beneficiary concerned (i.e. at beneficiary level). For rejection of costs: the Commission/Agency will deduct the amount rejected from the total eligible costs declared by the beneficiary in the final summary financial statement (see Article 42.3). The revised final grant amount will be calculated by applying the reimbursement rate to the revised eligible costs of the beneficiary concerned. Example: Maximum grant amount: 500 000 There are three Beneficiaries A, B and C Reimbursement rate: 100% Direct eligible costs accepted for Beneficiary A at the payment of balance: 150 000 Total eligible costs accepted for Beneficiary A at the payment of balance = 150 000 + 25% (indirect costs) = 187 500 Costs rejected following audit: 30 000 Revised direct eligible costs: 120 000 Revised total eligible costs= 120 000 + 25% (indirect costs) = 150 000 Revised final grant amount: 100% of 150 000 = 150 000 For reduction of the grant: the Commission/Agency will:  reduce the maximum grant amount set out in Article 5.1, in proportion to the improper implementation or to the seriousness of the breach (see Article 43)  calculate the revised final grant amount (for each beneficiary concerned), by allocating the amount of the reduction to each of them in proportion to its improper implementation or breach of obligation If for the beneficiary the revised final grant amount is lower than its share of the final grant amount, there will be a recovery (see Article 44.1.3). . 5.4 Revised final grant amount — Calculation If — after the payment of the balance (in particular, after checks, reviews, audits or investigations; see Article 22) — the [Commission][Agency] rejects costs (see Article 42) or reduces the grant (see Article 43), it will calculate the ‘revised final grant amount’ for the beneficiary concerned by the findings. This amount is calculated by the [Commission][Agency] on the basis of the findings, as follows: - in case of rejection of costs: by applying the reimbursement rate to the revised eligible costs approved by the [Commission][Agency] for the beneficiary concerned; - in case of reduction of the grant: by calculating the concerned beneficiary’s share in the grant amount reduced in proportion to its improper implementation of the action or to the seriousness of its breach of obligations (see Article 43.2). In case of rejection of costs and reduction of the grant, the revised final grant amount for the beneficiary concerned will be the lower of the two amounts above. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 34 Example 1: Maximum grant amount and final grant amount: 500 000 There are three beneficiaries A, B and C Reimbursement rate: 100% According to the estimated budget, beneficiary A was entitled to a maximum contribution of 200 000 for carrying out its work set out in Annex I. Total eligible costs accepted for beneficiary A at the payment of balance = 187 500 1a: The Commission/Agency finds that beneficiary A has implemented only 80% of its work provided for in Annex 1. Revised final grant amount of beneficiary A: 80% of the share of beneficiary A in the maximum grant amount: 80% of 200 000 = 160 000 1b: The Commission/Agency finds that beneficiary A breached its confidentiality obligations, which had an impact of the full action and for which the reduction rate is set at 2%. 2% of the maximum grant amount = 10 000 The breach is entirely attributable to beneficiary A: 100% of the reduction is allocated to beneficiary A. Revised final grant amount of beneficiary A: 187 500 – 10 000= 177 500 For rejection of costs AND reduction of the grant: the revised final grant amount for the beneficiary concerned will be the lower of the two amounts above. Example: The revised final grant amount for beneficiary A will be 150 000 (the lowest between 150 000 (amount obtained following the rejection of ineligible costs) and 160 000/ 177 500 (amounts following the reduction of the grant in the 2 examples above). If for the beneficiary the revised final grant amount is lower than its share of the final grant amount, there will be a recovery (see Article 44.1.3). . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 35 ARTICLE 6 — ELIGIBLE AND INELIGIBLE COSTS ARTICLE 6 — ELIGIBLE AND INELIGIBLE COSTS 6.1 General conditions for costs to be eligible ‘Eligible costs’ are costs that meet the following criteria: (a) for actual costs: (i) they must be actually incurred by the beneficiary; (ii) they must be incurred in the period set out in Article 3, with the exception of costs relating to the submission of the periodic report for the last reporting period and the final report (see Article 20); (iii) they must be indicated in the estimated budget set out in Annex 2; (iv) they must be incurred in connection with the action as described in Annex 1 and necessary for its implementation; (v) they must be identifiable and verifiable, in particular recorded in the beneficiary’s accounts in accordance with the accounting standards applicable in the country where the beneficiary is established and with the beneficiary’s usual cost accounting practices; (vi) they must comply with the applicable national law on taxes, labour and social security, and (vii) they must be reasonable, justified and must comply with the principle of sound financial management, in particular regarding economy and efficiency; (b) for unit costs: (i) they must be calculated as follows: {amounts per unit set out in Annex 2 or calculated by the beneficiary in accordance with its usual cost accounting practices (see Article 6.2, Point A) multiplied by the number of actual units}; (ii) the number of actual units must comply with the following conditions: - the units must be actually used or produced in the period set out in Article 3; - the units must be necessary for implementing the action or produced by it, and - the number of units must be identifiable and verifiable, in particular supported by records and documentation (see Article 18); (c) for flat-rate costs: (i) they must be calculated by applying the flat-rate set out in Annex 2, and (ii) the costs (actual costs or unit costs [or lump-sum costs]) to which the flat-rate is applied must comply with the conditions for eligibility set out in this Article [;][.] (d) [OPTION if lump sum foreseen in Article 5.2: for lump sum costs: (i) the eligible amount is equal to the amount set out in Annex 2, and (ii) the corresponding tasks or parts of the action must have been properly implemented in accordance with Annex 1.] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 36 1. Eligible costs The grant can only reimburse eligible costs (i.e. costs that comply with the general and specific conditions set out in this Article) (‘reimbursement of eligible costs grant’). Article 6.1 refers to general eligibility conditions applicable per cost form (see Article 5). Article 6.2 refers to specific eligibility conditions applicable per budget category (see Article 4). 2. General eligibility conditions for actual costs In order to be eligible, actual costs must be:  actually incurred by the beneficiary (i.e.: o real and not estimated, budgeted or imputed and o definitively and genuinely borne by the beneficiary (not by any other entity)).  incurred during the action duration (i.e. the generating event that triggers the costs must take place during the action duration) The ‘action duration’ is the period running from the action starting date to the end date of the action (see Article 3). If costs are invoiced or paid later than the end date, they are eligible only if the debt existed already during the action duration (supported by documentary evidence) and the final cost was known at the moment of the financial report. Costs of services or equipment supplied to a beneficiary (or to its linked third party) may be invoiced and paid after the end date of the action if the services or equipment were used by the beneficiary (or to its linked third party) during the action duration. By contrast, costs of services or equipment supplied after the end of the action or the GA termination are not eligible. Example: A conference for which costs are claimed must take place during the action duration.  entered as eligible costs in the estimated budget of the action, under the relevant budget category (see Annex 2) When the final amount of the grant is calculated, the eligible costs cannot include costs under budget categories that did not appear in the action estimated budget, unless the ONLY eligible costs may be entered into the estimated budget for the action (see Article 4) and declared in the financial statements (see Article 20). Moreover, the burden on proof for eligibility is on the beneficiaries (and linked third parties). They must keep sufficient supporting documents (see Article 18) to show that the costs they declare are eligible. Compliance with eligibility rules may be subject to a check or audit by the Commission/Agency. Any ineligible costs found will be rejected (see Article 42). For a consolidated list of eligibility issues relating to specific situations/legal framework in individual countries, see the List of issues applicable to particular countries on the Participant Portal. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 37 initial estimated budget was amended or if these additional costs were approved in accordance with Articles 11 to 13. Costs included in the estimated budget may be transferred between beneficiaries and budget categories without amending the GA under the conditions set out in Article 4.2.  connected to the action as described in Annex 1 (i.e. necessary to achieve the action’s objectives) The EU/Euratom grant cannot be used to finance activities other than those approved by the Commission.  identifiable and verifiable (i.e. come directly from the beneficiary’s accounts (be directly reconcilable with them) and supported by documentation) The beneficiaries must be able to show (with records and supporting documents; see Article 18) the actual costs of the work, i.e. what was actually paid for the work (and for depreciation costs: what is actually recorded in the beneficiary’s profit and loss accounts). Costs must be calculated according to the applicable accounting rules of the country in which the beneficiary is established and according to the beneficiary’s usual cost accounting practices. Example: if a beneficiary always charges a particular cost as an indirect cost, it must do so also for H2020 actions, and should not charge it as a direct cost. This may NOT be used as an excuse for non-compliance with other GA provisions. A beneficiary must make any changes needed to bring its usual cost accounting practices in line with all GA provisions. Examples: conditions for calculation of productive hours (see below); conditions for the eligibility of depreciation costs (in line with the international accounting standards, which may deviate from the accounting rules of the country) new in Horizon 2020: Accounting documentation is necessary only for direct costs. Indirect costs do not need supporting evidence because they are declared using a flat-rate.  in compliance with applicable national laws on taxes, labour and social security AND  reasonable, justified and must comply with the principles of sound financial management, in particular regarding economy and efficiency (i.e. be in line with good housekeeping practice when spending public money and not be excessive) ‘Economy’ means minimising the costs of resources used for an activity (input), while maximising quality; ‘efficiency’ is the relationship between outputs and the resources used to produce them. Examples: 1. The beneficiary may NOT increase the remuneration of its personnel, upgrade its travel policy or its purchasing rules because of the Commission/Agency support. 2. Entertainment or hospitality expenses (including gifts, special meals and dinners) are generally not eligible. 3. Tips which are not obligatory are not eligible. By contrast, in some countries the invoice of the restaurant includes a certain mandatory amount as payment for the ‘service’. In this case, the amount may be considered eligible — if the other eligibility conditions are fulfilled. Specific cases (actual costs): In-kind contributions free of charge and costs of linked third parties — For in-kind contributions provided by third parties free of charge and costs of linked third parties, the eligibility rules apply mutatis mutandis (see Article 6.3 and 6.4). Thus, the costs must be: H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 38  actually incurred by the third party  recorded in the third party’s accounting records  calculated in accordance with the accounting standards applicable in the country in which the third party is established  calculated according to the third party’s usual cost accounting practices. Depreciation costs for equipment used for the action, but bought before the action’s start — If the equipment has not yet been fully depreciated according to the beneficiary’s usual cost accounting practices, the remaining depreciation costs may be eligible (only for the portion corresponding to the action duration and for the rate of actual use for the action; see Article 6.2.D.2). Costs related to preparing, submitting and negotiating the proposals cannot be declared as eligible for the action (they are incurred before the action starts). Costs related to drafting the consortium agreement are not eligible because the consortium agreement should be signed before the action starts. However, costs related to updating the consortium agreement are eligible if incurred during the action duration. Travel costs for the kick-off meeting — Even if the first leg of the journey takes place before the action starting date (e.g. the day before the kick-off meeting), the costs may be eligible if the meeting is held during the action duration. Costs for reporting at end of the action — Costs related to drafting and submitting the periodic report for the last reporting period and the final report are eligible even if they are incurred after the action duration. Those costs include the cost of certificates on the financial statements required by the GA and the cost of participating in a final review carried out by the Commission/Agency before the submission of the final reports. They may also include the cost of personnel necessary to prepare the periodic report for the last reporting period and the final report. However, they do NOT include research or innovation activities undertaken after the end date of the action. 3. General eligibility conditions for unit costs In order to be eligible, unit costs must be:  calculated by multiplying the number of actual units used to carry out the work (e.g. number of hours worked on the action, number of tests performed, etc.) or produced (e.g. number of square meters for energy efficiency in buildings) by the amount per unit Example: A Commission decision that sets the amount per unit for laboratory analyses at EUR 300 per test. This amount per unit is also set out in Annex 2.  the number of units must be necessary for the action  the units must be used or produced during the action duration AND  the beneficiaries must be able to show the link between the number of units declared and the work on the action. The beneficiaries must be able to show (with records and supporting evidence; see Article 18) that the number of units declared was actually used for the action. (The actual costs of the work are not relevant.) Example: A beneficiary which is a SME declares for its owner who does not receive a salary 300 hours worked for an action in 2014. If there is an audit, the SME beneficiary must be able to show a record of the number of hours worked by the owner for the action. Specific cases (unit costs): H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 39 Personnel costs declared on the basis of the usual accounting practices — For personnel costs declared on the basis of the beneficiary's usual cost accounting practices (‘average personnel costs’), the beneficiary:  must calculate them (the average or standard personnel costs) according to its usual accounting practices  must budget and declare a total amount; the amount per unit must not be included in Annex 2. Other costs may NOT be declared according to the usual cost accounting practices. For them, the amounts per unit will be fixed by the Commission/Agency (in Annex 2 of the GA; see Article 5.2). Example: Costs of minor consumables (e.g. a department’s total minor consumable costs per hour worked), declared according to the beneficiary’s usual accounting practices. This is not possible under Horizon 2020 rules. 4. General eligibility conditions for flat-rate costs In order to be eligible, flat-rate costs must be:  calculated by applying a flat rate to certain costs (whether actual, unit or lump-sum costs). Example (25 % flat rate for indirect costs): A SME beneficiary that charges costs of its owner without a salary is working on an innovation action and uses the EUR30 per hour unit cost fixed in Annex 2 for personnel costs. The SME beneficiary declares as eligible 300 hours of direct personnel costs for its owner + EUR 1 400 for other direct costs + EUR 1 500 for subcontracting for work in an innovation action during the first reporting period. Eligible direct costs: (30 X 300 = 9 000) + 1 400 + 1 500 = 11 900 Eligible indirect cost: 25 % flat-rate of 9 000 + 1 400 (not the 1 500 for subcontracting) = EUR 2 600 Total eligible costs: 11 900 + 2 600 = EUR 14 500. Reimbursement rate of 70 % (innovation action, ‘for profit’ beneficiary) = EUR 10 150. The beneficiaries must be able to show (with records and supporting evidence; see Article 18) that the costs to which the flat-rate is applied are eligible. (The actual indirect costs are not relevant.) 5. General eligibility conditions for lump sum costs In order to be eligible:  the lump sum costs must correspond to the amount of lump sum costs set out in Annex 2 and  the work must have been carried out in accordance to Annex 1 of the GA. The beneficiaries must be able to show (with records and supporting evidence; see Article 18) that the action tasks have been carried out as described in Annex 1. (The actual costs of the work are not relevant). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 40 1. Specific conditions for costs to be eligible Article 6.2 refers to specific eligibility conditions, applicable per budget category. For ease of reference, the annotations for Article 6.2 will summarise — for each budget category — the information necessary to establish the eligible costs, i.e. 1. types of costs covered by the budget category 2. cost form under which the costs must be declared (i.e. actual costs, unit costs, flat rate) 3. conditions for eligibility 4. how the costs must be calculated. 2. Direct costs ‘Direct costs’ are specific costs directly linked to the performance of the action and which can therefore be directly booked to it. They are:  either costs that have been caused in full by the activities of the action  or costs that have been caused in full by the activities of several actions (projects), the attribution of which to a single action can, and has been, directly measured (i.e. not attributed indirectly via an allocation key, a cost driver or a proxy). 6.2 Specific conditions for costs to be eligible Costs are eligible if they comply with the general conditions (see above) and the specific conditions set out below for each of the following budget categories: A. direct personnel costs; B. direct costs of subcontracting; C. [OPTION to be used if Article 15 applies: direct costs of providing financial support to third parties;] [OPTION: not applicable;] D. other direct costs; E. indirect costs; F. [OPTION for specific unit[/lump sum] costs: [insert name(s) of specific cost category(ies)16]]. ‘Direct costs’ are costs that are directly linked to the action implementation and can therefore be attributed to it directly. They must not include any indirect costs (see Point E below). ‘Indirect costs’ are costs that are not directly linked to the action implementation and therefore cannot be attributed directly to it. 16 Insert precise name of the cost category (as in the Commission decision authorising the use of the unit cost/lump sum. For example: ‘access costs for providing trans-national access to research infrastructure’, costs for ‘clinical studies’, costs for ‘energy efficiency measures in buildings’. For a consolidated list of eligibility issues relating to specific situations/legal framework in individual countries, see the List of issues applicable to particular countries on the Participant Portal. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 41 The beneficiaries must be able to show (with records and supporting evidence) the link to the action. 3. Indirect costs ‘Indirect costs’ are costs that cannot be identified as specific costs directly linked to the performance of the action. In practice, they are costs whose link to the action cannot be (or has not been) measured directly, but only by means of cost drivers or a proxy (i.e. parameters that apportion the total indirect costs (overheads) among the different activities of the beneficiary). In Horizon 2020, indirect costs are declared as a 25% fixed flat-rate of the eligible direct costs (minus certain direct eligible costs; see Article 6.2.E). . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 42 A. Direct personnel costs [(not covered by Point F)] Types of eligible personnel costs A.1 Personnel costs are eligible, if they are related to personnel working for the beneficiary under an employment contract (or equivalent appointing act) and assigned to the action (‘costs for employees (or equivalent)’). They must be limited to salaries (including during parental leave), social security contributions, taxes and other costs included in the remuneration, if they arise from national law or the employment contract (or equivalent appointing act). Beneficiaries that are non-profit legal entities 17 may also declare as personnel costs additional remuneration for personnel assigned to the action (including payments on the basis of supplementary contracts regardless of their nature), if: (a) it is part of the beneficiary’s usual remuneration practices and is paid in a consistent manner whenever the same kind of work or expertise is required; (b) the criteria used to calculate the supplementary payments are objective and generally applied by the beneficiary, regardless of the source of funding used. Additional remuneration for personnel assigned to the action is eligible up to the following amount: (a) if the person works full time and exclusively on the action during the full year: up to EUR 8 000; (b) if the person works exclusively on the action but not full-time or not for the full year: up to the corresponding pro-rata amount of EUR 8 000, or (c) if the person does not work exclusively on the action: up to a pro-rata amount calculated as follows: {{EUR 8 000 divided by the number of annual productive hours (see below)}, multiplied by the number of hours that the person has worked on the action during the year}. A.2 The costs for natural persons working under a direct contract with the beneficiary other than an employment contract are eligible personnel costs, if: (a) the person works under the beneficiary’s instructions and, unless otherwise agreed with the beneficiary, on the beneficiary’s premises; (b) the result of the work carried out belongs to the beneficiary, and (c) the costs are not significantly different from those for personnel performing similar tasks under an employment contract with the beneficiary. A.3 The costs for personnel seconded by a third party against payment are eligible personnel costs if the conditions in Article 11.1 are met. A.4 Costs of owners of beneficiaries that are small and medium-sized enterprises (‘SME owners’), who are working on the action and who do not receive a salary are eligible personnel costs, if they correspond to the amount per unit set out in Annex 2 multiplied by the number of actual hours worked on the action. A.5 Costs of ‘beneficiaries that are natural persons’ not receiving a salary are eligible personnel costs, if they correspond to the amount per unit set out in Annex 2 multiplied by the number of actual hours worked on the action. [A.6 [OPTION to be used for trans-national access to research infrastructure: Personnel costs for H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 43 providing trans-national access to research infrastructure are eligible only if also the conditions set out in Article 16.1.1 are met.] [OPTION to be used for virtual access to research infrastructure: Personnel costs for providing virtual access to research infrastructure are eligible only if also the conditions set out in Article 16.2 are met.]] Calculation Personnel costs must be calculated by the beneficiaries as follows: {{hourly rate multiplied by number of actual hours worked on the action}, plus for non-profit legal entities: additional remuneration to personnel assigned to the action under the conditions set out above (Point A.1)}. The number of actual hours declared for a person must be identifiable and verifiable (see Article 18). The total number of hours declared in EU or Euratom grants, for a person for a year, cannot be higher than the annual productive hours used for the calculations of the hourly rate. Therefore, the maximum number of hours that can be declared for the grant are: {number of annual productive hours for the year (see below) minus total number of hours declared by the beneficiary, for that person for that year, for other EU or Euratom grants}. The ‘hourly rate’ is one of the following: (a) for personnel costs declared as actual costs: the hourly rate is the amount calculated as follows: {actual annual personnel costs (excluding additional remuneration) for the person divided by number of annual productive hours}. The beneficiaries must use the annual personnel costs and the number of annual productive hours for each financial year covered by the reporting period concerned. If a financial year is not closed at the end of the reporting period, the beneficiaries must use the hourly rate of the last closed financial year available. For the ‘number of annual productive hours’, the beneficiaries may choose one of the following: (i) ‘fixed number of hours’: 1 720 hours for persons working full time (or corresponding pro-rata for persons not working full time); (ii) ‘individual annual productive hours’: the total number of hours worked by the person in the year for the beneficiary, calculated as follows: {annual workable hours of the person (according to the employment contract, applicable collective labour agreement or national law) plus overtime worked minus absences (such as sick leave and special leave)}. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 44 1. Direct personnel costs: Types of costs — Cost forms — Conditions for eligibility — Cost calculation This budget category applies to all RIA, IA and CSA grants under the General MGA. An additional option for access to research infrastructure (together with the corresponding Article 16 and other provisions) will be inserted into the GA if the action also involves access to research infrastructure. The beneficiaries may declare the following types of costs as ‘direct personnel costs’: ‘Annual workable hours’ means the period during which the personnel must be working, at the employer’s disposal and carrying out his/her activity or duties under the employment contract, applicable collective labour agreement or national working time legislation. If the contract (or applicable collective labour agreement or national working time legislation) does not allow to determine the annual workable hours, this option cannot be used; (iii) ‘standard annual productive hours’: the standard number of annual hours generally applied by the beneficiary for its personnel in accordance with its usual cost accounting practices. This number must be at least 90% of the ‘standard annual workable hours’. If there is no applicable reference for the standard annual workable hours, this option cannot be used. For all options, the actual time spent on parental leave by a person assigned to the action may be deducted from the number of annual productive hours; (b) for personnel costs declared on the basis of unit costs: the hourly rate is one of the following: (i) for SME owners or beneficiaries that are natural persons: the hourly rate set out in Annex 2 (see Points A.4 and A.5 above), or (ii) for personnel costs declared on the basis of the beneficiary’s usual cost accounting practices: the hourly rate calculated by the beneficiary in accordance with its usual cost accounting practices, if: - the cost accounting practices used are applied in a consistent manner, based on objective criteria, regardless of the source of funding; - the hourly rate is calculated using the actual personnel costs recorded in the beneficiary’s accounts, excluding any ineligible cost or costs included in other budget categories. The actual personnel costs may be adjusted by the beneficiary on the basis of budgeted or estimated elements. Those elements must be relevant for calculating the personnel costs, reasonable and correspond to objective and verifiable information; and - the hourly rate is calculated using the number of annual productive hours (see above). 17 For the definition, see Article 2.1(14) of the Rules for Participation Regulation No 1290/2013: ‘non-profit legal entity’ means a legal entity which by its legal form is non-profit-making or which has a legal or statutory obligation not to distribute profits to its shareholders or individual members. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 45  costs for employees (or equivalent):  basic remuneration (basic salary and complements) and  for non-profit legal entities: additional remuneration (‘bonus payments’)  costs for natural persons working under a direct contract  costs for personnel seconded by a third party  costs for beneficiaries that are SMEs for their owners not receiving a salary  costs for beneficiaries that are natural persons not receiving a salary  personnel costs for providing trans-national or virtual access to research infrastructure (if option applies). 1.1 Direct personnel costs: Costs for employees (or equivalent) 1.1.1 What? ‘Personnel costs for employees or equivalent’ (i.e. persons working for the beneficiary on the basis of an employment contract or equivalent appointing act) cover:  the basic remuneration (i.e. basic salary and complements) and  only for non-profit legal entities: the additional remuneration for personnel that worked on the action. What is ‘basic remuneration’ and ‘additional remuneration’ and how to distinguish them? Basic remuneration refers to the ‘basic salary’ of the employee plus ‘complements’ that fulfil the eligibility conditions explained in point 1.1.3. The basic salary includes (and is limited to):  the salary stated on the beneficiary’s payroll (except for any part of that salary which must be considered as ‘additional remuneration’, even if it that part is also registered in the payroll)  social security contributions (mandatory parts to be paid by the employee and the beneficiary that employs him/her) — except any part included in additional remuneration.  taxes included in the remuneration (e.g. income tax to be paid by the employee retained by the beneficiary who employs him/her) — except any part included in additional remuneration.  other costs included in the remuneration (e.g. a fee paid by the beneficiary for a complementary health insurance scheme for the employee) — except any part included in additional remuneration. The complements may include:  mandatory fixed complements to the basic salary, resulting from national law, collective labour agreement or the employment contract Example (mandatory fixed complement): a 13th month payment; complement for hazardous work or night shifts; transportation allowance, etc.  variable complements not triggered by the work in specific projects17 if they fulfil the eligibility conditions set out in point 1.1.3. (for instance complements that are 17 'Project' in this context refers to a set of activities carried out with a specific aim. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 46 authorised under national law and foreseen in the employment contract with a variable amount for usual work) Example (variable complement acceptable as basic remuneration): The contract of a professor includes as part of his/her usual tasks both teaching and research; it foresees a basic fixed remuneration of 1 000 EUR/month plus a variable part of 10 EUR/hour for each hour spent on research activities. By contrast, additional remuneration refers to payments made on top of the employee’s usual remuneration (for instance for additional work or specific expertise), which result in a higher hourly rate in specific projects18. Additional remuneration includes not only the extra salary, but also the social security contributions, taxes and other costs included in the remuneration that result from that extra salary. Example (additional remuneration): a ‘bonus’ for participating in a project; an additional contract for specific tasks with a salary higher than the one under the main contract Example (not additional remuneration, but basic remuneration): additional salary paid to the employee for additional hours worked on its standard work or expertise as defined in the employment contract (e.g. overtime or additional contract for those additional hours), if the additional hours are remunerated according to the standard salary conditions of the employee (i.e. do not result in a higher hourly rate). Note that the standard salary conditions may provide for a mandatory complement for those additional hours (e.g. overtime during night shifts). Thus, the two main features that help characterising a remuneration component as basic or additional are:  hourly rate (no change to hourly rate would indicate basic remuneration, while a higher hourly rate would indicate generally additional remuneration) and  kind of work or expertise (usual kind of work or expertise according to the contract or different/additional work or expertise). Work or expertise Hourly rate Usual Higher Usual Indicates basic remuneration o Indicates additional remuneration: if triggered by the participation in a project o May however qualify as basic remuneration if not dependent on a project or type of projects (and therefore spread over all activities, e.g. based on merit of the employee at stake) Additional/different Indicates basic remuneration Indicates additional remuneration In case of doubt, the classification will be made also taking into account the classification of the component under national tax law (i.e. if the tax authorities explicitly consider it as part of the basic remuneration of the employee or as additional remuneration). 18 'Project' in this context refers to a set of activities carried out with a specific aim. It is the basic remuneration that must be used to calculate the hourly rate (see below). . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 47 1.1.2 Costs for employees (or equivalent) must be declared on the basis of:  either the individual actual personnel costs of each employee participating in the action (the most common case) or  on the basis of unit costs:  either calculated by the beneficiary in accordance with its usual cost accounting practices (i.e. ‘average personnel costs’) if in line with the specific eligibility criteria (see below) or  where applicable, unit costs fixed by the Commission; e.g. the mandatory unit cost for SME owners and natural persons without a salary. 1.1.3 The costs for employees (or equivalent) must comply with the following conditions for eligibility: For basic salary and mandatory complements:  fulfil the general conditions for costs to be eligible (i.e. incurred during the action duration, necessary, etc.; see Article 6.1(a) and (b)) Payments of dividends to employees (profit distribution) are ineligible under Article 6.5(a)(i). (However, complements based on the overall financial performance of the organisation (e.g. profitability or surplus) may be accepted as variable complements, if they fulfil the conditions set out below.) Examples (acceptable): If the profit of the company at the end of the year is more that X € (or more than X %), each employee will receive a complement of z % of his/her basic remuneration (or a fixed complement of x € more as part of the gross salary). Examples (not acceptable): If the profit of the company at the end of the year is more that X € (or more than X %), z % of that profit will be distributed to employees trough extra remuneration. Any part of the remuneration which is calculated with reference to commercial targets (e.g. x € for reaching a sales target, x % on sales) or fund raising targets (e.g. x € premium per externally funded project gained, x % of the external funding gained) is ineligible. The reason is that they are neither incurred in connection with the work described in Annex 1 of the action nor necessary for its implementation. Example (not eligible because linked to fund raising target): A premium paid as a reward for having obtained a specific grant is not eligible.  be fixed (conditions and amount or percentage) and mandatory according to national law, collective labour agreements or the employment contract Example: The employment contract between the entity and the person fixes a gross salary of EUR 3000 per month plus a transportation allowance of EUR 5 per working day.  be paid to the employee (or benefit to him/her) for his/her usual work, duties or tasks (as defined in the employment contract/equivalent appointing act). Therefore, they can NOT depend on the participation in a specific action/project A ‘payment linked to a specific action/project’ is a payment the employee would not have received if s/he had not participated in the work of the action/project (i.e. the triggering ONLY costs for personnel assigned to the action (i.e. working for the action according to internal written instructions, organisation chart or other documented management decision) can be eligible. (If the employment contract indicates that the person was hired to work on another project, it must be changed.) . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 48 event is the participation in the action/project (e.g. an EU action), not the performance of the tasks defined in the employment contract/equivalent appointing act). Any part of the remuneration linked to tasks other than those covered by the basic remuneration, in particular amounts triggered by the participation in a specific action/project, are NOT eligible as part of the basic remuneration. (They may however still be eligible as additional remuneration; see below.) For variable complements (in addition to the first and third conditions above):  the variable complement is authorised under national law, collective labour agreement or set up in the employment contract/equivalent appointing act. Examples: 1. The collective labour agreement establishes that all researchers may receive a complement between EUR 100 and EUR 200 per month based on their seniority. 2. The national law authorises public universities to pay a complement based on merit of the employees. 3. The contract fixes a premium of EUR 1000 for each research paper published in peer reviewed international research journals.  the amount to be actually paid as variable complement is determined on the basis of objective conditions (which should be established and documented, for instance in the internal regulations of the beneficiary). Example: Based on the provisions of the collective labour agreement (see first example above), the internal regulations of the employer provide that: all researchers with seniority between 3 and 5 years will receive a complement of EUR 150 and all researchers with seniority above 5 years will receive a complement of EUR 180. The variable complement must NOT be paid to the employee at the sole discretion of the manager (arbitrary complement). The decision to grant the complement should be be based on objective conditions, which should be documented and be verifiable. Example: National law authorises public universities to pay a complement based on merit or performance of the employees and the internal regulations of the public university provide for an annual assessment exercise to determine the 'merit points' of each employee. The internal regulations also set up the objective criteria based on which the 'merit points' are decided. The internal regulations provide that all researchers with more than 10 'merit points' will receive a complement of EUR 1000. If the Commission/Agency has doubts whether the decision to pay the variable complement is actually based on objective conditions it may still accept (a part of) the complement if:  the employee has already been receiving the same complement before the award of the H2020 grant (and independently from it)  the complement was not increased after the award of the H2020 grant AND  the other cost eligibility conditions are fulfilled. Increases of the complement after the award of the H2020 grant will be considered ineligible in these cases; the Commission/Agency would accept only the amount up to the level that was paid before the award of the H2020 grant. For additional remuneration (only for non-profit legal entities):  fulfil the general conditions for costs to be eligible (i.e. incurred during the action duration, necessary, linked to the action, etc.; see Article 6.1(a) and (b)) Additional remuneration that is not directly linked to the participation in the EU action (e.g. additional remuneration based on the participation in another project) is not eligible. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 49 Example: A nuclear researcher in a public research centre (non-profit) worked for 1 720 productive hours Remuneration components: a = annual salary: EUR 50 000 b = a complement for holding a management post (e.g. Head of department): EUR 1 600 c = additional remuneration for being Head scientist in the EU project: EUR 2 000 d = additional remuneration for being First Assistant on an internal action: EUR 1 000 a and b would be used to calculate the researcher’s hourly rate: hourly rate for the EU action = {(50 000 + 1 600)/1 720} = EUR 30 c would be subject to the specific eligibility conditions for additional remuneration. If eligible, it would be subject to the eligibility ceiling. d would not be eligible and would not be taken into account when calculating the hourly rate for the EU action, as it is not linked to the participation in the EU action.  be paid to the employee (or benefits him/her) for the performance of additional work or different expertise than his/her usual tasks The work to be carried out (or expertise used) must be different from the standard work or expertise (defined in the employment contract/equivalent appointing act and covered by the standard remuneration package). This difference must be verifiable.  be part of the beneficiary’s usual remuneration practices and be consistently applied whenever the same kind of work or expertise is required  be calculated on the basis of criteria that are objective and generally applied by the beneficiary, regardless of the source of funding used The objective criteria must be related to the additional work or expertise. Examples (acceptable criteria): A normal salary is paid for teaching + additional remuneration is paid for doing research. A normal salary is paid for research + additional remuneration is paid for taking up the management of the research team and infrastructure. A normal salary is paid for laboratory research + additional remuneration is paid for field research. A normal salary is paid for research on internal projects + additional remuneration is paid for participating in a special type of projects as for example international cooperative projects, projects awarded under competitive calls, etc. Examples (not acceptable criteria): Additional remuneration paid for using English. Additional remuneration is paid only when participating in EU-funded actions. The system for making additional payments should be established in the beneficiary’s internal rules (or at least be documented and known by the employees). (Like for variable complements, the additional remuneration must NOT be paid to the employee at the sole discretion of the management (arbitrary complement).) Example (acceptable): All teachers carrying out research on top of their usual teaching activities get an extra payment of 10 % of their salary. Example (not acceptable): The director decides at its sole initiative to pay an extra 10 % to one professor carrying out research. However, the additional remuneration does not have to be the same for all persons working in the same project. The objective criteria used to determine the additional remuneration may result in different amounts for persons working in the same project (e.g. the rule is that all teachers that carry out research on top of their usual teaching activities get an extra payment between 10 % and 20 % of their salary, the precise percentage per teacher and project is determined according to the level of responsibility in the specific project). The rules for additional remuneration may not differ according to where the funds come from. In particular, they cannot be set up for actions funded by a specific donor. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 50 (Additional remuneration schemes that are applicable only to EU actions are not acceptable.) Example (acceptable): All professors carrying out research will be paid 10 % more. Example (not acceptable): All professors carrying out research will be paid 10 % more when they work on EU-funded actions. Also, they may not be subject to budget availability (i.e. only to be paid if there is remaining funds in the project budget). Additional remuneration is eligible only up to a certain ceiling (‘eligibility ceiling’; see point 1.1.4). To avoid abuses, the rules for additional remuneration will be exceptionally also applied to the basic remuneration, if it has been artificially increased for participation in the EU action. Examples: 1. A researcher worked for the beneficiary, resigned, and subsequently signed a new contract with the beneficiary to work on the EU action for a higher salary. The rules for additional remuneration will apply to the difference between the salary it used to receive (before resigning) and the new higher salary (see point 1.1.4). 2. A researcher worked for the beneficiary, resigned, and subsequently signed a new contract with a linked third party (or a third party providing in-kind contribution) to work on the EU action for a higher salary. The rules for additional remuneration will apply to the difference between the salary it used to receive (before resigning) and the new higher salary (see point 1.1.4). 3. Employees of a specific department/service of the company which is in charge of carrying out only EU actions are paid a higher salary than their homologues in other departments carrying out the same tasks requiring a similar level of expertise (i.e. the salary differential is attributable to the source of funding). The rules for additional remuneration will apply to the difference between the salaries of employees working for the specific department and those of employees of other departments carrying out the same tasks with the same level of expertise (see point 1.1.4). . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 51 Decision tree to determine eligibility of complements: Specific cases (direct personnel costs for employees (or equivalent)): Teleworking — Remuneration costs of employees (or equivalent) not working on the premises of the beneficiary (i.e. teleworking) may be accepted as eligible if it is the beneficiary’s usual practice (i.e. if clear rules are available). The system in place must make it possible to both identify and record the hours worked for the action. Benefits in kind — Costs of benefits in-kind provided by the beneficiary to its personnel (e.g. costs of a company car made available to certain categories of employees for their own use) or of benefits equivalent to financial ones (e.g. costs of lunch vouchers) may be accepted as eligible if they are justified and registered as personnel costs in conformity with the beneficiary’s usual remuneration practices. Like all costs, they must fulfil the eligibility conditions set out in Article 6. Recruitment costs — Recruitment costs are generally not eligible as direct personnel costs, because the beneficiary is required to have the necessary human resources to implement the action. If a beneficiary needs to recruit additional personnel during the action duration, the related costs would be considered part of the entity’s normal indirect costs, which are covered in Horizon 2020 by a 25 % flat- rate of the eligible direct costs. Remuneration of students working for the beneficiary under a scholarship, internship or other similar agreement (not employees) — Like any personnel costs, personnel costs of students (including PhDs) are eligible if they fulfil the conditions set out in Article 6. In this context, fellowships/scholarship/stipends are assimilated to salaries provided that:  this remuneration complies with the application national law on taxes, labour and social security H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 52  the assignment of tasks respects the laws in force in the place of establishment of the beneficiary  the students have the necessary qualifications for the performance of the tasks attributed to them in the context of the H2020 action. Thus, if the agreement is training-oriented (i.e. aimed at helping the student to acquire professional skills) its cost can NOT be charged to the grant. Academic fees — If a student works for a university and is exempt from paying (part of) the academic fees, those fees (or part of them) are eligible as a personnel cost if the student’s contract included the amount of waived fees as part of his/her remuneration. The other conditions set out in Article 6 have to be fulfilled as well (e.g. the full remuneration, included the value of the waived fees, must be recorded in the university’s accounts). Parental leave — Salaries and social security contributions paid during parental leave (either maternity leave or parental leave) are eligible as part of the basic salary only if:  they are mandatory under national law, under the relevant collective labour agreement (e.g. statutory maternity pay) or under the employment contract  the beneficiary has actually incurred them  they are not reimbursed by national (central, regional or local) authorities (i.e. only the net amounts paid by the beneficiary are eligible) AND  the employee worked for the action during the financial year used for calculating the personnel costs. Costs related to public officials — For public bodies, the costs related to public officials paid directly from central, regional or local government budgets may be considered eligible, if they fulfil the conditions set out in Article 6 (applied to the central, regional or local government employing the public officials). In this case, the public officials will be considered as in-kind contributions (resources made available) provided by a third party (the government) free of charge (see Article 12). Supplementary contracts — Supplementary contracts (whatever their form, i.e. a contract additional to the main contract between a beneficiary and its employee) for carrying out tasks for specific actions (e.g. international projects) are acceptable, if it is the beneficiary’s usual practice and it is authorised under national law. However, the difference between the remuneration paid in the additional contract and the standard remuneration package (basic remuneration) in the first non-action-related contract is considered ‘additional remuneration’. As such it is subject to the specific cost eligibility conditions explained above for additional remuneration and, if eligible, to the eligibility ceiling. 1.1.4 The costs must be calculated as follows: {{hourly rate multiplied by number of actual hours worked on the action}, plus for non-profit legal entities: additional remuneration to personnel assigned to the action under the conditions set out above (Point A.1)}. This calculation method also applies for persons working exclusively for the action. Procedure for calculating direct personnel costs for employees (or equivalent): Step 1 — Calculation of the hourly rate (per person) ONLY hours actually worked on the action can be counted. Such hours must be registered via time records or, if the person works exclusively in the action, via a declaration (see Article 18.1.2). The total number of hours declared in EU and Euratom grants for a person for a year may NOT be higher than the number of annual productive hours used for the calculation of the hourly rate (see below). . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 53 According to the GA, the hourly rate — for personnel costs declared as actual costs — must be calculated as follows: {actual annual personnel costs (excluding additional remuneration) for the person divided by number of annual productive hours}. Example (for calculation of hourly rate): A nuclear researcher working for a public research laboratory (non-profit) worked 1 600 productive hours. Remuneration components: a = annual salary: EUR 50 000 b = extra payment for holding a post involving radioactive hazards: EUR 5 000 c = additional remuneration for being Head Scientist in a Project: EUR 2 000 a and b would be used to calculate the hourly rate. The calculation must exclude any additional remuneration which, if eligible, will have to be calculated separately. Hourly rate for the action = {(50 000 + 5 000)/1 600} = EUR 34 For the sake of simplicity and in order to avoid calculation errors, the hourly rate must be calculated by financial year (i.e. the 12-month period covered by the annual accounts of the entity) and has to be made always on the basis of full financial years. Example: When the financial year matches the calendar year, i.e. 1st January – 31st December, the hourly rate for the hours worked in 2014 will be calculated using the personnel costs and the productive hours from January to December 2014. When at the end of the reporting period there are months for which the financial year is not closed yet (e.g. the financial year is still on-going; necessary information for that year is not yet available, etc.), the beneficiary must use the figures of the last closed financial year available to declare the costs for those months (i.e. use the hourly rate of the last closed financial year available also to calculate the personnel costs for the hours worked on those months). Example: Action with 1 reporting period of 18 months from 1.10.2015 to 31.3.2017. The beneficiary’s financial year closes on 31 December of every year. Calculation of the hourly rate: For hours worked on the action from 1.10.2015 - 31.12.2015: the hourly rate of 2015 must be used; i.e. hourly rate calculated on the basis of the annual personnel costs and annual productive hours of the closed financial year 2015. For hours worked on the action from 1.1.2016 – 31.12.2016: the hourly rate of 2016 must be used; i.e. hourly rate calculated on the basis of the annual personnel costs and annual productive hours of the closed financial year 2016. For hours worked on the action from 1.1.2017 – 31.3.2017: the hourly rate calculated for the last closed financial year available must be used, e.g. the one of the year 2016. Therefore, the beneficiary will not calculate another hourly rate for the period from 1.1.2017 - 31.3.2017. Instead, it will simply continue applying the hourly rate calculated for 2016 for the hours worked in 2017 until 31.03. Last closed financial year available refers to the most recent full financial year for which all information necessary to calculate the hourly rates in accordance to the GA is available. Therefore, it is NOT necessary to wait until the annual accounts have been audited. Once declared, the personnel costs can normally NOT be adjusted/changed due to a re-calculation of the hourly rate (even if a re-calculation after the closure of the financial year on-going at the end of the period would give another result). A correction is only possible (and must be made) if there was a mistake in the calculation of the hourly rate that was used to declare those costs (e.g. incorrect accounting information). Example: An internal audit on the annual accounts of the beneficiary finds later errors in the accounting information used to calculate the hourly rates. Financial year different from fiscal year — If the financial year is different from the fiscal year (i.e. the 12-month period used to calculate the income taxes), the entity may use the fiscal year instead of the financial year for calculating the H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 54 hourly rate for personnel costs. The method must however be consistently applied and can NOT be changed within the same grant. The annual personnel costs may include only eligible personnel costs and must exclude eligible additional remuneration (because that will be added separately at the end of the calculation). Any part of the basic remuneration which is paid once a year (e.g. holiday pay) will be taken into consideration for the hourly rate of the year in which it was accrued in the accounts. For calculating the annual productive hours, the beneficiary must use one of the following three options:  1 720 hours for persons working full time (or corresponding pro-rata for persons not working full time) (‘1720 fixed hours’)  the total number of hours worked by the person in the year for the beneficiary (‘individual annual productive hours’)  the ‘standard number of annual hours’ generally applied by the beneficiary for its personnel in accordance with its usual cost accounting practices (‘standard annual productive hours’). In principle, the same option must be applied to all personnel working for the beneficiary in H2020 actions. However, the beneficiary may use different options for different types of personnel, if:  the same option is applied at least per group of personnel employed under similar conditions (e.g. same staff category, same type of contract, etc.) and  the options are applied consistently (e.g. the choice of the option is not changed at-hoc for specific employees). The beneficiary must use the same option(s) for calculating the annual productive hours during one full financial year. It can only change its option(s) for the next financial year. If the person concerned was on parental leave during the year, the annual productive hours may be reduced by the actual time spent on parental leave. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 55 This table explains the three different options for annual productive hours: Options What does it mean? When can it be used? How should it be used? What happens if you make a mistake? Option 1 1 720 fixed hours The number of hours is fixed for full-time employees (and it is pro- rata for employees working part- time or working only part of the year for the beneficiary). Can be used in all cases; any beneficiary can use this option. A pro-rata of 1720 hours can be used if:  the employee has not worked the full year for the beneficiary or  the employee’s contract explicitly states (or allows to determine) a precise percentage of a full-time- equivalent covered by such contract. Examples (pro-rata calculations): 1. Researcher X worked for Beneficiary Z from 1 October to 31 December; i.e. 3 full months. The pro-rata of the annual productive hors would be calculated as follows: 1720 / 12 (months) * 3 (October, November, December) = 430 productive hours 2. The contract of Researcher Y with Beneficiary Z establishes that it must work 20 hours per week, while a full-time employee at Beneficiary Z works 40 hours per week. Working days and leave entitlements are the same. The annual productive hours would be calculated as follows: 1720 * [20 hours (Researcher Y) / 40 hours (full-time employee)] = 1720 * 50 % (part-time percentage) = 860 productive hours Option 2 Individual annual productive hours The number of hours is calculated on the basis of the ‘annual workable hours’ of the employee (i.e. the total number of hours for which a employee is working for the beneficiary, including the overtime worked and absences (such as sick leave or other types This option can be used, if:  the number of ‘individual annual productive hours’ is calculated according to the formula specified in the grant agreement {annual workable hours of the person (according to the employment contract, applicable labour agreement or national law) If our auditors find that a beneficiary made a mistake, the Commission/Agency will recalculate the eligible costs as follows:  if the calculation method was not consistently applied (e.g. the beneficiary used option 2 for one employee and option 3 for another employee employed under similar conditions): the auditors will adjust the number of annual productive H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 56 of special leave). plus overtime worked minus absences (such as sick leave and special leave)}  the ‘annual workable hours’ are established according to one of the following:  employment contract of the person concerned  applicable collective labour agreement  national law on working time. Example: contract stipulating 35 hours of work per week  this calculation method is consistently applied (per group of personnel under similar conditions). Example for calculation of individual annual workable hours: X is a full-time researcher (working eight hours per day, from Monday to Friday) at Research Centre Z. X’s contract includes 22 working days of annual leave, plus eight days of public holidays. In the financial year covered by the reporting period in question, X worked 29 hours of overtime and was on sick leave for five days. The individual annual workable hours would therefore be: 365 days — 104 days (Saturdays and Sundays) — 22 days (annual leave) — 8 days (public holidays) = 231 days x 8 hours per day = 1 848 hours Individual annual productive hours for Researcher X: Annual working hours = 1 848 + overtime (hours) = 29 - annual sick leave (5 days x 8 hours) = 40  individual annual productive hours for Researcher X = 1 837 Research Centre Z may use 1 837 as individual annual productive hours for this researcher. hours by applying option 2 to all persons concerned, where possible.  if the employment contract, applicable collective labour agreement or national working time legislation does not allow determining the number of individual annual workable hours: the auditors will apply option 1.  if not all annual workable hours were included, the auditors will recalculate the productive hours to include all workable hours. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 57 Option 3 Standard annual productive hours The number of hours is calculated on the basis of the ‘standard annual productive hours’ generally applied by the beneficiary for its personnel, in accordance with its usual cost accounting practices. The standard annual productive hours may be calculated for the entity as a whole, per category of personnel, per cost centre, etc. The beneficiary may include or exclude certain activities (e.g. general training, general meetings etc.) when calculating the standard annual productive hours, if this is in line with its usual cost accounting practices. This option can be used if:  the number of standard annual productive hours is calculated in accordance with the beneficiary’s usual cost accounting practices  this calculation method is consistently applied (per group of personnel under similar conditions)  the number of standard annual productive hours is at least 90 % of ‘standard annual workable hours’ The standard annual workable hours is the standard number of hours that a full time employee of the group having the same standard productive hours (‘reference group’, e.g. a category of employees, employees of a cost centre, etc.) must be present at work under normal circumstances, as defined in:  the employment contracts of the reference group  an applicable collective labour agreement or  the national law on working time legislation. If its number of standard annual productive hours is higher than 90 %, the beneficiary must use the number of standard annual productive hours. If its number of standard annual productive hours is lower than 90 %, the beneficiary must use the 90 % or choose one of the other options. If our auditors find that a beneficiary made a mistake, the Commission/Agency will recalculate the eligible costs as follows:  if the standard annual productive hours were calculated not in accordance with the beneficiary’s usual cost accounting practices, the auditors will adjust the number of annual productive hours by applying option 2, if possible;  if the calculation method was not applied consistently, the auditor will adjust the number of annual productive hours by applying option 2, if possible;  if there is no applicable reference for the standard annual workable hours, the auditors will apply option 1;  if the number of standard annual productive hours used by the beneficiary was lower than 90 % of standard annual workable hours, the auditor will use either the 90 % of workable hours or option 1, whichever is more favourable for the beneficiary.  if the two first indents in the middle column (number calculated in accordance with usual accounting practices AND calculation method This option can NOT be used if the employment contract, collective labour agreement or national law does not allow to determine the number of individual annual workable hours. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 58 Example for calculation of standard annual workable hours: Full-time researchers hired by Research Centre Z have an employment contract that states that they must work eight hours per day, from Monday to Friday. National legislation provides for 22 working days of annual leave, plus eight days of public holidays. The applicable collective labour agreement adds three extra days of annual leave. The standard annual workable hours for Research Centre Z would therefore be: 365 days — 104 days (Saturdays and Sundays) — 22 days (annual leave) — 8 days (public holidays) — 3 days (collective agreement) = 228 days * 8 hours per day = 1 824 hours Standard annual productive hours for Research Centre Z: Research Centre Z would like to use its usual cost accounting practices to calculate the hourly rates for EU actions. It calculates the number of standard annual productive hours as follows: Annual working days = 228 - average annual sick leave (days) = 3 - days of general training = 4 - other unproductive activities (days) = 9  productive days = 212 Multiplied by 8 working hours per day  standard annual productive hours = 1 696 This number of standard annual productive hours must then be compared with 90 % of standard annual workable hours (in this example 1 824). 90 % of 1824 = 1 642 1 696 hours (usual cost accounting practice) > 1 642 hours (90 % annual workable hours) Research Centre Z may apply its number of standard annual productive hours (i.e. 1 696) to EU actions since the number is higher than 90 % of annual workable hours. If its number of standard annual hours is lower than 1 642 (e.g. 20 days of other unproductive tasks instead of 9  1 608 annual consistently applied) are fulfilled but the beneficiary uses 90 % of standard annual workable hours instead of the number of annual productive hours arrived at by using its usual accounting practices (higher than 90 %), the auditor will adjust the number of productive hours to the higher number. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 59 productive hours), Research Centre Z must apply 1 642 hours (90 % of the annual workable hours). If its number of standard annual productive hours is higher than 90 % (in our example it is 93 %: 1 696/1 824), Research Centre Z must use this number (and not 90 % of annual workable hours). This option can NOT be used if the employment contract, collective labour agreement or national law does not allow determining the number of annual workable hours for the group of personnel. Example (no applicable reference for standard annual workable hours): A researcher carries out research for the beneficiary for a fixed salary per month. However, the employment contract does not allow determining the number of hours to be worked. There is no applicable collective agreement and national legislation does not regulate the number of workable hours per year for this type of labour agreement. In this case, there is no applicable reference for standard annual workable hours. Therefore, the beneficiary must use option 1 (1 720 annual productive hours). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 60 Step 2 — Multiplying the hourly rate by the number of actual hours worked on the action By multiplying the hourly rate by the number of hours actually worked by the person, the beneficiary determines the amount it can declare as personnel cost. Step 3 — For non-profit legal entities: addition of the additional remuneration (if any) If the person received eligible additional remuneration (and if the beneficiary is a non- profit legal entity), it may also declare the share of the additional remuneration that can be attributed to the action in the way described below. If the resulting amount is above the following eligibility ceilings, it must be capped: Occupation Contract hired full time during the entire year NOT hired full time during the entire year working exclusively for the EU action during the full financial year EUR 8 000 pro-rata amount of EUR 8 000 NOT working exclusively for the EU action during the full financial year {8 000 / annual productive hours FTE} * hours worked for the action over the year The eligibility ceiling is fixed at EUR 8 000 per year for each full-time-equivalent (FTE), i.e. EUR 8 000 for a full-time employee working exclusively for the action during the entire year. This ceiling covers not only the additional salary but also all additional taxes, costs and social security contributions triggered by the additional salary. For an employee working exclusively for the action but not hired full time during the entire year, the ceiling is reduced pro-rata. Examples: 1. A researcher employed part time by the beneficiary to work four days a week during the entire year would correspond to 0.8 FTE  the ceiling would be fixed at EUR 8 000* 0.8 = EUR 6 400 per year. 2. A researcher employed full time to work for the action from January to March (i.e. for three months) would correspond to 0.25 FTE (3 out of 12 months)  the ceiling would be fixed at EUR 8 000 * 0.25 = EUR 2 000. If the researcher was employed part time (e.g. 80 %)  the ceiling would be adjusted as follows: 8 000 * 0.25 * 0.80 = EUR 1 600. For an employee not working exclusively for the action, the ceiling is calculated pro-rata, based on the hours worked for the action. Therefore, additional remuneration paid on top of the standard hourly rate is eligible up to a maximum of: EUR 8 000 * hours worked by the employee for the action over the year annual productive hours of an FTE Example: An employee received a EUR 2 000 bonus for being Head of Project for the EU action. S/he worked 1 600 annual productive hours, 800 of them for the EU action. Maximum additional remuneration eligible for the EU action (eligibility ceiling): {EUR 8 000 / 1 600} * 800  5 * 800 = EUR 4 000 H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 61 The additional remuneration paid for the EU action is eligible in full because it is lower than the eligibility ceiling (2 000 < 4 000). If the additional remuneration paid for being Head Scientist in the action had been EUR 7 000 instead of EUR 2 000, the eligibility ceiling would apply and only EUR 4 000 could be charged to the action (even if the actual payment was EUR 7 000). If the researcher had worked 200 hours instead of 800 hours for the EU action, the eligibility ceiling would have been: {(EUR 8 000 / 1 600} * 200  5 * 200 = EUR 1 000 In this case, the ceiling would also apply, since EUR 2 000 (additional remuneration paid) > EUR 1 000 (ceiling). Only EUR 1 000 could be charged to the action even if the actual payment was EUR 2 000. Example for calculating direct personnel costs for employees (or equivalent): A nuclear researcher working for a public research laboratory (non-profit) worked: 1 600 productive hours 800 hours declared for the action (at an hourly rate of EUR 40) 400 hours declared for another EU grant S/he received eligible additional remuneration of EUR 2 000 for being Head of Project. Calculation of the personnel costs: EUR 40/hour * 800 hours = 32 000 Addition of the additional remuneration: = 2 000 Total costs charged to the action for the year: 32 000 + 2 000 = EUR 34 000 Condition: Actual hours declared for action + actual hours declared for another EU grant ≤ total productive hours (800 + 400 < 1 600) Specific cases (direct personnel costs for employees (or equivalent)): Persons working exclusively on the action — There is NO different calculation method for staff working 100 % on the action. (The percentage of time dedicated to the action does NOT make a difference for the way how personnel costs must be calculated; it matters only for the types of records that must be kept (see Article 18.1.2)). Therefore, the calculation method for personnel costs of Article 6.2.A applies. For persons who sign the ‘declaration on exclusive work for the action’ the number of hours worked in the action during the period covered by the declaration will be the pro-rata (corresponding to the period of exclusive dedication) of the annual productive hours used to calculate the hourly rate. Example: Researcher Y worked exclusively in the H2020 action during the reporting period running from 1.10.2014 to 31.03.2016. Its actual annual personnel costs were EUR 32 000 for 2014 and EUR 34 400 for 2015. The beneficiary applies 1720 as annual productive hours. The personnel cost to be reported would be calculated as follows: Hourly rate Hours worked for the project 2014  (32 000 / 1720) x [(1720 / 12 months) x 3 (Oct, Nov, Dec)] 18,60 x 430 = 8 000 2015  (34 400 / 1720) x 1720 20 x 1720 = 34 400 2016  The financial year is not completed so we use the 2015 hourly rate 20 x [(1720 / 12 months) x 3 (Jan, Feb, Mar)] = 8 600 TOTAL = 51 000 Employees hired during on-going financial year (at the end of the reporting period) — Since these employees did not work for the beneficiary during the last financial year, the hourly rate can only be calculated on the basis of his/her personnel costs incurred during the reporting period. Example: The reporting period runs from 1.10.2014 to 31.03.2016. The beneficiary hires a new employee on 1.2.2016  the hourly rate would be calculated taking into account his/her personnel costs for February and March 2016. In order to avoid calculation errors, it is particularly important to determine the pro-rata of the annual productive hours correctly (e.g. if 1 720 hours are used, the productive hours for the period February-March would be 1 720 /12 * 2 = 287). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 62 End-of-contract indemnities — Since the entitlement to end-of-contract indemnities is most often generated over a period of time longer than a financial year, the beneficiary may charge the corresponding part of the indemnity in the reporting period in which the employee’s contract ends. However, the indemnity may be accepted ONLY if:  arise from the applicable national labour law  is recorded in the accounts of the beneficiary and  is incurred during the action duration (although the actual payment may take place latter). Only the part of the indemnity that corresponds to the time worked by the person on the action can be charged (i.e. pro-rata of the total time during which the entitlement was generated). Employment contract remunerated ‘per hour’ — Some employment contracts do not establish a fixed salary and a number of hours to be worked, but an amount to be paid for each hour worked by the employee. In those cases, individual annual productive hours (i.e. option 2) can only be applied if all of the following conditions are fulfilled:  the employment contract explicitly fixes the hourly rate to be paid  the employment contract established that the salary is the result of multiplying the hourly rate by the number of hours worked  the total salary paid under the employment contract is identifiable and supported by auditable documents (e.g. payslips and declarations to the tax authorities)  the employment contract is the only contract between the person and the entity (i.e. there is no other parallel contract). If those conditions are fulfilled, the ‘individual annual productive hours’ may be calculated as follows: {total salary paid to the employee in the financial year divided by hourly rate fixed in the employment contract}. Personnel costs on the basis of the usual cost accounting practices — For personnel costs declared on the basis of the beneficiary’s usual cost accounting practices (i.e. ‘average personnel costs’), the hourly rate must be calculated in accordance with the beneficiary’s usual cost accounting practices for determining the hourly rates of its personnel. The GA sets the following conditions:  the cost accounting practices used must be applied in a consistent manner, based on objective criteria, regardless of the source of funding The beneficiary must consistently apply its usual cost accounting practices, based on objective criteria that must be verifiable if there is an audit. It must do this no matter who is funding the action. This does not mean that cost accounting practices must be the same for all types of employees, departments or cost centres of the beneficiary. If, for instance, the beneficiary’s usual cost accounting practices include different calculation methods for permanent personnel and temporary personnel, this is acceptable. However, the beneficiary cannot use different methods for specific research actions or projects on an ad-hoc basis. Example (acceptable usual cost accounting practices): Individual (actual) personnel costs are used for researchers, average personnel costs (unit costs calculated in accordance with the beneficiary’s usual cost accounting practices) are used for technical support staff. Example (unacceptable usual cost accounting practices): Average personnel costs are used to calculate costs in externally-funded projects only.  the hourly rate must be calculated using the actual personnel costs recorded in the beneficiary’s accounts, excluding any ineligible cost or costs already included in other budget categories Any cost considered ineligible by the Commission but included in the beneficiary’s usual accounting practices must be excluded when calculating the personnel costs for the action. If necessary, it must be adjusted to fulfil all eligibility conditions. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 63 Example: A beneficiary calculates the hourly rate in accordance with its usual cost accounting practices and includes taxes not included in remuneration. These are ineligible and must therefore be removed from the hourly rate declared for personnel working on the action. Costs that are already included in other budget categories must be taken out (double funding of the same costs). Example: Beneficiaries whose cost accounting practices include for the calculation of the hourly rate indirect costs under Article 6.2. These indirect costs must be removed from the pool of costs used to calculate the hourly rate charged to H2020 actions. In H2020 actions, indirect costs must be declared using a flat rate of 25 %, so personnel costs cannot include any indirect costs. Budgeted or estimated figures are not costs actually incurred and may only be accepted as eligible components of the hourly rate if they:  are relevant, i.e. clearly related to personnel costs  are used in a reasonable way, i.e. they do not play a major role in calculating the hourly rate  correspond to objective and verifiable information, i.e. their basis is clearly defined and the beneficiary can show how they were calculated Example: Calculating average 2014 hourly rates by using 2013 payroll data and increasing them by adding the CPI (consumer price index) on which the basic salaries are indexed.  the hourly rate must be calculated using one of the three options provided in the MGA for the number of annual productive hours (e.g. option 3 ‘standard annual productive hours’). Beneficiaries may request the approval of the methodology used by them, by submitting (via the following address: EC-H2020-UNIT-COST-METHODOLOGY-CERTIFICATION@ec.europa.eu) an audit certificate on their usual cost accounting practices (see Article 18.1.2(b) and Annex 6). Costs declared in line with an approved methodology will not be challenged subsequently (unless the beneficiaries concealed information for the purpose of the approval). 1.2 Direct personnel costs: Costs for natural persons working under a direct contract 1.2.1 What? This budget category covers typically the costs of in-house consultants and similar persons that worked on the action (i.e. self-employed natural persons – not companies – working part-time or full-time for the action under a contract which is not governed by labour law for employees). What not? Persons provided by a temporary work agency or, more generally, by any other entity against a price (because in this case there is no direct contract between the person and the beneficiary; the contract is not with the beneficiary but with the entity hiring the person). Those costs may however be eligible as:  ‘purchase of services’ (see Article 10) if the work done by the person is not part of the action tasks identified in Annex 1, or  ‘subcontracting cost’ (see Article 13) if the work done by the person is part of the action tasks identified in Annex 1. In both cases, the beneficiary must comply with the conditions of best value for money and no conflict of interest when concluding the contract/subcontract (as well as with the other eligibility conditions). 1.2.2 Costs for natural persons working under a direct contract may be declared as actual costs or on the basis of unit costs in accordance with the usual cost accounting practices (i.e. ‘average personnel costs’; see Article 5.2(a)). 1.2.3 The costs must comply with the following conditions for eligibility:  fulfil the general conditions for costs to be eligible (i.e. incurred/used during the action duration, necessary, linked to the action, etc.; see Article 6.1(a) and (b)) H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 64  there must be a direct contract between the natural person (individual) and the beneficiary The contract cannot be with a third party legal entity (e.g. a temporary work agency).  the person must work under the beneficiary’s instructions and, unless otherwise agreed with the beneficiary through a teleworking agreement, on the beneficiary’s premises It must be the beneficiary who decides on, designs and supervises all work. The consultant must report to the beneficiary.  the result of the work carried out must belong to the beneficiary The work carried out, including any resulting patents or copyright, must belong to the beneficiary.  not be significantly different from costs for personnel performing similar tasks under an employment contract with the beneficiary. The remuneration must be based on working hours, rather than on delivering specific outputs/products. This implies that the beneficiary must keep records of the hours worked for the action (e.g. time-sheets etc.; see Article 18.1.2). 1.2.4 Costs of natural persons working under a direct contract for a beneficiary must be calculated according to the same formula as the one explained in point 1.1.4 (i.e. hourly rate multiplied by the number of actual hours worked on the action). However, the hourly rate is different (since it is not based on the annual personnel costs as registered on the payroll). For the hourly rate, the beneficiaries must use one of the following options:  if the contract specifies an hourly rate: this hourly rate must be used  if the contract states a fixed amount for the services of the natural person and the number of hours to be worked: this global amount must be divided by the number of hours to be worked for the beneficiary under that contract. If the contract fixes only a global amount and does not specify the time to be worked, the costs can NOT be declared as personnel costs, but may be eligible as purchase of a service (see Article 10) or a subcontract (see Article 13). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 65 This table explains how to treat different types of work contracts for declaring costs under H202019: General case: Single contract between the entity and the person Characteristics of the contract Contract remunerating time (e.g. the contract establishes that the person must work for the hiring entity 40 hours per week) Contract remunerating duties (without specifying the working time conditions) (e.g. the contract establishes that the person must carry out a specific task but the time to be worked (hours) is not defined in the contract, collective labour agreement or national law) The contract is an employment contract, i.e.:  recognized as such by the national labour law AND  the hiring entity pays social security contributions for the hired person CASE A This is the standard situation. The costs may be declared as ‘personnel costs – costs of employees (or equivalent)’ (Article 6.2.A.1). They must be calculated as described in Article 6.2.A. Calculation (point 1.1.4 above):  The beneficiary may choose among the three options for annual productive hours to calculate the hourly rate. CASE B The costs may be declared as ‘personnel costs – costs of employees (or equivalent)’ (Article 6.2.A.1). They must be calculated as described in Article 6.2.A. Calculation (point 1.1.4 above):  However only option 1 (i.e. 1720 annual productive hours) can be used to calculate the hourly rate.  If the employment contract does not cover the full financial year, the annual productive hours must be calculated as a pro-rata of 1720. Example: Contract from 01/01/2015 to 31/03/2015. Annual productive hours = (1720/12) x 3 (Jan, Feb, Mar) = 430  The personnel cost will be the result of multiplying the hourly rate by the number of hours worked by the person for the action (as recorded in its time-sheets). 19 These explanations do NOT apply to SME owners or beneficiaries that are natural persons not receiving a salary (see Article 6.2.A.4 and 6.2.A.5). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 66 Other contract (i.e. not covered above) CASE C1: the costs fulfil the conditions of Article 6.2.A.2. The costs may be declared as ‘personnel costs – costs for natural persons working under a direct contract’ (Article 6.2.A.2). The costs must be calculated as described in point 1.2.4. CASE C2: the costs do NOT fulfil the conditions of Article 6.2.A.2. The costs can NOT be declared as ‘personnel costs’. However, they may be eligible under another budget category:  if the contract covers tasks described in Annex 1: as ‘direct costs of subcontracting’ (Articles 6.2.B and 13) or  as ‘costs of other goods and services’ (Articles 6.2.D.3 and 10). CASE D The costs can NOT be declared as ‘personnel costs’. However, they may be eligible under another budget category:  if the contract covers tasks described in Annex 1: as ‘direct costs of subcontracting’ (Articles 6.2.B and 13) or  as ‘costs of other goods and services’ (Articles 6.2.D.3 and 10). The beneficiary must award the contracts ensuring best value for money and avoiding any conflict of interests (see Articles 10 and 13). The beneficiary must award the contracts ensuring best value for money and avoiding any conflict of interests (see Articles 10 and 13). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 67 Special case: the contract covering the work for the H2020 action is additional to other contract(s) of the person with the entity Characteristics of the additional contract Additional contract remunerating time (e.g. the additional contract establishes that the person must work for the hiring entity 10 hours per week in addition to the basic contract) Additional contract remunerating duties (without specifying the working time conditions) (e.g. the additional contract establishes that the person must carry out a specific task but the working time needed is not defined; e.g. the contract specifies that the work has to be carried out within the working time of the main contract) The contract is an employment contract, i.e.:  recognized as such by the national labour law AND  the hiring entity pays social security contributions for the hired person CASE E1: the additional contract is NOT triggered by the participation of the person in the H2020 action (e.g. the contract pre-dates and outlasts the grant agreement). The costs may be declared as ‘personnel costs – costs of employees (or equivalent)’ (Article 6.2.A.1). They must be calculated as described in Article 6.2.A. Calculation (point 1.1.4 above):  In this case a single hourly rate must be calculated taking the figures of the main and the additional contract/s together (i.e. total basic remuneration and total annual productive hours). CASE E2: the additional contract is triggered by the participation of the person in the H2020 action. The costs may be declared as ‘personnel costs – costs of employees (or equivalent)’ (Article 6.2.A.1). They must be calculated as described in Article 6.2.A. Calculation (point 1.1.4 above):  However, the hourly rate must be calculated only on the additional contract (remuneration and productive CASE F The costs may be declared as ‘personnel costs – costs of employees (or equivalent)’ (Article 6.2.A.1). They must be calculated for the additional contract as described in CASE B above:  However, if the hourly rate of the additional contract is higher than the hourly rate of the main contract, the difference must be treated as additional remuneration (see Article 6.2.A.1). Therefore: CASE F1 (the hiring entity is a non-profit legal entity): the costs of the additional contract may be eligible up to the following ceiling: {Hours worked for the action (as recorded in the time records) multiplied by {Hourly rate of the main contract + EUR 4,65}} Note: EUR 4,65 is the result of dividing 8000 (annual ceiling for additional remuneration) by 1720 (option 1 annual productive hours); thus, 4,65 is the hourly pro- rata of the annual ceiling H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 68 hours of the additional contract). If the hourly rate of the additional contract is higher than the hourly rate of the main contract, the difference must be treated as additional remuneration (see Article 6.2.A.1). CASE F2 (the hiring entity is NOT a non-profit legal entity, i.e. for profit entity): the costs of the additional contract may be eligible up to the following ceiling: {Hours worked for the action (as recorded in the time records) multiplied by Hourly rate of the main contract} Other contract (i.e. not covered above) CASE G1: the costs fulfil the conditions of Article 6.2.A.2. Depending on the main contract, the costs may be declared either as:  ‘costs of employees (or equivalent)’ (Article 6.2.A.1) or as  ‘costs for natural persons working under a direct contract’ (Article 6.2.A.2). If the main contract is under CASE A, CASE B or CASE C1, the cost must be calculated as indicated above for CASE E1 or E2 (depending if the additional contract is or not triggered by the participation in the H2020 action). If the main contract is under CASE C2 or D, the costs must be calculated as described in point 1.2.4. CASE G2: the costs do NOT fulfil the conditions of Article 6.2.A.2. The costs can NOT be declared as ‘personnel costs’. However, they may be eligible under another budget category:  if the contract covers tasks described in Annex 1: as ‘direct costs of subcontracting’ (Articles 6.2.B and 13) or  as ‘costs of other goods and services’ (Articles 6.2.D.3 and 10). CASE H The costs can NOT be declared as ‘personnel costs’. However, they may be eligible under another budget category:  if the contract covers tasks described in Annex 1: as ‘direct costs of subcontracting’ (Articles 6.2.B and 13) or  as ‘costs of other goods and services’ (Articles 6.2.D.3 and 10). The beneficiary must award the contracts ensuring best value for money and avoiding any conflict of interests (see Articles 10 and 13). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 69 The beneficiary must award the contracts ensuring best value for money and avoiding any conflict of interests (see Articles 10 and 13). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 70 1.3 Direct personnel costs: Costs for persons seconded by a third party against payment 1.3.1 What? This budget category covers the costs of persons that worked on the action and that were seconded by a third party as an ‘in-kind contribution against payment’ (see Article 11). 1.3.2 Costs for persons seconded by a third party may only be declared as actual costs. 1.3.3 The costs must comply with the following conditions for eligibility:  fulfil the general conditions for costs to be eligible (i.e. incurred/used during the action duration, necessary, linked to the action, etc.; see Article 6.1(a) and (b))  the person must be seconded ‘Seconded’ means the temporary transfer of personnel from a third party to the beneficiary. The seconded person is still paid and employed by the third party, but works for the beneficiary. S/he is at the disposal of the beneficiary. Example: A researcher in a public research centre is seconded to work in a university that is a beneficiary in a GA. Best practice: Secondments should be formalized via a secondment agreement. The secondment agreement has to detail the conditions of secondment (tasks, payment (or not) from one entity to the other, duration of the secondment, location, etc.). A secondment normally requires the seconded person to work at the beneficiary’s premises, although in specific cases it may be agreed otherwise in the secondment agreement.  the beneficiary must reimburse the costs to the third party (i.e. not for free)  fulfil the additional cost eligibility conditions set out in Article 11.1. 1.3.4 There is no specific cost calculation method; the costs must correspond to the price paid by the beneficiary — up to the costs actually incurred by the third party (see Article 11.1). For the calculation of the upper limit (i.e. the third party’s actual costs), the same calculation rules apply as in point 1.1.4. Those rules imply, among others, that the beneficiary must keep reliable time records of the time worked by the seconded person for the action. 1.4 Direct personnel costs: Costs of beneficiaries that are SMEs for their owners not receiving a salary — Costs of beneficiaries that are natural persons not receiving a salary 1.4.1 What? These budget categories cover the costs of SME owners and beneficiaries that are natural persons not receiving a salary that worked on the action. This includes SME owners who are remunerated/compensated for their work for the SME by any other means than a salary (for example, dividends, service contracts between the company and the owner, etc.). What not? SME owners who receive a salary (registered as such in the accounts of the SME) cannot declare personnel costs under this budget category, unless s/he can show that this salary corresponds exclusively to the management of the SME (and is therefore not linked to the action). (In this case, the salary for the management of the SME cannot be declared.) For information on in-kind contributions provided by third parties free of charge, see Articles 6.4 and 12. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 71 If the remuneration status of the SME owner changes during the course of the action, the beneficiary has to request an amendment (see Article 55), in order to change the form of costs used (e.g. from unit cost to actual costs). Example: A GA was signed in 2014 with an SME whose owner does not receive a salary. The action’s personnel costs are calculated based on the unit cost set out in Annex 2. In 2016, the SME starts paying the owner a salary for his/her work. From that moment on, any costs charged to the H2020 action require an amendment to the GA to remove the unit cost and to allow the SME owner to charge personnel costs based on his/her salary. The SME may no longer use unit costs to declare the costs of its owner. 1.4.2 These costs must be declared on the basis of the unit cost (hourly rate) fixed by Commission Decision C(2013) 819720 and set out in Annex 2 and 2a of the GA. The precise unit cost is not pre-fixed by the Decision; the ‘amount per unit’ (hourly rate) must be calculated for each individual — before signature of the GA — according to the following formula: Amount per unit = {{EUR 4,650/143 hours} multiplied by {country-specific correction coefficient of the country where the beneficiary is established}} The country-specific correction coefficient is the one set out in the Main Work Programme — MSCA21 in force at the time of the call. Example: A German SME owner not receiving a salary will calculate the hourly rate as follows: EUR 4.650/143 * 98.8% = EUR 32,13/hour In practice, the declaration of costs for SME owners and beneficiaries that are natural persons is very simple and almost completely automatized: The beneficiaries must only indicate the number of hours worked on the action and the costs are then automatically calculated by the IT system. 1.4.3 The costs must comply with the following conditions for eligibility:  fulfil the general conditions for unit costs to be eligible (i.e. units used during the action duration, necessary, linked to the action, correct calculation etc.; see Article 6.1(b))  be declared for an owner of an SME/beneficiary that is natural person, who works on the action but does not receive a salary. The owner may be compensated by means such as dividends, service contracts between the company and the owner, etc. The Commission/Agency may verify that the beneficiary fulfils the conditions for using this unit cost. 1.4.4 The cost are calculated (automatically by the IT system) as follows: amount per unit (hourly rate; see Annex 2a GA) x number of actual hours worked on the action 1.5 Direct personnel costs: Personnel costs for providing trans-national or virtual access to research infrastructure 1.5.1 What? This budget category covers the personnel costs for access to infrastructure activities, i.e.: 20 Available at http://ec.europa.eu/research/participants/data/ref/h2020/other/legal/unit_costs/unit-costs_sme- owners_natural-persons-no-salary_en.pdf 21 Available at http://ec.europa.eu/research/participants/portal/desktop/en/funding/reference_docs.html#h2020- work-programmes . The total number of hours declared in EU and Euratom grants for an SME owner for a year (i.e. a financial year) can NOT be higher than the standard number of annual productive hours used for the calculation of the hourly rate (i.e. 1 720 hours). . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 72  costs for employees (or equivalent)  basic remuneration and  for non-profit legal entities: additional remuneration  costs for natural persons working under a direct contract and  costs of personnel seconded by a third party against payment. 1.5.2 Personnel costs for providing trans-national or virtual access to research infrastructure may be declared as actual costs or on the basis of unit costs in accordance with the usual cost accounting practices (i.e. ‘average personnel costs’) (see Article 5.2(a)). 1.5.3 The costs must comply with the following conditions for eligibility:  fulfil the general conditions for costs to be eligible (i.e. incurred/used during the action duration, necessary, linked to the action, etc.; see Article 6.1(a) and (b))  fulfil the specific conditions for costs for employees (or equivalent), costs for natural persons working under a direct contract or costs of personnel seconded by a third party against payment  be incurred for providing trans-national or virtual access to research infrastructure  fulfil the additional cost eligibility conditions set out in Article 16.1 or 16.2. 1.5.4 The same rules for cost calculation apply as in points 1.1.4, 1.2.4 and 1.3.4. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 73 1. Direct costs of subcontracting: Types of costs — Cost form — Conditions for eligibility — Cost calculation This budget category applies to all RIA, IA and CSA grants under the General MGA. The additional options for access to research infrastructure (together with the corresponding Article 16 and other provisions) will be inserted into the GA if the action also involves access to research infrastructure. 1.1 What? This budget category covers (and is limited to) the price paid for subcontracts and related taxes (for VAT, see Article 6.5). 1.2 Direct costs of subcontracting must be declared as actual costs (i.e. on the basis of the prices actually paid) (see Article 5.2(b)). 1.3 The costs must comply with the following conditions for eligibility:  fulfil the general conditions for actual costs to be eligible (i.e. incurred during the action duration, necessary, linked to the action, etc.; see Article 6.1(a))  be incurred for the subcontracting of action tasks described in Annex 1 (see Article 13)  fulfil the additional cost eligibility conditions set out in Article 13.1.1  for subcontracting costs incurred for providing trans-national or virtual access to research infrastructure: fulfil the additional eligibility conditions set out in Article 16.1 or 16.2. 1.4 There is no specific cost calculation method; the costs must correspond to the eligible costs actually incurred. B. Direct costs of subcontracting [(not covered by Point F)] (including related duties, taxes and charges such as non-deductible value added tax (VAT) paid by the beneficiary) are eligible if the conditions in Article 13.1.1 are met. [OPTION to be used for trans-national access to research infrastructure: Subcontracting costs for providing trans-national access to research infrastructure are eligible only if also the conditions set out in Article 16.1.1 are met.] [OPTION to be used for virtual access to research infrastructure: Subcontracting costs for providing virtual access to research infrastructure are eligible only if also the conditions set out in Article 16.2 are met.] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 74 1. Direct costs of providing financial support to third parties: Types of costs — Cost form — Conditions for eligibility — Cost calculation This optional budget category (together with the corresponding Article 15 and other provisions) will be inserted into the GA if the action also involves financial support to third parties. 1.1 What? This budget category covers the costs for the financial support given to third parties. 1.2 Direct costs of providing financial support to third parties must be declared as actual costs (i.e. on the basis of the financial support actually paid) (see Article 5.2(c)). 1.3 The costs must comply with the following conditions for eligibility:  fulfil the general conditions for actual costs to be eligible (i.e. incurred during the action duration, necessary, linked to the action, etc.; see Article 6.1(a))  fulfil the additional cost eligibility conditions set out in Article 15.1.1. 1.4 There is no specific cost calculation method; the costs must correspond to the eligible costs actually incurred. C. Direct costs of providing financial support to third parties [(not covered by Point F)] [OPTION to be used if Article 15 applies: are eligible if the conditions set out in Article 15.1.1 or 15.2.1 are met.] [OPTION: Not applicable] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 75 1. Travel costs and related subsistence allowances: Types of costs — Cost form — Conditions for eligibility — Cost calculation This budget category applies to all RIA, IA and CSA grants under the General MGA. The additional option for access to trans-national research infrastructure (together with the corresponding Article 16 and other provisions) will be inserted into the GA if the action also involves access to research infrastructure. 1.1 What? This budget category covers the travel costs and related subsistence allowances (including all related duties, taxes and charges that the beneficiary has paid, if including them is part of the usual practices for travel, e.g. non-deductible VAT; see Article 6.5) spent for the action. Best practice: Beneficiaries may contact the Commission/Agency to ask whether a particularly expensive travel plan would be accepted or not. Travel and subsistence costs may relate to the personnel of the beneficiaries as well as to external experts that participate in the action on an ad hoc basis (e.g. attending specific meetings), if the experts’ participation is envisaged in Annex 1. In this case, the beneficiary may reimburse the experts or handle the travel arrangements itself (and be invoiced directly). There is no distinction between travelling in or outside of Europe. 1.2 Travel and subsistence costs must be declared as actual costs (see Article 5.2(d)). 1.3 The costs must comply with the following conditions for eligibility:  fulfil the general conditions for actual costs to be eligible (i.e. incurred during the action duration, necessary, linked to the action, etc.; see Article 6.1(a)) The travel for which costs are claimed must be necessary for the action (e.g. to present a paper explaining the results of a conference). Travel costs related to an event at which the beneficiary carried out work that was not specifically related to the action are NOT eligible. All travel costs must be limited to the needs of the action; costs related to extensions (for other professional or private reasons) are NOT eligible. Moreover, they must be adequately recorded.  be in line with the beneficiary’s usual practices on travel Example: Beneficiary A declares the cost of a business class airplane ticket for one of its employees. If the beneficiary usually pays for staff in this category to travel in business class, then the cost of the business class ticket is eligible. If the beneficiary’s usual practice is to only pay for economy class tickets for staff in this category, then the cost of the business class ticket is not eligible. D. Other direct costs [(not covered by Point F)] D.1 Travel costs and related subsistence allowances (including related duties, taxes and charges such as non-deductible value added tax (VAT) paid by the beneficiary) are eligible if they are in line with the beneficiary’s usual practices on travel. [OPTION to be used for trans-national access to research infrastructure: Travel costs for providing trans- national access to research infrastructure are eligible only if also the conditions set out in Article 16.1.1 are met.] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 76 If the beneficiary reimburses travel and/or related subsistence allowances as a lump sum and/or per diem payment, it is the lump sum or per diem amount that is considered an eligible cost, not the actual prices paid by the person receiving the lump sum or per diem. (For the purposes of the grant, these costs remain actual costs, NOT unit or lump sum costs under Article 5.2. They must be recorded in the beneficiary’s accounts and will be checked if there is an audit.)  for travel and subsistence costs incurred for providing trans-national access to research infrastructure: fulfil the additional cost eligibility conditions set out in Article 16.1. 1.4 There is no specific cost calculation method; the costs must correspond to the eligible costs actually incurred. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 77 1. Equipment costs: Types of costs — Cost form — Conditions for eligibility — Cost calculation This budget category applies to all to all RIA, IA and CSA grants under the General MGA. An option for full purchase costs will be inserted into the GA, if explicitly provided in the work programme/call. The beneficiaries may declare the following types of equipment costs as ‘other direct costs – equipment costs’: one of the following:  either depreciation costs of equipment, infrastructure or other assets  or full purchase costs of equipment, infrastructure or other assets (if option applies) D.2 [OPTION by default: The depreciation costs of equipment, infrastructure or other assets (new or second-hand) as recorded in the beneficiary’s accounts are eligible, if they were purchased in accordance with Article 10.1.1 and written off in accordance with international accounting standards and the beneficiary’s usual accounting practices. The costs of renting or leasing equipment, infrastructure or other assets (including related duties, taxes and charges such as non-deductible value added tax (VAT) paid by the beneficiary) are also eligible, if they do not exceed the depreciation costs of similar equipment, infrastructure or assets and do not include any financing fees. The costs of equipment, infrastructure or other assets contributed in-kind against payment are eligible, if they do not exceed the depreciation costs of similar equipment, infrastructure or assets, do not include any financing fees and if the conditions in Article 11.1 are met. The only portion of the costs that will be taken into account is that which corresponds to the duration of the action and rate of actual use for the purposes of the action.] [OPTION (alternative to option above) to be used if foreseen in the work programme 18 : The cost of purchasing equipment, infrastructure or other assets (new or second-hand) (as recorded in the beneficiary’s accounts) are eligible if the equipment, infrastructure or other assets was purchased in accordance with Article 10.1.1. The costs of renting or leasing equipment, infrastructure or other assets (including related duties, taxes and charges such as non-deductible value added tax (VAT) paid by the beneficiary) are also eligible, if they do not exceed the depreciation costs of similar equipment, infrastructure or assets and do not include any financing fees. The costs of equipment, infrastructure or other assets contributed in-kind against payment are eligible, if they do not exceed the depreciation costs of similar equipment, infrastructure or assets, do not include any financing fees and if the conditions in Article 11.1 are met.] [OPTION (in addition to one of the two options above) for trans-national and virtual access to research infrastructure: As an exception, the beneficiaries must not declare such costs (i.e. costs of renting, leasing, purchasing depreciable equipment, infrastructure and other assets) for providing trans-national or virtual access to research infrastructure (see Article 16).] 18 To be used as an exception, only if justified by the nature of the action and the context of the use of the equipment or assets, if provided for in the work programme. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 78 AND:  costs of renting or leasing of equipment, infrastructure or other assets  costs of equipment, infrastructure or other assets contributed in-kind against payment. 1.1 Equipment costs: Depreciation costs of equipment, infrastructure or other assets 1.1.1 What? This budget category covers the depreciation costs of equipment, infrastructure or other assets used for the action. In some cases (e.g. infrastructure), equipment costs may also include the costs necessary to ensure that the asset is in good condition for its intended use (e.g. site preparation, delivery and handling, installation, etc.). What not? If the beneficiary’s usual practice is to consider durable equipment costs (or some of them) as indirect costs, these can NOT be declared as direct costs, but are covered by the 25 % flat rate for indirect costs (see Article 6.2.E). Any depreciation declared as a direct cost under a H2020 action must be a direct cost under the beneficiary’s cost accounting practices (see Article 6.2.) 1.1.2 Equipment costs must be declared as actual costs (see Article 5.2(d)). 1.1.3 The costs must comply with the following conditions for eligibility:  fulfil the general conditions for actual costs to be eligible (i.e. incurred during the action duration, necessary, linked to the action, recorded in the beneficiary’s accounts, etc.; see Article 6.1(a))  have been purchased in accordance with Article 10.1.1  be written off in accordance with the beneficiary’s usual accounting practices and with international accounting standards. ‘International accounting standards’ are an internationally recognised set of rules for maintaining books and reporting company accounts, designed to be compared and understood across countries. Example: The IAS 16 (International Accounting Standards) or the International Financial Reporting Standards (IFRS), originally created by the EU and now in common international use. 1.1.4 They must be calculated according to the following principles:  the depreciable amount (purchase price) of the equipment must be allocated on a systematic basis over its useful life (i.e. the period during which the equipment is expected to be usable). If the equipment’s useful life is more than a year, the beneficiary can NOT charge the total cost of the item in a single year (see also ‘cash- based accounting’ below)  depreciated equipment costs can NOT exceed the equipment’s purchase price  depreciation can NOT be spread over a period longer than the equipment’s useful life  only the part of the equipment’s ‘full capacity’22 actually used for the action may be declared (i.e. time used for the action and, in case of shared use, the percentage of actual use for the action). If the beneficiary does not use the equipment exclusively for the action (or if it does not use it for its full capacity), the time that the equipment has been used for the project must be recorded 22 Full capacity means the number of productive hours/days/months corresponding to the full potential use of the equipment by the beneficiary. This includes any time during which the equipment is usable but not used, but take due account of real constraints such as the opening hours of the entity, repair and maintenance time, etc. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 79 Example: A microscope was bought before the action started and was not fully depreciated. For 6 months in reporting period 1 it was used for the action for 50 % of the time and for other activities for the other 50 % of the time. Linear depreciation is applied according to the beneficiary’s usual practices (depreciation over the expected period of use of the microscope): EUR 100 000 per year (EUR 50 000 for 6 months). Costs declared for the project: EUR 50 000 (6 months of use) multiplied by 50 % of use for the action during those 6 months = EUR 25 000.  the beneficiary can NOT charge depreciation for periods before the purchase of the equipment Example: A microscope was bought in 1 December. The reporting period ends on 31 December and the financial year also ends on 31 December. The maximum depreciation that the beneficiary may charge is 1 month (from 1 to 31 December); i.e. 1/12 of the annual depreciation. This applies even if the beneficiary recorded in its accounts at 31 December a full year of depreciation for the item. The depreciation costs must be calculated for each reporting period. Specific cases (equipment costs): Full price of an asset in one single year — As a general rule, beneficiaries cannot charge the total purchase price of equipment to the action, unless the GA explicitly foresees that option. If the equipment is expected to be used over more than one year, declaring its full price in one single year may be considered either as not compliant with the international accounting standards or as an ‘excessive’ cost — and therefore in both cases ineligible; see ‘cash-based accounting’ below). Equipment bought before the action start — Depreciation costs for equipment used for the action, but bought before the action start are eligible if they fulfil the general eligibility conditions of Article 6.1(a). These remaining depreciation costs (the equipment has not been fully depreciated before the action’s start) may be eligible only for the portion corresponding to the action duration and to the rate of actual use for the purposes of the action. Example: According to the beneficiary’s accounting practices, an equipment bought in January 2013 has a depreciation period of 48 months. If the GA is signed in January 2015 (when 24 months of depreciation have already passed) and the equipment is used for this action, the beneficiary can declare the depreciation costs incurred for the remaining 24 months, in proportion to the equipment’s use for the action. Cash-based accounting — As a general rule, beneficiaries cannot charge the total purchase price of equipment to the action, unless the GA explicitly foresees that option. In the general case beneficiaries may therefore only charge the annual depreciation costs that correspond to the part of the equipment’s ‘full capacity’ that was used for the action. This depreciation must be calculated in accordance with international accounting standards (i.e. notably spread over the equipment’s useful life). ‘Useful life’ means the time during which the equipment is useful for the beneficiary. If the beneficiary does not normally calculate depreciation it may refer to its national tax regulations to define the useful life of the equipment. Therefore, if the equipment’s useful life is more than a year the beneficiary can NOT charge the total costs of the item in a single year. This applies even if the beneficiary’s usual accounting practice is to record the equipment’s total purchase cost as an expense in one year. Example: A beneficiary that uses cash-based accounting buys a machine for EUR 100 000 in March 2015. According to the logbook of the machine, it is used for the action 50 % of the time from 1 July 2015 until the end of the action. The action started in January 2015 and runs for three years with two reporting periods. The machine’s useful life is six years. In the reporting period ending in June 2016, the beneficiary must declare depreciation costs taking into account the percentage of use, the time used for the action and the machine’s useful life: EUR 100 000 x (12/72 months) x 50 % (used for the action) = amount declared for the machine in the first reporting period In the reporting period ending in December 2017, the beneficiary must declare: EUR 100 000 x (18/72 months) x 50 % (used for the action) = amount declared for the machine in the second reporting period H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 80 Prototype or pilot plant (constructed as part of the action tasks) — Normally beneficiaries may only declare the depreciation costs for equipment, infrastructure or other assets that are used for the project. (Full) Construction costs (of a prototype or pilot plant) may however exceptionally be eligible as ‘equipment costs’, if all of the following apply:  building the prototype or pilot plant is part of the action tasks (i.e. described in Annex 1 of the GA)  the costs are foreseen in the estimated budget (Annex 2 of the GA)  the cost eligibility conditions of Articles 6.1 and 6.2 are met (in particular, recorded in the beneficiary’s accounts in accordance with the national accounting standards and with the beneficiary’s usual cost accounting practices; see Article 6.1(a)(v)). Example: If according to national accounting standards the prototype must be depreciated, the beneficiary may only declare the depreciation costs (as recorded in its accounts), not the full construction cost. If the full construction cost of the construction are eligible, but the construction was externalized to a third party (other than a linked third party), the costs can NOT be declared as ‘equipment costs’, but may be eligible as ‘direct costs of subcontracting’ (see Articles 6.2.B and 13). 1.2 Equipment costs: Full cost of purchasing equipment, infrastructure or other assets This budget category covers the full purchase costs of capitalised equipment, infrastructure or other assets used for the action (not only the depreciation costs for the relevant periodic report). ‘Capitalised’ means recorded as assets in the beneficiary’s balance sheet. 1.3 Equipment costs: Costs of renting or leasing equipment 1.3.1 What? This budget category covers the costs of renting or leasing equipment used for the action (i.e. finance leasing, renting and operational leasing). 1.3.2 Equipment costs must be declared as actual costs (see Article 5.2(d)). 1.3.3 The costs must comply with the following conditions for eligibility:  fulfil the general conditions for actual costs to be eligible (i.e. incurred during the action duration, necessary, linked to the action, etc.; see Article 6.1(a))  not exceed the depreciation costs of similar equipment, infrastructure or assets  not include any financing fees. 1.3.4 They must be calculated according to the following principles:  for leasing (finance leasing) with the option to buy the durable equipment:  the equipment leased by the beneficiary must be recorded as an asset of the beneficiary and the depreciation costs may be declared in accordance with the beneficiary’s usual accounting practices  the costs declared can NOT exceed the costs that would have been incurred if the equipment had been purchased and depreciated under normal accounting practices The finance charges included in the finance lease payments are therefore NOT eligible.  the costs declared can NOT include any interest on loans taken to finance the purchase, or any other type of financing fee H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 81  for renting and operational leasing: the equipment rented or leased by the beneficiary is not recorded as an asset of the beneficiary: There is no depreciation involved (since the item is still the property of the renting or leasing firm), but the rental or lease costs of the beneficiary (i.e. its periodic payments to the renting or leasing firm) are eligible, if they follow the beneficiary’s usual practices and do not exceed the costs of purchasing the equipment (i.e. are comparable to the depreciation costs of similar equipment). 1.4 Equipment costs: Costs of equipment, infrastructure or other assets contributed in- kind against payment 1.4.1 What? This budget category covers the costs of equipment, infrastructure or other assets that were used for the action and ‘contributed in-kind against payment’. 1.4.2 Equipment costs must be declared as actual costs (see Article 5.2(d)). 1.4.3 The costs must comply with the following conditions for eligibility:  fulfil the general conditions for actual costs to be eligible (i.e. incurred during the action duration, necessary, linked to the action, etc.; see Article 6.1(a))  not exceed the depreciation costs of similar equipment, infrastructure or assets  not include any financing fees  fulfil the additional cost eligibility conditions set out in Article 11.1. 1.4.4 The costs must correspond to the amount paid by the beneficiary and must not exceed the depreciation cost of the third party. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 82 1. Costs of other goods and services: Types of costs — Cost forms — Conditions for eligibility — Cost calculation The budget category applies to all RIA, IA and CSA grants under the General MGA. The additional options for access to research infrastructure (together with the corresponding Article 16 and other provisions) will be inserted into the GA if the action also involves access to research infrastructure. 1.1 What? This budget category covers the costs for goods and services that were purchased for the action (or contributed in-kind against payment), including:  costs for consumables and supplies (e.g. raw materials etc.)  dissemination costs (including regarding open access during the action, e.g. article processing or equivalent charges), costs related to data maintenance or storage and conference fees for presenting project-related research  costs related to intellectual property rights (IPR) (including costs to protect the results or royalties paid for access rights needed to implement the action)  costs for certificates on financial statements (CFS) and certificates on methodology (unless unnecessary, for instance because the EU or Euratom contribution is below the threshold of Article 20.4) or the certificate was submitted not for the final report but before).  translation costs (if translation is necessary for the action’s implementation, is justified, etc.). Best practice: If there is any doubt about whether a cost is eligible, the beneficiaries should contact the Commission/Agency. What not? If it is the beneficiary’s usual accounting practice to consider some of these costs (or all of them) as indirect costs, they cannot be declared as direct costs (since they will already be covered by the 25 % flat rate). 1.2 Costs of other goods and services must be declared as actual costs (see Article 5.2(d)). D.3 Costs of other goods and services (including related duties, taxes and charges such as non-deductible value added tax (VAT) paid by the beneficiary) are eligible, if they are: (a) purchased specifically for the action and in accordance with Article 10.1.1 or (b) contributed in kind against payment and in accordance with Article 11.1. Such goods and services include, for instance, consumables and supplies, dissemination (including open access), protection of results, certificates on the financial statements (if they are required by the Agreement), certificates on the methodology, translations and publications. [OPTION to be used for trans-national access to research infrastructure: Costs of other goods and services for providing trans-national access to research infrastructure are eligible only if also the conditions set out in Article 16.1.1 are met.] [OPTION to be used for virtual access to research infrastructure: Costs of other goods and services for providing virtual access to research infrastructure are eligible only if also the conditions set out in Article 16.2 are met.] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 83 1.3 The costs must comply with the following conditions for eligibility:  fulfil the general conditions for actual costs to be eligible (i.e. incurred during the action duration, necessary, linked to the action, etc.; see Article 6.1(a)) AND  be either purchased specifically for the action and in accordance with Article 10.1.1 OR  contributed in kind against payment and in accordance with Article 11.1  for costs of other goods and services incurred for providing trans-national or virtual access to research infrastructure: fulfil the additional cost eligibility conditions set out in Article 16.1 or 16.2. 1.4. There is no specific cost calculation method. The costs must correspond to the eligible costs actually incurred (i.e. the amount paid by the beneficiary for the supply of the goods or services). Specific cases (costs for other goods and services): IPR access rights — Royalties paid for IPR access rights (and by extension any lump sum payments) are normally eligible, if all the eligibility conditions are met (e.g. necessary for the implementation of the action, incurred during the action, reasonable, etc.). The following are however NOT eligible (or eligible only within certain limits):  royalties for an exclusive licence: are eligible only if it can be shown that the exclusivity (and thus the higher royalties) is absolutely necessary for the implementation of the action  royalties for licensing agreements which were already in force before the start of the action: only the part of the licence fee that can be linked to the action is eligible (since the licence presumably goes beyond the action implementation)  royalties for access rights to background granted by other beneficiaries under Article 25.2: Since the default rule is that access rights are granted on a royalty-free basis and beneficiaries may deviate only if agreed before GA signature, royalties are eligible only if explicitly agreed by all beneficiaries before GA signature and all the other eligibility conditions are met (e.g. necessary for the implementation of the action, reasonable, etc.) Best practice: If beneficiaries intend to deviate from the default rule, it is recommended that this is explained in detail in their proposal.  royalties for access rights to background granted by other beneficiaries under Article 25.3 (and by extension royalties paid to third parties for exploitation of the results): are NOT eligible. Protection of results — Costs related to the protection of the actions results (e.g. consulting fees, fees paid to the patent office for patent registration; see Article 27) are eligible if the eligibility conditions are fulfilled. Costs related to protection of other intellectual property (e.g. background patents) are NOT eligible. Plan for the exploitation and dissemination of results — Costs for drawing up the ‘plan for the exploitation and dissemination of the results’ are normally NOT eligible since they will have been incurred before the start of the action, to prepare the proposal. Costs that occur when revising or implementing this plan may be eligible. Open access — Costs related to open access are eligible, if the eligibility conditions are fulfilled. With explicit agreement by the Commission/Agency, it can also include fees levied for a membership scheme (if this is a requirement for publishing in open access or if membership is a pre-condition for significantly lower article processing charges). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 84 Supplies in stock — Supplies and consumables which were already in the stock of the beneficiary may be eligible as a direct cost, if they are used for the action and fit the definition of direct costs under Article 6.2. Internally invoiced costs — Internally invoiced costs (i.e. where the use of certain resources is shared between different units of the same organisation and the costs of their use are declared through internal invoices) may be eligible if their use and the usage (number of hours) for the action is specifically recorded and it is mentioned in the invoice. The internal invoice must refer to the use/dedication for the action of specific resources (e.g. per researcher, piece of equipment, etc.). Example (acceptable internal invoice): Internal invoice with 16 hours of the technician doing the analysis and 10 hours depreciation of the testing equipment used. Example (not acceptable internal invoice): Internal invoice with a global price for the use of a research infrastructure (e.g. laboratory) or for a service (e.g. an analysis). The costs must be declared under the budget category that corresponds to the invoiced resource (e.g. personnel, equipment, other direct costs, etc.) and must fulfil the eligibility conditions set out in Article 6.1 and 6.2. Internal invoices may NOT include indirect costs elements or profit margin or mark-up. Internal invoices for the work of personnel must be supported by time records (see Article 18.1). The hourly rate must be calculated as described in Article 6.2.A. Internal invoices for the use of equipment must be limited to the depreciation for the relevant reporting period (only the part of the depreciation cost corresponding to the time the equipment was used for the action during that reporting period can be declared.) The use of the equipment must be properly recorded in order to allow direct measurement of the use for the action and to ensure auditability (see Article 6.2.D.2). It is NOT possible to calculate an all-in average cost of internally invoiced equipment including, for instance, allocated indirect costs (e.g. maintenance). Self-produced consumables — the eligible cost of a consumable is generally determined by its purchase price. The purchase price is the actual direct cost of the consumable for the beneficiary. However, consumables that are manufactured (produced) by the beneficiary itself do not have a purchase price. The consumable is normally recorded in the accounts of the beneficiary (as part of the inventory) for its cost of production. In consequence, the eligible costs of self-produced consumables must be determined on the basis of its accounting value under the following conditions:  only the direct costs within the accounting value of the consumable (cost of production) may be charged. If it is not possible to accurately determine the part of the accounting value corresponding to the direct costs then the beneficiary may charge the accounting value divided by 1,25 (in order to remove the H2020 flat-rate for indirect costs) AND  the amount resulting from the indent above may not be significantly higher than the market price of the consumable. Example: In an action in the field of agro-forestry research the beneficiary needs 100 plants to carry out tests. The beneficiary has a greenhouse where it keeps a stock of those plants. The market price of those plants (e.g. checked with offers or prices published in internet) is around EUR 10 per plant. The beneficiary has 150 plants in stock with a global accounting value of EUR 1 200 (= EUR 8 per plant). It is not possible to identify what part of that accounting value corresponds to direct costs of production of those plants. The beneficiary may use the self-produced plants for the action and charge EUR 6,4 per plant (8/1,25). Beneficiaries can NOT charge the commercial price for self-produced consumables. . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 85 1. Capitalised and operating costs of large research infrastructure: Types of costs — Cost forms — Conditions for eligibility — Cost calculation This optional budget category will be inserted into RIA, IA and CSA GAs, unless: – it is excluded by the work programme or – for calls under Part I of the Horizon 2020 Framework Programme ‘Research Infrastructures’ (except for e-Infrastructure topics). 1.1. What? It covers capitalised costs and operating costs of research infrastructure used for the action. ‘Capitalised costs’ are:  all costs incurred in setting up and/or renewing the research infrastructure and  some costs of specific repair and maintenance of the research infrastructure and parts or essential integral components.23 These costs are recorded as an asset in the balance sheet and expensed over the years. They can be claimed as direct costs through depreciation costs. The capitalised costs of the research infrastructure must be depreciated in line with international accounting standards (in particular, based on the useful economic life of the infrastructure) and with the beneficiary’s 23 See also International Financial Reporting Standard No 16. D.4 Capitalised and operating costs of ‘large research infrastructure’ 19 [OPTION by default: directly used for the action are eligible, if: (a) the value of the large research infrastructure represents at least 75% of the total fixed assets (at historical value in its last closed balance sheet before the date of the signature of the Agreement or as determined on the basis of the rental and leasing costs of the research infrastructure 20 ); (b) the beneficiary’s methodology for declaring the costs for large research infrastructure has been positively assessed by the Commission (‘ex-ante assessment’); (c) the beneficiary declares as direct eligible costs only the portion which corresponds to the duration of the action and the rate of actual use for the purposes of the action, and (d) they comply with the conditions as further detailed in the annotations to the H2020 grant agreements.] OPTION for all topics within calls under Part ‘Research Infrastructure’ (except for e-Infrastructure topics): Not applicable.] [OPTION to be used if foreseen in the work programme: Not applicable.] 19 ‘Large research infrastructure’ means research infrastructure of a total value of at least EUR 20 million, for a beneficiary, calculated as the sum of historical asset values of each individual research infrastructure of that beneficiary, as they appear in its last closed balance sheet before the date of the signature of the Agreement or as determined on the basis of the rental and leasing costs of the research infrastructure. 20 For the definition see Article 2(6) of the ‘H2020 Framework Programme Regulation No 1291/2013’: ‘Research infrastructure’ are facilities, resources and services that are used by the research communities to conduct research and foster innovation in their fields. Where relevant, they may be used beyond research, e.g. for education or public services. They include: major scientific equipment (or sets of instruments); knowledge-based resources such as collections, archives or scientific data; e-infrastructures such as data and computing systems and communication networks; and any other infrastructure of a unique nature essential to achieve excellence in research and innovation. Such infrastructures may be ‘single-sited’, ‘virtual’ or ‘distributed’. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 86 usual accounting practices.24 Only the depreciation costs of the research infrastructure corresponding to actual use may be declared as eligible direct costs. Methods and national reporting practices may differ, but, for the declaration of costs under H2020 grants, it is these guidelines that must be followed for the financial reporting. Beneficiaries must use their ‘usual accounting principles’, i.e. the general and cost accounting principles, standards and procedures that they use to compile their legal/statutory financial accounts (i.e. balance sheet, profit and loss accounts, etc.) together with their analytical management information. These standards and principles must not be set up specifically for declaring costs under EU-funded actions. They should be changed/adapted only where strictly necessary to comply with the EU cost eligibility conditions. Ad hoc accounting and/or management schemes will not be accepted. The costs of renting and/or leasing (excluding any finance fee/interest) of a research infrastructure may also be declared as eligible direct costs. As regards depreciation, only leasing costs of the research infrastructure corresponding to actual use may be declared as eligible direct costs. ‘Operating costs’ are costs:  which the beneficiary incurs specifically (i.e. directly for the research infrastructure that is used for the action) for running the research infrastructure (including scientific, technical and administrative personnel) and  are directly linked to the research infrastructure. In the statutory accounting, these are recorded in the beneficiary’s statement of comprehensive income (profit and loss account). Only the following operating costs can be claimed as direct costs:  personnel cost of administrative and support staff directly assigned to the functioning of the research infrastructure;  rental/lease of the research infrastructure (for the period of its actual use for the action);  maintenance and repair contracts (including calibrating and testing) specifically awarded for the functioning of the research infrastructure;  consumables, materials and spare parts specifically used for the research infrastructure;  facility management contracts including security fees, insurance costs, quality control and certification, upgrading to national and/or EU quality, safety or security standards (if not capitalised), specifically awarded for the functioning of the research infrastructure;  energy and water specifically supplied for the research infrastructure. What not? The following costs can NOT be declared as direct costs (non-exhaustive list): 24 See Article 126 of the Financial Regulation. If a (tenant) beneficiary uses the values of contracts of renting or leasing of a research infrastructure for the calculation of the EUR 20 million threshold (see below) and consequently declares costs for this infrastructure, these costs cannot be considered nor declared by any other beneficiary under any other H2020 grant (in particular not by the owner of the research infrastructure). . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 87  rental, lease or depreciation of buildings or plants not directly used for the action (e.g. administrative buildings, headquarters)  statutory audit and legal fees (not including costs of certificates required under the GA)  office supplies and petty office equipment (purchased in bulk)  other general services (cleaning, medical, library, services for publication, communication and connection, postage, dues and subscriptions, clothing, literature, transport, catering and similar items (i.e. items recorded by the beneficiary under the same account in the general ledger)  management tasks and horizontal services (accounting and controlling, head office, corporate communications, HR and training, internal audit, management, quality management, strategic development, etc.)  non-specific, non-activity-related or non-project-related costs (general): consumables, maintenance, general facilities management, conferences, hosted activities, security fees, insurance costs, general utilities, energy and water, and similar (i.e. items recorded by the beneficiary under the same account in the general ledger). These costs are reimbursed through the flat-rate for indirect costs (see Article 6.2.E). 1.2 Costs of capitalised and operating costs of large research infrastructure must be declared as actual costs (see Article 5.2(d)). 1.3 The costs must comply with the following conditions for eligibility:  they fulfil the general conditions for actual costs to be eligible (i.e. incurred during the action duration, necessary, linked to the action, etc.; see Article 6.1(a))  the sum of historical asset values of each individual research infrastructure of the beneficiary, as they appear in its last closed balance sheet before the date of the signature of the GA or as determined on the basis of the rental and leasing costs of the research infrastructure, represents a total value of at least EUR 20 million for that beneficiary  the value of large research infrastructures of the beneficiary represents at least 75% of the total fixed assets (at historical value in its last closed balance sheet before the date of the signature of the GA or as determined on the basis of the rental and leasing costs of the research infrastructure)  the beneficiary’s methodology for declaring the costs for large research infrastructure has been positively assessed by the Commission (‘ex-ante assessment’);  the beneficiary declares as direct eligible costs only the portion which corresponds to the action duration and to the rate of actual use for the purposes of the action, and  they comply with the conditions set out below. 1.4 The cost calculation is explained in point 4.4. The beneficiary must operate research infrastructure that falls under the definition of large research infrastructure (i.e. a total value of at least EUR 20 million and representing at least 75% of the total fixed assets). If this is the case, the value of the specific research infrastructure used for the action (and for which costs are declared) is irrelevant (i.e. it can be lower or higher than EUR 20 million) (see also below point 2). . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 88 2. Large research infrastructure Beneficiaries can declare capitalised and operating costs for ‘large research infrastructure’, if they comply with the definition and conditions listed in Article 6.2.D.4 (in particular if the large research infrastructure has a total value of at least EUR 20 million25 and if the value of the large research infrastructure represents at least 75% of the beneficiary’s total fixed assets, at historical value). The values of contracts of renting or leasing of research infrastructure may be taken into account for the calculation of the EUR 20 million threshold of the (tenant) beneficiary (see above). The infrastructure used for the action must be a ‘research infrastructure’ in technical terms, i.e. a facility, resource or service that is used by the research communities to conduct research and foster innovation in their fields; it may be used beyond research, e.g. for education or public services26. This covers for instance:  major scientific equipment (or sets of instruments);  knowledge-based resources such as collections, archives or scientific data;  e-infrastructures, such as data, and computing systems, and communication networks. The infrastructure may be ‘single-sited’, ‘virtual’ or ‘distributed’. Moreover, it must be a research infrastructure in accounting terms, i.e. recorded in the accounts of the beneficiary on the basis of a ‘grouping of costs’ (comprising a wide range of items: buildings, machinery, equipment, IT, staff, repair and maintenance, specific security fees, etc.), specifically dedicated to the research infrastructure and necessary for it/them to function, and excluding costs that are incidental to the research infrastructure or necessary for accessing it, such as a car parks, conference and teaching rooms. In analytical (cost) accounting, this grouping of costs can be recorded in many different ways. Best practice: Recording them with a specific code for the research infrastructure or under a cost centre. 3. Ex-ante assessment Only beneficiaries that have obtained a positive ex-ante assessment of their costing methodology may declare capitalised and operating costs for large research infrastructure under this budget category. 25 Calculated as the sum of the historical asset values of the individual research infrastructures as they appear in the beneficiary’s last closed balance sheet before the date on which the grant agreement is signed, or determined on the basis of the rental and leasing costs of the infrastructures. 26 See Article 2(6) of the Horizon 2020 Framework Programme. Costs can be declared under this budget category ONLY after having obtained the positive ex-ante assessment from the Commission. Once, a positive ex-ante assessment is obtained, the beneficiaries may, however, exceptionally adjust previous financial statements. Costs declared in accordance with a positive ex-ante assessment will not be challenged during audits, except in case of irregularity or fraud. The auditors will only:  ensure that the methodology used is the one that was submitted for ex-ante assessment and  verify that the calculations (applying the methodology) are correct. . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 89 When? Applications for ex-ante assessment can be submitted at any time during grant preparation for any grant agreement. How? The ex-ante assessment is composed of two steps: Status validation and methodology compliance. Procedure for ex-ante assessment: Step 1 — Status validation (i.e. if the beneficiary qualifies with definition and conditions for declaring costs under Article 6.2.D.4). The beneficiary must self-declare whether it complies with the conditions set out above (in particular the EUR 20 million and the 75% thresholds), by filling the appropriate field in the Beneficiary Register. The beneficiary must then provide the relevant supporting documents to the Commission within one month. The Commission will confirm or — after a contradictory procedure — refuse the status and inform the beneficiary accordingly. Step 2 — Methodology compliance (i.e. if the beneficiary’s methodology complies with the conditions set out below). Following an in-depth (in principle on-the-spot) assessment, the Commission will issue a draft report and submit it to a contradictory procedure with the beneficiary. During this phase the beneficiary has the possibility to amend its methodology by removing any non-compliant component of it. Thereafter, a final (negative or positive) ‘ex-ante assessment report’ will be issued. 4. Other conditions 4.1 Costs must be identifiable and verifiable All declared costs must be identifiable and verifiable, i.e. supported by persuasive evidence allowing for a sufficient audit trail. The sufficiency and the persuasiveness of the evidence provided, as well as the audit trail, will be assessed against the International Standards on Auditing. Capitalised costs claimed as depreciation costs must be supported by:  proper registration in the assets’ register  evidence of actual use for the action, e.g. through time registration  adequate calculation of potential use (total productive time)  adequate calculation of the useful economic life of the asset  evidence that depreciation is calculated in line with the beneficiary’s usual accounting principles and the applicable accounting standards. 4.2 Costs must be incurred in direct relationship with the research infrastructure and with the action Beneficiaries cannot declare their full organisational or general operating costs, even if they are fully research-oriented (e.g. a research organisation, technical university, research enterprise). These costs are covered by the flat-rate for indirect costs (see Article 6.2.E). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 90 Only costs that have been incurred in direct relationship with the research infrastructure and that are necessary for the implementation of the action can be claimed as direct costs under Article 6.2.D.4. This applies if:  for capitalised costs: the implementation of the action specifically requires the use of the research infrastructure  for operating costs: the functioning of the research infrastructure specifically requires the assignment of administrative and support staff, or the award of service or supply contracts. Beneficiaries must be able to demonstrate eligibility by means of an audit trail and sufficient evidence, such as:  their usual management practices and procedures Only written and consigned practices and procedures which are part of the beneficiary’s internal control framework will be accepted. Oral statements will not be accepted.  internal management exchanges necessary for the approval of an underlying transaction  purchase orders, delivery notes, invoices, proof of payment or any other evidence of exchanges between the client and the provider(s) prior to signature of the contract or agreement The beneficiary must prove the reality of the underlying transaction (including the absence of a credit note or back-payment offsetting the transaction). Gathering such evidence may require a comprehensive analysis of the beneficiary’s general ledger.  for works contracts, any statement of work in progress, delivery status or assembling overview. The evidence mentioned in the last three points must be explicitly linked to the specific research infrastructure and/or action, and to the specific cost item. Beneficiaries may prove the direct link through alternative persuasive evidence. The sufficiency and the persuasiveness of the alternative evidence provided, as well as the audit trail, will be assessed against the International Standards on Auditing. Example 1 (Link between research infrastructure and action(s)): A beneficiary involved in different research areas owns several research infrastructures: an oceanographic vessel and a laboratory for microbiological analysis. Costs relating to the oceanographic vessel cannot be claimed as direct costs for an action for which it is not used (e.g. an action on eradicating malaria in Africa or on setting up a network for social intelligence). Part of the costs of the vessel can however be claimed where the vessel is used for an action (e.g. an action on seismic oceanography or on the oceanic ecosystem), provided the beneficiary demonstrates the extent of use (e.g. through a board-book). Similarly, part of the laboratory costs can be claimed for an action on eradicating malaria in Africa or on the oceanic ecosystem, provided the beneficiary demonstrates the extent to which the laboratory is used for the action. The costs of the two research infrastructures cannot be declared for the action on setting up the network for social intelligence. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 91 4.3 Costs must not be included as direct costs in any other category Costs may not be declared twice (see Article 6.5)27. Thus:  any (part of a) cost item that has been capitalised and recorded as an asset is de facto included in the depreciation costs of the infrastructure and cannot be declared in another cost category (e.g. if the capitalised costs of installing a large telescope are depreciated, they cannot be declared as operating costs)  (part of) the costs of an infrastructure that have already been declared in respect of another EU or Euratom grant (including grants awarded by a Member State, or by bodies other than the Commission for the purpose of implementing the EU or Euratom budget) cannot be declared again (e.g. costs already declared in an FP7 action to set up or renew an infrastructure; costs already declared in an action under the ‘Research Infrastructures’ Part of Horizon 2020 with (i.e. providing of trans-national access to research infrastructure; see Article 16); costs already declared in a grant co-financed by the Structural Funds or the ESIF Funds) This means that a cost item already declared under a Structural Funds or ESIF grant cannot be declared again under the Horizon 2020 grant. However, cost items that have not already been declared under a Structural Funds or ESIF grant, may be declared under the Horizon 2020 grant, even if they belong to the same action (‘synergies between Horizon 2020 and the Structural Funds and ESIF Funds’). 4.4 Costs must be directly measured Costs can be claimed as direct costs under Article 6.2.D.4 only if they are ‘directly measured’ (i.e. directly quantified by a monetary value assigned to a given cost item, or a share of it). The measurement system used by the beneficiary must accurately quantify the cost (i.e. reflect its actual true value), be supported by sufficient persuasive evidence and be auditable. This is considered to be the case if the unit of measurement (generally obtained from the supplier’s invoice) is that used to measure the direct consumption of the item. This measurement must be accurate (i.e. show the real consumption and/or use of a cost item on the action), therefore only actual elements of cost and consumption or use are accepted. Direct measurement of costs does NOT mean ‘fair apportionment’ through proxies or cost drivers — which was standard for declaring real indirect costs under FP7. (Fair apportionment is not a measurement but an attempt to estimate the costs that were incurred for an action. Direct measurement implies that a cost cannot be attributed to projects via an allocation key, a cost driver or a proxy.) 27 See Article 129(1) of the Financial Regulation. The terminology under the different regimes — Horizon 2020, the Structural Funds and the ESIF Funds — may differ (e.g. ‘capitalised costs’ under Horizon 2020 versus ‘investment costs’ under the Structural Funds, etc.). . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 92 Example 2 (Comparison between fair apportionment and direct measurement): Under the fair apportionment method, the general electricity costs of a beneficiary operating a laboratory used for an action are allocated to the pool of indirect cost and then apportioned fairly via an absorption method (e.g. m2). Under the direct measurement method, the cost is claimed as direct cost; however the beneficiary must ensure that the electricity invoice specifies the electricity costs for the research infrastructure (explicitly labelled invoice or separate invoice). Moreover, the cost must then be measured with respect to the actual time of use of the research infrastructure for the action. While accurate measurement systems may differ depending on the nature of the cost, they will normally involve time actually used for the action (‘project time’) and therefore require reliable time recording (through timesheets, logbooks, counters, etc.). The measurement system must be justifiable through sufficient persuasive evidence and auditable. Project time must correspond:  for the costs of administrative and support staff directly assigned to the functioning of the research infrastructure: to the number of hours actually worked for the action, measured and documented in accordance with Article 31 of the Rules for Participation Regulation No 1290/2013  for the other costs of the research infrastructure: to the number of hours/days/months of actual use of the research infrastructure for the action as a part of full capacity (i.e. the number of productive hours/days/months corresponding to the full potential use of the infrastructure) This includes any time during which the research infrastructure is usable but not used, but take due account of real constraints such as the opening hours of the entity, repair and maintenance time (including calibrating and testing) due to research activities. If a cost can be directly measured to the research infrastructure but — because of technical constraints — cannot be measured directly to the action, beneficiaries may measure costs by means of ‘units of actual usage’ for the action, supported by accurate technical specifications and actual data and determined on the basis of the beneficiary’s analytical cost accounting system. This data must be regularly updated. Example 3 (Costs of administrative and support staff directly assigned to the functioning of the research infrastructure): If an employee of the administration and finance department is employed to carry out specific tasks necessary for the operation of a research infrastructure specifically used for an action (e.g. assigning time-slots between users, monitoring actual use, managing security contracts), the personnel costs can be declared as direct costs of the action, in proportion to H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 93 the time the employee actually spent on the action and provided that this is recorded reliably. Example 4 (Part-time use of the research infrastructure for the action): An oceanographic vessel is used full-time for a period of two months for an EU- funded action and three months for a non-EU research project (or for a non-research activity (commercial, industrial, etc.) of the beneficiary) and stays idle for seven months. If the annual costs of the vessel (i.e. capitalised and operating costs) amount to EUR 120 000, the part that can be declared for the EU funded action is: (EUR 120 000 / 12 months) x 2 months = EUR 20 000 AND NOT: (EUR 120 000 / 5 months28) x 2 months = EUR 48 000 Renting or leasing costs can be directly measured to an action as follows: Example 5 (Rental/leasing costs): The surface area of the premises rented/leased by a beneficiary is occupied as follows: * 50 % by a research infrastructure; * 50 % by conference rooms and offices. The overall rental/leasing costs are EUR 100 000 per year, split (according to the rental/leasing agreement) as follows: * EUR 80 000 for the research infrastructure; * EUR 20 000 for the conference rooms and offices. The rental costs that can be claimed as direct costs for an action using this research infrastructure are determined as follows: Step 1 Calculation of the rental costs that can be directly attributed to the research infrastructure On the basis of the rental/leasing agreement, the invoice must refer to separate amounts for the research infrastructure and the conference rooms/offices (the rental/leasing costs cannot be directly allocated on the basis of the respective surface areas). 28 5 months = 2 months for an EU funded action + 3 months for non-EU research or other activities. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 94 The basis for the calculation must be EUR 80 000 and not EUR 50 000 (EUR 100 000 x 50 % of m²). Step 2 The rental/leasing amount invoiced for the research infrastructure (i.e. EUR 80 000) is precisely distributed between the activity(ies) and project(s) that make use of it (best practice: time of actual use). Installed usage capacity is taken (so as not to exclude idle time) and the resulting cost per unit of usage is multiplied by actual usage on the action (which thus absorbs its share of the overall renting/leasing cost). Best practices (for direct measurement):  Depreciation (for capitalised costs): accounting statements accompanied by the beneficiary’s depreciation policy (under its usual accounting principles), to show adequate calculation of the potential use of the asset (total productive time based on full capacity) + calculation of the useful economic life of the asset, evidence of project time (or units of actual usage for the action) and evidence of the actual use of the asset for the action  Rental or lease of the research infrastructure: specific explicitly labelled rental or lease invoice/contract; adequate calculation of the potential use of the asset (total productive time based on full capacity) + calculation of the useful economic life of the asset, evidence of project time (or units of actual usage for the action) and evidence of the actual use of the asset for the action  Personnel (administrative and support staff): time recording (without prejudice to the need for persuasive evidence of actual involvement in the action)  Maintenance and repair (including calibrating and testing): specific explicitly labelled invoice relating to the research infrastructure + project time (or units of actual usage for the action)  Consumables, materials and spare parts: specific explicitly labelled invoice relating to the research infrastructure, if available, or stocktaking; actual consumption for the action (based on analytical cost accounting) or project time (or units of actual usage for the action)  Facilities management, including security fees, insurance costs, quality control and certification, upgrading to national and/or EU quality, safety or security standards: specific explicitly labelled invoice relating to the research infrastructure + project time (or units of actual usage for the action)  Energy and water: specific explicitly labelled invoice relating to the research infrastructure + project time (or units of actual usage for the action). The energy consumption of a specific research infrastructure can be obtained from the measured consumption (e.g. number of kilowatts per hour of use), as stated in its technical specifications or provided by the supplier or an independent body. These specifications must be identifiable and verifiable. Alternative to best practices: The beneficiaries may determine eligible direct costs on the basis of an aggregate of the capitalised and operating direct costs of each research infrastructure. Direct measurement allows to determine a ‘cost per unit of use’ covering all the actual direct costs relating to the operation of the research infrastructure being used for the action, i.e. depreciation costs plus necessary operating costs of the research infrastructure. This cost remains however an actual cost, NOT a unit cost under Article 5.2. The cost per unit of use must be calculated as follows: {all capitalised costs of the research infrastructure + all operating costs of the research infrastructure} total annual capacity The unit of use must correspond to: (i) the time of use expressed in hours, days or months and supported by evidence or (ii) the number of accesses, for which supporting evidence may take the form of records or electronic log of units-of-access provision. The calculation must take due account of real constraints (e.g. opening hours), but must reflect the research infrastructure’s full capacity and include any time during which the research infrastructure is usable but not used or any unit of access available but not used. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 95 The direct costs that can be claimed are calculated as follows: actual eligible costs per unit of use x actual number of units of use used on the action. The calculation must be verifiable, i.e. allow for a sufficient audit trail reconciling it to the beneficiary’s statutory accounts. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 96 1. Indirect costs: Types of costs — Cost forms — Conditions for eligibility — Cost calculation This budget category applies to all to all RIA, IA and CSA grants under the General MGA. 1.1 This budget category covers all costs for the action that are not directly linked to it (see Article 6.2). 1.2 Indirect costs must be declared on the basis of a flat-rate (see Article 5.2(e); new in Horizon 2020). In practice, the declaration is completely automatized: The indirect costs are automatically calculated by the IT system (on the basis of the direct costs). 1.3 The costs must comply with the following conditions for eligibility:  fulfil the general conditions for flat-rate costs to be eligible (i.e. costs to which the flat- rate is applied must be eligible, correct calculation etc.; see Article 6.1(c)) 1.4 They must be calculated by applying a 25 % flat-rate to the beneficiary’s eligible direct costs, minus: However, beneficiaries that receive an operating grant financed by the EU or Euratom budget can NOT declare any indirect costs for the reporting period(s) covered by the operating grant. Best practice: The beneficiary must inform both the coordinator and the Commission/Agency during grant preparation and before submitting financial statements (via the Participant Portal). ‘Operating grants’ are (normally annual) grants given by a separate grant agreement to finance the operation and running costs of an entity e.g. call COMM-C2/01-2013 under the ‘Europe for Citizens’ programme. . E. Indirect costs [(not covered by Point F)] Indirect costs are eligible if they are declared on the basis of the flat-rate of 25% of the eligible direct costs (see Article 5.2 and Points A to D above), from which are excluded: (a) costs of subcontracting [and][;] (b) costs of in-kind contributions provided by third parties which are not used on the beneficiary’s premises [and][;] (c) [OPTION to be used if Article 15 applies: costs of providing financial support to third parties[and][;]][OPTION: not applicable;] (d) [OPTION if Article 6.2.F applies and the specific unit cost[/lump sum] cost covers indirect costs: [unit costs under Articles 5.2(f) and 6.2.F.][lump sum costs under Articles 5.2(f) and 6.2.F.]] [OPTION: not applicable.] Beneficiaries receiving an operating grant 21 financed by the EU or Euratom budget cannot declare indirect costs for the period covered by the operating grant. 21 For the definition, see Article 121(1)(b) of the Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002 (‘Financial Regulation No 966/2012’)(OJ L 218, 26.10.2012, p.1): ‘operating grant’ means direct financial contribution, by way of donation, from the budget in order to finance the functioning of a body which pursues an aim of general EU interest or has an objective forming part of and supporting an EU policy. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 97  subcontracting costs (see Article 13) Example: subcontracting of opinion surveys. The purchase of goods, work or services that are not action tasks described in Annex 1 (see Article 10) is NOT considered subcontracting, and are therefore not subtracted when calculating the 25 % flat rate.  costs of in-kind contributions incurred by third parties outside of the beneficiary’s premises  costs of providing financial support to third parties (if option applies)  costs from specific cost categories (unit or lump-sum costs) that include indirect costs (e.g. ‘costs for energy efficiency measures in buildings’, ‘access costs for providing trans- national access to research infrastructure’ and ‘costs for clinical studies’). Example for calculating indirect costs: A public university is a beneficiary under a grant agreement and has incurred the following costs - EUR 100 000 in personnel costs (EUR 7 000 of which are an in-kind contribution made by a laboratory technician carrying out work for the action from his/her laboratory in a public research centre), - EUR 20 000 in subcontracting costs, - EUR 10 000 in consumables costs. Eligible direct costs: 100 000 + 20 000 + 10 000 = EUR 130 000 Eligible indirect costs: 25 % of (100 000 – 7 000 + 10 000) = EUR 25 750 Total eligible costs: EUR 155 750 H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 98 1. Specific cost categories: Types of costs — Cost forms — Conditions for eligibility — Cost calculation This optional budget category will be inserted into RIA, IA and CSA GAs, if the action involves activities for which the beneficiaries may declare specific unit or lump sum costs, i.e. currently:  actions under Part III of the Horizon 2020 Framework Programme, Societal Challenge 3 ‘Secure, clean and efficient energy’ involving energy efficiency measures in buildings: ‘costs for energy efficiency measures in buildings’ This unit cost applies ONLY to Smart Cities and Communities calls (e.g. SCC-01-2014 for the Work Programme 2014-2015) and ONLY to the building-related demonstration activities.  actions under Part I, ‘Research infrastructures’: ‘access costs for providing trans- national access to research infrastructure’ The unit cost applies ONLY to actions with ‘provision of access activities’. Examples: INFRAIA-1-2014-2015, INFRADEV-3-2015 and INFRADEV-4-2014-2015  actions under Part III, Societal Challenge 1 ‘Health, demographic change and wellbeing’: ‘costs for clinical studies’ The unit cost applies ONLY to actions with clinical studies. F. [OPTION: [Insert name of specific cost category(ies) 22 ]][OPTION if no specific cost categories applicable to the grant: Specific cost category(ies)] [OPTION for specific unit costs (unit cost foreseen by Commission decision and applicable to the grant): [insert name of specific cost category] are eligible if they correspond to the amount per unit set out in Annex 2 multiplied by the number of actual units [and if [insert eligibility conditions, if any]].] [OPTION for specific lump sum costs (lump sum foreseen by Commission decision and applicable to the grant: [Insert name of specific cost category] are eligible, if they correspond to the lump sum set out in Annex 2 and the corresponding tasks or parts of the action have been properly implemented in accordance with Annex 1.] [same for each specific cost category] [OPTION: Not applicable] 22 Insert precise name of the cost category (as in the Commission decision authorising the use of the unit cost/lump sum). For example: ‘access costs for providing trans-national access to research infrastructure’, ‘costs for clinical studies’, ‘costs for energy efficiency measures in buildings’. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 99 1.1 ‘Specific cost category – costs for energy efficiency measures in buildings’ 1.1.1 This budget category covers three categories of direct and indirect costs:  costs of purchasing equipment, infrastructures and other assets directly necessary for additional energy efficiency measures in buildings  costs of subcontracting the works necessary for those measures  indirect costs for those measures. Examples: the costs of building elements (such as new insulation, new ventilation system, window, door, heating elements, control system) and the man-days for installing the building elements will be covered. What not? Fluids. 1.1.2 Costs of additional energy efficiency measures must be declared on the basis of the unit cost set out in Commission Decision C(2013) 819629 and set out in Annexes 2 and 2a of the GA. The precise unit cost is not pre-fixed by the Decision; the ‘amount per unit’ (EUR/m2 of eligible conditioned gross floor area) must be calculated — before signature of the GA — according to the following formula: Amount per unit = {EUR 0.1 x estimated total kWh saved per m² per year x 10} Beneficiaries may however submit a proposal requesting funding for a number of kWh saved per m² per year lower than the estimated one. But this will not be evaluated as an advantage against other proposals. The energy efficiency measures and the amount per unit must already be part of the proposal (see the proposal templates and the BEST table provided on the call pages) and be included in Annexes 1 and 2a. 1.1.3 The costs must comply with the following conditions for eligibility:  fulfil the general conditions for unit costs to be eligible (i.e. units used during the action duration, necessary, linked to the action, correct calculation, etc.; see Article 6.1(b))  be incurred for energy efficiency measures in buildings that go beyond the national regulation or, if there is no national regulation applicable, beyond the market practice (e.g. for refurbishment of buildings) 1.1.4 They must be calculated as follows: amount per unit (see Annex 2a GA) x number of actual m2 of surface area built or refurbished (‘conditioned’) The ‘m2 of eligible conditioned gross floor area’ may NOT include parts of the buildings which are not affected by the measures, e.g. garages. 29 Available at http://ec.europa.eu/research/participants/data/ref/h2020/other/legal/unit_costs/unit- costs_energy_en.pdf. Costs that are declared as a specific unit or lump sum cost may NOT be declared (a second time) under another budget category (for the costs that are covered, see below). Example: The unit cost for ‘efficiency energy measures in buildings’ covers subcontracting costs related to the energy efficiency measures. These cannot be declared as direct costs of subcontracting. By contrast, costs for subcontracts not included in the unit cost (e.g. subcontracts required by the implementation of the action but not related to the efficiency energy measures) can be declared. . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 100 Example for calculating unit costs for energy efficiency measures: Assuming that the refurbishment of a building results in energy savings of 100 kWh/m²/year Payback period (standard figure to be used in the calculation) = 10 years Standard cost in euro to save 1 kWh (standard figure to be used in the calculation)= 0,1EUR/kWh The formula gives: {standard cost in euro to save 1 kWh * estimated total kWh saved per m² per year * standard payback period in years} = 0.1EUR/kWh * 100kWh/m²/year * 10 years= 100 EUR/m² After application of the 70% funding rate for innovation actions (or for non-profit beneficiaries/linked third parties: 100%), it will give an indicative EU contribution of 70 EUR/m² (or 100 EUR/m² if the funding rate is 100%). 1.2 ‘Specific cost category – access costs for providing trans-national access to research infrastructure’ 1.2.1 This budget category covers direct and indirect ‘access costs for providing trans-national access to research infrastructure’ (i.e. the installation’s operating costs and costs related to logistical, technological and scientific support for users, including ad-hoc user training and the preparatory and closing activities needed to use the installation). What not? Travel and subsistence costs for users to get access are not included in the access costs. (These costs can be reimbursed separately, as ‘other direct costs’; see Article 6.2.D.1 and Article 16). 1.2.2 If they are declared under this budget category (i.e. specific cost category – access costs for providing trans-national access to research infrastructure), the costs must be declared on the basis of the unit cost calculated in accordance with Commission Decision C(2013) 819930 and set out in Annex 2 and 2a of the GA. The precise unit cost is not pre-fixed by the Decision; it must be established for each access provider and installation — before signature of the GA. The ‘unit of access’ to the installation must be identified (i.e. the unit used to measure the total quantity of access that the installation provides to its users) The ‘amount per unit of access’ (EUR/unit of access) must be calculated according to the following formula: Amount per unit = average annual total access cost (over past two years31) average annual total quantity of access (over past two years32) The averages must be based on:  the beneficiary’s certified or auditable historical data  costs allocated to the installation according to the beneficiary’s usual cost accounting practices (including where the installation has been in operation for less than two years) and  a period excluding times when the installation was not usable (out of order, under repair or undergoing long-term maintenance). Access providers may however submit a proposal with a unit cost calculated on the basis of average costs lower than their historical costs. The ‘total quantity of access’ means all the units of access annually provided by the installation, included access financed by the EU under previous grant agreements, if any. The ‘annual total access costs to the installation’ is calculated on the basis of the following categories of eligible costs:  the direct costs incurred by the access provider for the ‘annual total quantity of access to the installation’, as recorded in the certified or auditable profit-and-loss accounts of the reference period (years N-1 and N-2) for: 30 Available at http://ec.europa.eu/research/participants/data/ref/h2020/other/legal/unit_costs/unit-costs_tna- infra_en.pdf. 31 In exceptional and duly justified cases, the Commission may agree to a different reference period. 32 In exceptional and duly justified cases, the Commission may agree to a different reference period. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 101  personnel costs of administrative, technical and scientific staff directly assigned to the functioning of the installation and to the support of the users Exceptionally, these costs may be calculated in accordance with the beneficiary’s usual cost accounting practices (‘average personnel costs’).  costs of contracts for maintenance and repair (including specific cleaning, calibrating and testing) specifically awarded for the functioning of the installation (if not capitalised)  costs of consumables specifically used for the installation and the user’s research work  costs of contracts for installation management, including security fees, insurance costs, quality control and certification, upgrading to national and/or EU quality, safety or security standards (if not capitalised) specifically incurred for the functioning of the installation  costs of energy power and water supplied for the installation  costs of general services when they are specifically included in the provided access services (library costs, shipping costs, transport costs)  costs of software licence, internet connection or other electronic services for data management and computing when they are needed to provide access services  costs of specific scientific services included in the access provided or needed for the provision of access  the indirect costs for providing access to the installation, equal to 25% of the eligible direct costs, minus any costs of subcontracting (i.e. costs of contracts for maintenance and repair, installation management, scientific services and other electronic services) AND excluding:  all contributions to the capital investments of the installation (including costs of renting or leasing or depreciation costs of buildings as well as depreciation and leasing of instrumentation). (Those costs are not eligible; see also Article 6.2.D.2)  travel and subsistence costs for users. Example (amount per unit): Assuming that a telescope provided 6 100 hours of access in year N-1 and 5900 hours of access in year N-2 and that the total access costs (for the provision of these total quantities of access) in the two years calculated on the basis of the categories of costs indicated above (with the exclusion of any contribution to capital investment and of travel and subsistence costs of users) is respectively EUR 3 200 000 and EUR 2 800.000, then the unit cost is Average costs = average (3 200 000, 2 800 000) = 3 000 000 Average hours = average (6100, 5900) = 6000 Unit cost = average (3 200 000, 2 800 000) / average (6100, 5900) = 3 000 000 /6000 = 500 € The access activities and the parameters for calculating the unit cost must already be part of the proposal (see proposal templates and the calculation table provided on the call pages) and be included in Annexes 1 and 2a. The proposal should describe both the access services provided and the logistical, technological and scientific support users need in order to make use of the installation (including ad-hoc training and preparatory and closing activities necessary to use the installation). As mentioned above, before GA signature, the beneficiaries can still opt for declaring the costs not as unit cost, but as actual costs under other budget categories (see Article 6.2.A-E). (One cost form per installation and access provider). The use of unit costs for trans-national access activities is optional, i.e. each beneficiary/linked third party can decide independently whether to be reimbursed on the basis of unit costs, actual costs or a combination of the two. During the GA, the beneficiaries may change their choice, but only via an amendment to the agreement (see Article 55). 1.2.3 The costs must comply with the following conditions for eligibility: H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 102  fulfil the general conditions for costs to be eligible (i.e. incurred/used during the action duration, necessary, linked to the action, correct calculation, etc.; see Article 6.1(a) and (b))  be incurred for providing trans-national access to research infrastructure to scientific communities  fulfil the additional cost eligibility conditions set out in Article 16.1 1.2.4 They must be calculated as follows: amount per unit (see Annex 2a GA) x number of actual units of access provided 1.3 ‘Specific cost category – costs for clinical studies’ 1.3.1 This budget category covers the following direct and indirect costs for ‘clinical studies’ (i.e. any clinical research involving a substantial amount of work related to the observation of, data collection from, or diagnostic or therapeutic intervention on multiple or individual patients):  direct personnel costs of the doctors and other medical personnel and technical personnel (including data managers) that conducted the study  direct costs of consumables used for the study;  direct costs of the medical equipment used for the study, including:  depreciation costs  costs of service contracts necessary for their functioning (including specific cleaning, maintenance and repair)  costs of other specific service contracts necessary for the study (including data analysis, if subcontracted)  indirect costs for the study. 1.3.2 If they are declared under this budget category (i.e. specific cost category – costs for clinical studies’), the costs must be declared on the basis of the unit cost set out in Commission Decision C(2014) 1393 and set out in Annex 2 and 2a of the GA. The precise unit cost is not pre-fixed by the Decision; the ‘amount per unit’ (EUR/patients or subjects included in the clinical study) must be calculated for each study and beneficiary/linked third party/third party providing in-kind contributions — before signature of the GA — according to the following formula: Amount per unit ={Task 1 {unit cost component ‘personnel costs’ + unit cost component ‘costs of consumables’ + unit cost component ‘costs of medical equipment’ + unit cost component ‘costs of other specific services’ + unit cost component ‘indirect costs’} + Task 2 {unit cost component ‘personnel costs’ + unit cost component ‘costs of consumables’ + unit cost component ‘costs of medical equipment’ + unit cost component ‘costs of other specific services’ + unit cost component ‘indirect costs’} [same for all other tasks] } The unit cost components must be calculated as follows: H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 103 Unit cost component ‘personnel costs’ (i.e. ‘personnel costs of doctors’ + ‘personnel costs of other medical personnel’ + ‘personnel costs of technical personnel’) For unit cost component ‘personnel costs of doctors’: {‘average hourly cost for doctors’, i.e.: certified or auditable total personnel costs for doctors for year N-1 _________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ {1720 * number of full-time-equivalent for the personnel category doctors for year N-1} multiplied by estimated number of hours worked by doctors for the task (per patient/subject)} For unit cost component ‘personnel costs of other medical personnel’: {‘average hourly cost for other medical personnel’, i.e.: certified or auditable total personnel costs for other medical personnel for year N-1 _________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ {1720 * number of full-time-equivalent for the personnel category other medical personnel for year N-1} multiplied by estimated number of hours worked by other medical personnel for the task (per patient/subject)} For unit cost component ‘personnel costs of technical personnel’: {average hourly cost for technical personnel, i.e.: certified or auditable total personnel costs for technical personnel for year N-1 _________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ {1720 * number of full-time-equivalent for the personnel category technical personnel for year N-1} multiplied by estimated number of hours worked by technical personnel for the task (per patient/subject)} ‘total personnel costs’ means actual salaries + actual social security contributions + actual taxes and other costs included in the remuneration, provided they arise from national law or the employment contract/equivalent appointing act Unit cost component ‘costs of consumables’ (i.e. ‘costs of consumables category 1 + ‘costs of consumables category 2’ + ‘costs of consumables category 3’, etc.) For each category of consumables: {‘average price per item’, i.e.: {certified or auditable total costs of purchase of the consumables in year N-1 for the category of consumables concerned _________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ total number of items purchased in year N-1 for the category of consumables concerned} multiplied by estimated number of items used for the task (per patient/subject)} ‘total costs of purchase of the consumables’ means total value of the supply contracts (including related duties, taxes and charges such as non-deductible VAT) concluded by the beneficiary for consumables delivered in year N-1, provided the contracts were awarded according to the principle of best value- for-money and without any conflict of interests Unit cost component ‘costs of medical equipment’ (i.e. ‘costs of medical equipment category 1’ + ‘costs of medical equipment category 2’ + ‘costs of medical equipment category 3’, etc.) For each category of medical equipment: {‘average cost of depreciation and directly related services per unit of use’, i.e.: {certified or auditable total depreciation costs in year N-1 for the category of equipment concerned + certified or auditable total costs of purchase of services in year N-1 for the category of equipment concerned} _________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ total capacity in year N-1 multiplied by estimated number of units of use of the equipment for the task (per patient/subject)} ‘total depreciation costs’ means total depreciation allowances as recorded in the beneficiary’s accounts of year N-1 for the category of equipment concerned, provided the equipment was purchased according to the principle of best value for money and without any conflict of interests + total costs of renting or leasing contracts (including related duties, taxes and charges such as non-deductible VAT) in year N-1 for the category of equipment concerned, provided they do not exceed the depreciation costs of similar equipment and do not include finance fees H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 104 Unit cost component ‘costs of other specific services’ (i.e. ‘costs of contracts for specific service 1’ + ‘costs of contracts for specific service 2’ + ‘costs of contracts for specific service 3’, etc.) For each category of specific service: ‘average cost of a specific service per patient or subject’, i.e.: certified or auditable total costs of purchase of a service in year N-1 for the category of specific services necessary for the conduct of clinical studies _________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ total number of patients or subjects included in the clinical studies for which the specific service was delivered in year N-1 ‘total costs of purchase of a service’ means total value of the contracts concluded by the beneficiary (including related duties, taxes and charges such as non-deductible VAT) for the specific service delivered in year N-1 for the conduct of clinical studies, provided the contracts were awarded according to the principle of best value for money and without any conflict of interests Unit cost component ‘indirect costs’ {25% multiplied by {unit cost component ‘personnel costs’ + unit cost component ‘costs of consumables’ + unit cost component ‘costs of medical equipment’}} The following must be excluded:  costs of in-kind contributions provided by third parties which are not used on the beneficiary’s premises and  costs of providing financial support to third parties (if any). The estimation of the resources must be done on the basis of the protocol for the clinical study (and must be the same for all beneficiaries/linked third parties/third parties involved). Each beneficiary/linked third party/third party providing in-kind contributions must calculate the direct costs by using its historical costs recorded in its certified or auditable profit and loss accounts for year N-1 (last closed financial year at the time of submission of the grant application). Personnel costs must be defined in the 3 categories (doctors, other medical personnel, technical personnel) defined in the Commission Decision. No other categories (e.g. 'nurses') can be used. The descriptions of the resources and the parameters for calculating the unit cost must already be part of the proposal (see the proposal templates and the template for essential information to be provided for proposals including clinical trials / studies/ investigations provided on the call pages) and be included in Annex 1 and 2a of the GA. As mentioned above, before GA signature, the beneficiaries can still opt for declaring the costs not as unit cost, but as actual costs under other budget categories (see Article 6.2.A-E). (One cost form per study and beneficiary/third party.) The use of unit costs for clinical studies is optional, i.e. each beneficiary/linked third party can decide independently whether to be reimbursed on the basis of unit costs or of costs actually incurred for a given clinical study. 1.3.3 The costs must comply with the following conditions for eligibility:  fulfil the general conditions for unit costs to be eligible (i.e. units used during the action duration, necessary, linked to the action, correct calculation, etc.; see Article 6.1(b))  be incurred for carrying out clinical studies. 1.3.4 They must be calculated as follows: amount per unit (see Annex 2a GA) x the number of patients or subjects that participated in the study H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 105 1. Costs of linked third parties This option (together with the corresponding Article 14 and other provisions) will be inserted into the GA if the action is implemented with linked third parties. The costs of linked third parties are eligible, if:  they fulfil — mutatis mutandis — the general conditions and specific conditions for costs to be eligible (see Article 6.1 and 6.2) and  they fulfil the additional cost eligibility conditions set out in Article 14.1.1. ‘Mutatis mutandis’ means with the necessary modifications; the same rules apply, but with the changes needed to render them applicable to the linked third parties. Examples: 1. ‘Incurred by the beneficiary’ should be read as ‘incurred by the linked third party’. 2. ‘On the beneficiary’s payroll’ should be read as ‘on the linked third party’s payroll’. Depending on the type of cost, they must be declared by the linked third party under the corresponding budget category (as the beneficiary would use for its own costs). Examples: 1. Remuneration of employees must be declared as ‘personnel costs’ (Article 6.2.A.1). 2. Depreciation costs of equipment must be declared as ‘other direct costs – equipment’ (Article 6.2.D.2). 6.3 Conditions for costs of linked third parties to be eligible [OPTION to be used if Article 14 applies: Costs incurred by linked third parties are eligible if they fulfil — mutatis mutandis — the general and specific conditions for eligibility set out in this Article (Article 6.1 and 6.2) and Article 14.1.1.] [OPTION: Not applicable] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 106 1. In-kind contributions provided by third parties free of charge Contributions provided by third parties free of charge are eligible if:  they fulfil — mutatis mutandis — the general conditions and specific conditions for costs to be eligible (see Article 6.1 and 6.2) and  they fulfil the additional eligibility conditions set out in Article 12.1. Depending on the type of cost, they must be declared (by the beneficiary/linked third party) under the budget category they would use for their own costs. Example: Depreciation costs of equipment contributed free of charge must be declared as ‘other direct costs – equipment’ (Article 6.2.D.2). ‘In-kind contributions free of charge’ must be distinguished from ‘in-kind contributions against payment’ (see Article 11). In-kind contributions against payment are costs of the beneficiary/linked third party (because they have to pay) and are therefore already explicitly mentioned in the different budget categories (see Article 6.2.A.3, 6.2.D.2, 6.2.D.3). They must be declared under those budget categories. Example: 1. The cost of personnel seconded against payment must be declared as ‘personnel costs – costs of personnel seconded by a third party against payment’ (Article 6.2.A.3). 2. Costs of equipment contributed against payment must be declared as ‘other direct costs – equipment – cost of equipment, infrastructure or other assets contributed in-kind against payment’ (Article 6.2.D.2). . 6.4 Conditions for in-kind contributions provided by third parties free of charge to be eligible In-kind contributions provided free of charge are eligible direct costs (for the beneficiary [or linked third party]), if the costs incurred by the third party fulfil — mutatis mutandis — the general and specific conditions for eligibility set out in this Article (Article 6.1 and 6.2) and Article 12.1. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 107 1. Ineligible costs Costs are ineligible, if one of the following applies:  they do not meet the general and specific eligibility conditions set out in Articles 6.1 to 6.4 Examples: additional remuneration (‘bonuses’) paid by for-profit or non-profit entities do not fulfil the conditions set out in Article 6.2; subcontracting costs do not comply with Article 13  they are listed in Article 6.5, in particular:  costs related to return on capital or return generated by an investment Examples: dividends paid as remuneration for investing in the action; remuneration paid as a share in the company’s equity.  debt and debt service charges ‘Debt service’ is the amount paid on a loan in principal and interest, over a period of time. 6.5 Ineligible costs ‘Ineligible costs’ are: (a) costs that do not comply with the conditions set out above (Article 6.1 to 6.4), in particular: (i) costs related to return on capital; (ii) debt and debt service charges; (iii) provisions for future losses or debts; (iv) interest owed; (v) doubtful debts; (vi) currency exchange losses; (vii) bank costs charged by the beneficiary’s bank for transfers from the [Commission][Agency]; (viii) excessive or reckless expenditure; (ix) deductible VAT; (x) costs incurred during suspension of the implementation of the action (see Article 49); (b) costs declared under another EU or Euratom grant (including grants awarded by a Member State and financed by the EU or Euratom budget and grants awarded by bodies other than the [Commission][Agency] for the purpose of implementing the EU or Euratom budget); in particular, indirect costs if the beneficiary is already receiving an operating grant financed by the EU or Euratom budget in the same period [;][.] [(c) OPTION for cost categories explicitly excluded in the work programme: [insert name of excluded cost category]]. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 108 Example: If a beneficiary takes a loan used to acquire equipment or consumables for the project of EUR 100 000 at 9 percent interest for 10 years, the debt service for the first year (principal and interest) is EUR 15 582  provisions for future losses or debts ‘Provision’ means an amount set aside in an organisation’s accounts, to cover for a known liability of uncertain timing or amount. This includes allowances for doubtful or bad debts.  interest owed (i.e. interest on a loan to borrow capital)  excessive or reckless expenditure ‘Excessive’ means paying significantly more for products, services or personnel than the prevailing market rates or the usual practices of the beneficiary (and thus resulting in an avoidable financial loss to the action). ‘Reckless’ means failing to exercise care in the selection of products, services or personnel (and thus resulting in an avoidable financial loss to the action).  currency exchange losses (i.e. for beneficiaries using currencies other than euros or being invoiced in a currency other than the currency they use: any loss due to exchange rate fluctuations (e.g. between the date of invoicing and the date of payment))  bank costs charged by the beneficiary’s bank for transfers from the Commission/Agency. Conversely, bank charges for the distribution of the EU funding may constitute an eligible cost for the coordinator (if the cost eligibility conditions of Article 6.1 and Article 6.2.D.3 are met).  deductible VAT ‘Deductible VAT’ means VAT that is recoverable under the national ‘VAT system’ (i.e. the system of collection and deduction under the national VAT legislation). Such VAT is not a genuine and definitive cost and, according to accounting standards, should not be recorded as such. Therefore, it is not actually incurred by the beneficiary. The cost and revenue accounts should exclude deductible VAT; such VAT should be recorded in separate payable or receivable accounts, without effect on revenue or cost line items. The VAT paid is a claim against the tax authority. It should be recorded in the ‘assets’ part of the balance sheet. It should not be recorded as expenditure in the profit and loss accounts (only the purchase price of goods and services excluding VAT should be recorded). Similarly, for the value of purchased equipment or assets, only the net purchase cost should be recorded in the balance sheet’s fixed asset line, and the depreciation cost should be calculated based on this value, excluding VAT. The VAT collected is a debt towards the tax authority and should therefore be recorded in the ‘liabilities’ part of the balance sheet. Conversely, if VAT is NOT deductible, it is an eligible cost. The full price of the goods or services bought by the beneficiary can be recorded as expenditure in its profit and loss accounts, without any distinction between the net price and the amount of VAT charged on it. The full price of equipment and assets bought can be recorded in the balance sheet’s fixed asset line and is the basis for the depreciation allowances recorded in the profit and loss accounts. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 109  costs incurred during the suspension of the implementation of the action Example: Action is suspended and one of the beneficiaries continues working on it after the date of the suspension  costs declared under another EU or Euratom grant (i.e. double funding) This includes:  costs funded directly by EU programmes managed by the Commission or Executive Agencies (e.g. other H2020 grants)  costs managed/funded/awarded by Member States but co-funded with EU/Euratom funds (e.g. European Structural and Investment Funds (ESIF))  costs for grants awarded/funded/managed by other EU, international or national bodies and co-funded with EU/Euratom funds (e.g. Joint Undertakings, Article 185 TFEU bodies)  if a beneficiary is receiving an operating grant33 from the EU/Euratom (i.e. a grant to finance its functioning), then the indirect costs of that beneficiary are not eligible and the 25% flat-rate should not be applied. Examples (operating grants): Grants awarded to support the running costs of certain institutions pursuing an aim of European interest, such as: College of Europe, European standards bodies (CEN, CENELEC, ETSI).  cost categories explicitly excluded in the work programme/call (if option applies). Specific cases (ineligible costs): Non-identifiable VAT — In exceptional cases where the beneficiary cannot identify the VAT charged by the supplier (e.g. small non-EU invoices), the full purchase price can be recorded in the accounts, since non-identifiable VAT is not deductible. VAT is thus eligible. Partially deductible VAT — Some entities have a mixed VAT regime, meaning that they carry out VAT exempt or out-of-the-scope activities AND VAT taxed activities. When VAT paid on goods or services by these entities cannot be directly allocated to one or the other category of activities it will be partially deductible. Therefore it will also be partially eligible. The eligible part corresponds to the pro-rata of the VAT which is not deductible for that entity. In these cases, the beneficiary uses a provisional (estimated) deduction ratio during the year. The final ratio is only determined at the end of the fiscal year. The beneficiary must regularise VAT when closing its accounts. Therefore, the beneficiary must also regularize the VAT costs declared for the grant (by declaring, in the next reporting period, an adjustment for the difference between the provisional deduction ratio and the final ratio). 33 For the definition, see Article 121(1)(b) of the Financial Regulation: ‘operating grant’ means direct financial contribution, by way of donation, from the budget in order to finance the functioning of a body which pursues an aim of general EU interest or has an objective forming part of and supporting an EU policy. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 110 1. Consequences of declaration of ineligible costs The other measures specified in Chapter 6 (e.g. reduction of the grant) may be applied in addition to the ineligible costs being rejected. 6.6 Consequences of declaration of ineligible costs Declared costs that are ineligible will be rejected (see Article 42). This may also lead to any of the other measures described in Chapter 6. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 111 CHAPTER 4 RIGHTS AND OBLIGATIONS OF THE PARTIES SECTION 1 RIGHTS AND OBLIGATIONS RELATED TO IMPLEMENTING THE ACTION ARTICLE 7 — GENERAL OBLIGATION TO PROPERLY IMPLEMENT THE ACTION 1. Proper implementation of the action The beneficiaries must properly implement the action. This general obligation is twofold, i.e. they must:  carry out the action (and especially the research work) as detailed in Annex 1 (‘technical implementation’) The beneficiaries must prevent delays in implementing the action, or reduce them as much as possible. In addition, they must immediately inform the Commission/Agency (see Article 17). AND  comply with all the other provisions of the GA and all the applicable provisions of EU, international and national law. Example: Each beneficiary must comply in particular with the labour law applicable to the personnel working on the action and must fulfil the tax and social obligations related to the activities it carries out under the relevant national law. CHAPTER 4 RIGHTS AND OBLIGATIONS OF THE PARTIES SECTION 1 RIGHTS AND OBLIGATIONS RELATED TO IMPLEMENTING THE ACTION ARTICLE 7 — GENERAL OBLIGATION TO PROPERLY IMPLEMENT THE ACTION 7.1 General obligation to properly implement the action The beneficiaries must implement the action as described in Annex 1 and in compliance with the provisions of the Agreement and all legal obligations under applicable EU, international and national law. 7.2 Consequences of non-compliance If a beneficiary breaches any of its obligations under this Article, the grant may be reduced (see Article 43). Such breaches may also lead to any of the other measures described in Chapter 6. Normally, the beneficiaries must comply BOTH with the national law of the country in which they are established and that of the country where the action is implemented. . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 112 ARTICLE 8 — RESOURCES TO IMPLEMENT THE ACTION — THIRD PARTIES INVOLVED IN THE ACTION 1. Appropriate own resources — Use of third party resources — Third parties involved in the action The beneficiaries must normally have the technical and financial resources needed to carry out the action themselves. The resources must be available at the moment of the implementation of the work (but not necessarily at the moment of submitting the proposal or signing the GA). However, in these last two cases, the beneficiaries must show in the proposal how the resources will be made available when they are needed. Example (acceptable): Start-up company with no resources at the time of proposal submission, but with a credible business plan described in the application. Example (acceptable): SME which, if successful, intends to double its capacity/staff. Example (not acceptable): Consultancy company which submits a proposal where the majority of the work is subcontracted. As an exception, beneficiaries may purchase goods, works or services (see Article 10), use in-kind contributions provided by third parties (see Articles 11 and 12) or call upon subcontractors or linked third parties to carry out work under the action (see Articles 13 and 14) and declare these costs for the action (‘third parties involved in the action’). Third parties involved in the action do not sign the GA (see Article 1). The differences between subcontracts (Article 13) and other contracts for purchase of goods, works or services (Article 10) are: Beneficiaries using third parties remain fully responsible for them under the GA. ARTICLE 8 — RESOURCES TO IMPLEMENT THE ACTION The beneficiaries must have the appropriate resources to implement the action. If it is necessary to implement the action, the beneficiaries may: - purchase goods, works and services (see Article 10); - use in-kind contributions provided by third parties against payment (see Article 11); - use in-kind contributions provided by third parties free of charge (see Article 12); - call upon subcontractors to implement action tasks described in Annex 1 (see Article 13); - call upon linked third parties to implement action tasks described in Annex 1 (see Article 14). In these cases, the beneficiaries retain sole responsibility towards the [Commission][Agency] and the other beneficiaries for implementing the action. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 113 Article 10 Contracts to purchase goods, works or services Article 13 Subcontracts These contracts do not cover the implementation of action tasks, but they are necessary to implement action tasks by beneficiaries. Subcontracts concern the implementation of action tasks; they imply the implementation of specific tasks which are part of the action and are described in Annex 1. Do not have to be indicated in Annex 1. Must be indicated in Annex 1. The price for these contracts will be declared as ‘other direct costs’ — column D in Annex 2 — in the financial statement; they will be taken into account for the application of the flat-rate for indirect costs. The price for the subcontracts will be declared as ‘direct costs of subcontracting’ — column B in Annex 2 — in the financial statement; they will not be taken into account for the application of the flat-rate for indirect costs. Example (contracts): Contract for a computer; contract for an audit certificate on the financial statements; contract for the translation of documents; contract for the publication of brochures; contract for the creation of a website that enables action’s beneficiaries to work together (if creating the website is not an action task); contract for organisation of the rooms and catering for a meeting (if the organisation of the meeting is not an action task mentioned as such in Annex 1); contract for hiring IPR consultants/agents. Example (subcontracts): Contract for (parts of) the research or innovation tasks mentioned in Annex 1. The differences between subcontractors (Article 13) and contractors (Article 10) on one side and linked third parties (Article 14) on the other are: Articles 10 & 13 Contracts and subcontracts Article 14 Implementation by linked third parties The beneficiaries have a contractual link with contractors or subcontractors having as their object the purchase goods, works or services or the implementation of specific action tasks. The beneficiaries have a legal link with the linked third parties not limited to the action and not based on a contract for the purchase goods, works or services or the implementation of specific action tasks. The eligible costs are the prices charged to the beneficiary by the contractors or subcontractors (usually containing a profit margin for the contractors or subcontractors but not for the beneficiary). The eligible costs are only the costs of the linked third party, no profit is allowed (neither for the linked third party nor for the beneficiary). The beneficiary must award the contracts and subcontracts on the basis of best value for money (or lowest price) and absence of conflict of interests. The linked third parties have to be affiliates to a beneficiary or must have a legal link (as explained in Article 14) with the beneficiary. Example (implementation by linked third party): Company X and company Y do not control each other, but they are both fully owned by company Z. Company X is beneficiary in the grant and company Y implements some of the action tasks described in Annex 1(Testing and analysis of the resistance of a new component under high temperatures). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 114 The differences between contracts (Article 10) and in-kind contributions against payment (Article 11) are: Article 10 Contracts Article 11 In-kind contributions against payment Contractors act as economic operators selling to the beneficiary goods, works or services that are necessary for the action. Third parties contributing in-kind make available some of their resources to a beneficiary without this being their economic activity (i.e. seconding personnel, contributing equipment, infrastructure or other assets, or other goods and services). The eligible costs are the prices charged to the beneficiary by the contractors or subcontractors (usually containing a profit margin for the contractors or subcontractors but not for the beneficiary). The eligible costs are the amounts that the beneficiary pays to the contributors according to their agreements, within the limit of the third party’s costs (the amounts to be paid to the contributors usually exclude a profit margin but if they do, the profit margin is not eligible). Example (in-kind contribution against payment): Civil servant working as a professor in a public university. His salary is paid by the Government (the Ministry) which employs him. According to the secondment agreement, the beneficiary (the university) has to reimburse the Government an amount corresponding to the paid salary. The reimbursed amount is a cost for the beneficiary and is recorded as such in its accounts. The beneficiary will declare the amount reimbursed to the Government in its financial statements. Example (in-kind contribution free of charge): Civil servant working as a professor in a public university. His salary is paid not by the beneficiary (the university) but by the Government (the Ministry). According to the secondment agreement, the Government does not ask any reimbursement in exchange (non-cash donation). The beneficiary will declare these salary costs in its financial statements, even if they are paid by a third party (the Ministry/Government). Specific cases (third parties involved in the action): Authorisation to administer — Coordinators that are secondary or higher education establishments and public bodies may exceptionally delegate the administration of the payments to another legal entity (third party), in most cases a foundation. The third party must fulfil the following conditions:  it must have been granted an ‘authorisation to administer’ by the coordinator AND  it must be affiliated, controlled or set up by the coordinator in order to handle its administrative affairs, including receiving and administering EU funds. In this case, the bank account number to be provided under Article 21.8 must be that of the entity and the payments will be transferred directly to it. The entity must therefore be registered in the Beneficiary Register and validated by the Commission/Agency. It will get its own PIC — although it is not a beneficiary. The costs of the entity may be declared by the coordinator as in-kind contributions (free of charge or against payment; see Articles 6, 11 and 12). Coordination and administration tasks are considered action tasks. Coordinators using a third party with authorisation to administer remain fully responsible for it under the GA. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 115 Summary table of third parties: H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 116 ARTICLE 9 — IMPLEMENTATION OF ACTION TASKS BY BENEFICIARIES NOT RECEIVING EU FUNDING ARTICLE 9 — IMPLEMENTATION OF ACTION TASKS BY BENEFICIARIES NOT RECEIVING EU FUNDING [OPTION for beneficiaries not receiving EU funding: 9.1 Rules for the implementation of action tasks by beneficiaries not receiving EU funding Beneficiaries not receiving EU funding must implement the action tasks attributed to them in Annex 1 according to Article 7.1. Their costs are estimated in Annex 2 but: - will not be reimbursed and - will not be taken into account for the calculation of the grant (see Articles 5.2, 5.3 and 5.4, and 21). [OPTION 1, to be used if the beneficiary not receiving EU funding IS NOT the coordinator and does not have linked third parties receiving EU funding: Chapter 3, Articles 10 to 15, 18.1.2, 20.3(b), 20.4(b), 20.6, 21, 23a, 26.4, 27.2, 28.1 [OPTION: (with the exception of additional exploitation obligations)], 28.2, 30.3, 31.5, 40, 42, 43, 44, 47 and 48 do not apply to [OPTION by default: these beneficiaries][OPTION if more than one of the three options apply to the grant: [insert short name of the beneficiary]]. [They][The beneficiary] will not be subject to financial checks, reviews and audits under Article 22.] [OPTION 2, to be used if the beneficiary/coordinator not receiving EU funding has linked third parties receiving EU funding: Chapter 3, Articles 10 to 15, 20.6, 23a and 40 do not apply to [OPTION by default: these beneficiaries][OPTION if more than one of the three options apply to the grant: [insert short name of the beneficiary]]. Articles 26.4, 27.2, 28.1 [OPTION: (with the exception of additional exploitation obligations)], 28.2, 30.3, 31.5 do not apply to results generated without EU funds. [These beneficiaries][The beneficiary] will not be subject to financial checks, reviews and audits under Article 22 for [their][its] own costs.] [OPTION 3, to be used if the beneficiary not receiving EU funding IS the coordinator and does not have linked third parties receiving EU funding: Chapter 3, Articles 10 to 15, 18.1.2, 20.6, 23a, 26.4, 27.2, 28.1 [OPTION: (with the exception of additional exploitation obligations)], 28.2, 30.3, 31.5 and 40 do not apply to [OPTION by default: these beneficiaries][OPTION if more than one of the three options apply to the grant: [insert short name of the beneficiary]]. [They][The beneficiary] will not be subject to financial checks, reviews and audits under Article 22 for [their][its] own costs.] Beneficiaries not receiving EU funding may provide in-kind contributions to another beneficiary. In this case, they will be considered as a third party for the purpose of Articles 11 and 12. 9.2 Consequences of non-compliance If a beneficiary not receiving EU funding breaches any of its obligations under this Article, its participation of the Agreement may be terminated (see Article 50). Such breaches may also lead to any of the other measures described in Chapter 6 that are applicable to it.] [OPTION: Not applicable] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 117 1. Beneficiaries not receiving EU funding This optional Article will be inserted into the GA if the action is implemented with beneficiaries that do not receive EU funding. These beneficiaries are considered ‘beneficiaries’ (although they do not receive EU funding) and therefore must carry out the work under the action and comply with most of the obligations under the GA. However, some obligations will not apply. ‘Beneficiaries not receiving EU funding’ are usually third country participants (i.e. participants that are neither from an EU Member State nor from a H2020 associated country34) that:  are not from a country listed in General Annex A to the Main Work Programme and  were not granted exceptional EU funding by the Commission/Agency (during the selection procedure Their tasks will appear in Annex 1 and their estimated costs (although not eligible) in Annex 2. Although they participate in the action, NOT all of the obligations under the GA apply to them. (Which obligations apply or do not apply depends on the role of the beneficiary in the grant and if it has or not linked third parties that receive EU funding). 34 For the definition, see Article 2.1(3) Rules for Participation: ‘associated country’ means a third country which is party to an international agreement with the Union, as identified in Article 7 of Regulation (EU) No 1291/2013. For more information on third country participants, see the Online Manual. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 118 This table summarises the obligations of the General MGA that do not apply to beneficiaries not receiving EU funding (under each option). Beneficiary A r t i c l e s 5 , 6 — G r a n t a m o u n t , f o r m o f g r a n t , r e i m b u r s e m e n t r a t e s a n d f o r m s o f c o s t s A r t i c l e s 1 0 t o 1 5 — P u r c h a s e s , s u b c o n t r a c t i n g , i n - k i n d c o n t r i b u t i o n s , e t c A r t i c l e 1 8 . 1 . 2 — K e e p i n g r e c o r d s f o r c o s t s A r t i c l e 2 0 . 3 . ( b ) a n d A r t i c l e 2 0 . 4 . ( b ) — F i n a n c i a l r e p o r t s A r t i c l e 2 0 . 6 — C u r r e n c y f o r f i n a n c i a l s t a t e m e n t s A r t i c l e 2 1 — P a y m e n t s A r t i c l e 2 2 — F i n a n c i a l c h e c k s , r e v i e w s a n d a u d i t s A r t i c l e 2 3 a — M a n a g e m e n t o f I P A r t i c l e 2 6 . 4 a n d A r t i c l e 2 7 . 2 — E U o w n e r s h i p t o p r o t e c t r e s u l t s A r t i c l e 2 8 . 1 — O b l i g a t i o n t o e x p l o i t r e s u l t s * A r t i c l e 2 8 . 2 — R e s u l t s c o n t r i b u t i n g t o s t a n d a r d s A r t i c l e 3 0 . 3 — E U / A g e n c y r i g h t t o o b j e c t t o t r a n s f e r s o r l i c e n s i n g A r t i c l e 3 1 . 5 — A c c e s s r i g h t s f o r E U a n d M S A r t i c l e 4 0 — A s s i g n m e n t o f c l a i m s A r t i c l e 4 2 t o 4 4 — R e j e c t i o n o f c o s t s , r e d u c t i o n , r e c o v e r y A r t i c l e s 4 7 a n d 4 8 — S u s p e n s i o n o f p a y m e n t s Option 1 — IS NOT coordinator and does not have third parties receiving EU funding X X X X X X X X X X X X X X X X Option 2 — HAS linked third parties receiving EU funding X X X Do not apply for the own costs of the beneficiary X X Optio — IS oo dinator and does NOT have linked third parties receiving EU funding X X X X Do not apply for the own costs of the beneficiary X X X X X X X * with the possible exception of additional exploitation obligations, which is a suboption to be activated where applicable Do not apply only for results generated without EU funds Apart from this, they are treated like the other beneficiaries. The other obligations apply, just like for normal beneficiaries (e.g. provide requested information and allow technical checks, reviews, audits, investigations or evaluations of the action’s impact; maintain confidentiality; comply with security-related obligations; promote the action and give visibility to the EU funding). In case of breach of any of their obligations, their participation may be terminated and any of the other measures of Chapter 6 (except for rejection of costs or recovery) may be applied. Example: A beneficiary not receiving EU funding does not carry out the tasks attributed to it in Annex 1. At the end of the action, only part of the action is implemented  the Commission may, at the payment of the balance, if the action tasks were not properly implemented, reduce the grant awarded in accordance with Article 43. In addition, the beneficiary has breached fundamental ethical principles  it may be excluded from all contracts or grants financed by the EU or Euratom for a maximum period of five years (see Article 45). Best practice: The Commission/Agency will assess the consequences of breach of obligations or improper implementation by beneficiaries not receiving EU funding at action level (not at beneficiary level). Therefore, beneficiaries are advised to foresee this situation — before signature of the GA — in the consortium agreement. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 119 ARTICLE 10 — PURCHASE OF GOODS, WORKS OR SERVICES 1. Purchase of goods, works or services If necessary to implement the action, the beneficiaries may purchase goods, works or services. For the purposes of the GA, ‘purchase contract’ means ordinary contract for services, works (i.e. buildings) or goods (e.g. equipment), needed to carry out the action, including the purchase of consumables and supplies. Example (contracts): Contract for a computer; contract for an audit certificate on the financial statements; contract for the translation of documents; contract for the publication of brochures; contract for the creation of a website that enables an action’s beneficiaries to work together (if creating the website is not an action task); contract for logistic support (e.g. organisation of the rooms, catering) for organising a meeting (if this is not an action tasks described as such in Annex 1); contract for hiring IPR consultants/agents. The differences between purchase contracts, subcontracts, in-kind contributions against payment and implementation by linked third parties are explained in Article 8. . ARTICLE 10 — PURCHASE OF GOODS, WORKS OR SERVICES 10.1 Rules for purchasing goods, works or services 10.1.1 If necessary to implement the action, the beneficiaries may purchase goods, works or services. The beneficiaries must make such purchases ensuring the best value for money or, if appropriate, the lowest price. In doing so, they must avoid any conflict of interests (see Article 35). [OPTION: In addition, if the value of the purchase exceeds EUR […], the beneficiaries must comply with the following rules: […] 23 ] The beneficiaries must ensure that [the Agency,] the Commission, the European Court of Auditors (ECA) and the European Anti-Fraud Office (OLAF) can exercise their rights under Articles 22 and 23 also towards their contractors. 10.1.2 Beneficiaries that are ‘contracting authorities’ within the meaning of Directive 2004/18/EC 24 or ‘contracting entities’ within the meaning of Directive 2004/17/EC 25 must comply with the applicable national law on public procurement. 10.2 Consequences of non-compliance If a beneficiary breaches any of its obligations under Article 10.1.1, the costs related to the contract concerned will be ineligible (see Article 6) and will be rejected (see Article 42). If a beneficiary breaches any of its obligations under Article 10.1.2, the grant may be reduced (see Article 43). Such breaches may also lead to any of the other measures described in Chapter 6. 23 If the authorising officer decides to set specific rules, they should have due regard for the principle of proportionality, taking into account the value of the contracts and the relative size of the EU contribution in relation to the total cost of the action and the risk. Specific rules must be based on the rules contained in the Financial Regulation. Simply citing the FR without specifying the applicable provisions should be avoided. Specific rules may only be set for the award of contracts of a value higher than EUR 60 000. The authorising officer may set a threshold higher than EUR 60 000 on the basis of a risk assessment. 24 Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public work contracts, public supply contracts and public service contracts (OJ L 134, 30.04.2004, p. 114). 25 Directive 2004/17/EC of the European Parliament and of the Council of 31 March 2004 coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors (OJ L 134, 30.04.2004, p. 1). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 120 Characteristics of purchase contracts:  They are usually limited in cost and scope. 2. Additional eligibility condition: Best value for money or lowest price The beneficiaries must base their purchases on the ‘best value for money’ considering the quality of the service, good or works proposed (also called ‘best price-quality ratio’) or on the lowest price. This requirement is the mere application of the general cost eligibility condition set out in Article 6.1(a)(vii) (i.e. that costs must be reasonable and comply with the principle of sound financial management) to the costs of the purchase of goods, works or services. The best value for money principle does not require competitive selection procedures in all cases. (However, where a beneficiary did not request several offers, it must demonstrate how best value for money was nevertheless ensured.) For the best price-quality ratio, price is an essential aspect (together with quality criteria, such as technical quality, running costs, delivery times, after-sales service and technical assistance, etc.), but it is not automatically necessary to select the offer with the lowest price. (Selecting the lowest price may however be appropriate for automatic award procedures where the contract is awarded to the company that meets the conditions and quotes the lowest price.) Example: electronic tendering for consumables In order to provide a good analysis of the price-quality ratio, the criteria defining ‘quality’ must be clear and coherent with the purpose of the purchase. Occasionally (and only for contracts with a value higher than EUR 60 000) the Commission/Agency may set out additional conditions (in view of the possible financial risks, taking into account the size of the contract and the EU contribution). These conditions must be described in the work programme/call — as special eligibility conditions for the purchase costs — and be based on the rules applied by the Commission for its own procurement contracts. Examples (additional conditions): minimum number of offers received; publication in the Official Journal or in specific media such as internet, national newspapers, etc. 3. Additional eligibility condition: Controls on the contractor (by the Commission/Agency, ECA and OLAF) — Evaluation of the impact of the action The beneficiaries must ensure that the Commission/Agency, the European Court of Auditors (ECA) and the European Anti-Fraud Office (OLAF) have the right to carry out checks, reviews, audits and investigations on the contractor (see Article 22). They must also ensure that the Commission/Agency has the right to make an evaluation of the impact of the action under Article 23. It is the beneficiaries’ responsibility to ensure that these obligations are accepted by the contractor (for example, if they refuse access and the Commission/Agency cannot verify the eligibility of the costs, it will reject them). Article 10 contains both additional cost eligibility conditions (in Article 10.1.1) and ‘other obligations’ (in Article 10.1.2). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 121 4. ‘Other obligation’: Compliance with national procurement rules Beneficiaries that are ‘contracting authorities’ or ‘contracting entities’ (within the meaning of the EU public procurement Directives 2004/18/EC35 and 2004/17/EC36,37 — or any EU legislation that replaces these Directives38) must moreover comply with the applicable national law on public procurement. These rules normally provide for special procurement procedures, for the types of contracts they cover. ‘Contracting authority’ means the State, regional or local authorities, bodies governed by public law, associations formed by one or several of such authorities or one or several of such bodies governed by public law (see Article 1(9) of Directive 2004/18/EC). ‘Bodies governed by public law’ also include entities financed mostly by the State, regional or local authorities, or other bodies governed by public law and entities controlled by those bodies (for the full definition, see Article 1(9) of that Directive). ‘Contracting entities’ means entities operating in a utilities sector (water, energy, transport, postal services). They may be contracting authorities, public undertakings or entities operating on the basis of special or exclusive rights (for the full definition, see Article 2 of Directive 2004/17/EC). Specific cases (purchases): Framework contracts or subcontracts — Framework contracts can be used for selecting a provider if this is the usual practice of the beneficiary (e.g. for a type of goods). In order to be eligible, the framework contract must (have) be(en) awarded on the basis of best-value-for-money and absence of conflict of interest. The framework contract does not necessarily have to be concluded before the start of the action. 35 Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public work contracts, public supply contracts and public service contracts (OJ L 134, 30.4.2004, p. 114). 36 Directive 2004/17/EC of the European Parliament and of the Council of 31 March 2004 coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors (OJ L 134, 30.4.2004, p. 1). 37 Directive 2009/81/EC uses the definitions of Directives 2004/17/EC and 2004/18/EC (see Article 1(17) of Directive 2009/81/EC). 38 See Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement (OJ L 94, 28.3.2014, p. 65) and Directive 2014/25/EU of the European Parliament and of the Council of 26 February 2014 on public procurement by entities operating in the water, energy, transport and postal services sectors (OJ L 94, 28.3.2014, p. 243). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 122 ARTICLE 11 — USE OF IN-KIND CONTRIBUTIONS PROVIDED BY THIRD PARTIES AGAINST PAYMENT 1. In-kind contributions against payment If necessary to implement the action, the beneficiaries may use in-kind contributions provided by third parties against payment. A ‘third party’ can be any legal entity that has not signed the GA (see Article 1). This Article refers to ‘in-kind contributions’ (i.e. non-financial resources of third parties put at the beneficiaries’ disposal) that beneficiaries receive against payment. In this case, the beneficiary makes a payment and therefore incurs a cost. Example: medical equipment provided by a hospital to a university in order to carry out research Both this Article and Article 12 only refer to in-kind contributions; they do NOT concern the case of linked third parties carrying out part of the action tasks described in Annex 1 (see Article 14). Article 11 contains additional cost eligibility conditions. . ARTICLE 11 — USE OF IN-KIND CONTRIBUTIONS PROVIDED BY THIRD PARTIES AGAINST PAYMENT 11.1 Rules for the use of in-kind contributions against payment If necessary to implement the action, the beneficiaries may use in-kind contributions provided by third parties against payment. The beneficiaries may declare costs related to the payment of in-kind contributions as eligible (see Article 6.1 and 6.2), up to the third parties’ costs for the seconded persons, contributed equipment, infrastructure or other assets or other contributed goods and services. The third parties and their contributions must be set out in Annex 1. The [Commission][Agency] may however approve in-kind contributions not set out in Annex 1 without amendment (see Article 55), if: - they are specifically justified in the periodic technical report and - their use does not entail changes to the Agreement which would call into question the decision awarding the grant or breach the principle of equal treatment of applicants. The beneficiaries must ensure that [the Agency,] the Commission, the European Court of Auditors (ECA) and the European Anti-Fraud Office (OLAF) can exercise their rights under Articles 22 and 23 also towards the third parties. 11.2 Consequences of non-compliance If a beneficiary breaches any of its obligations under this Article, the costs related to the payment of the in- kind contribution will be ineligible (see Article 6) and will be rejected (see Article 42). Such breaches may also lead to any of the other measures described in Chapter 6. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 123 2. Additional eligibility condition: Costs of the payment to the third party, up to the third parties’ costs The beneficiaries may declare their costs for paying the in-kind contribution (e.g. the invoice from the third party), but only up to the costs actually incurred by the third party — if the other eligibility conditions are fulfilled (see in particular Article 6.1 and 6.2; e.g. necessary for the action, recorded in the accounts of the beneficiary, etc.). For the upper limit (third party’s actual costs), normally only the direct costs are taken into account. These direct costs may not be based on unit costs39 or lump sums (i.e. they must be identifiable and verifiable in the accounts of the third party). Thus, the beneficiary cannot, for instance, use the unit costs for SME owners or natural persons who do not receive a salary. When calculating the actual costs incurred by the third party, indirect costs of the third party are:  either not taken into account if the resources (in-kind contribution) are used in the premises of the beneficiary; or  taken into account by using the 25% flat-rate if the in-kind contributions are used in the third party’s premises. In this case, the direct costs actually incurred by the third party may be increased by a flat-rate of 25% on those costs. Example (no indirect costs of the third party accepted): A researcher is seconded to a beneficiary by a legal entity. This researcher works for the beneficiary on its premises. The third party charges the researcher’s direct costs (salary and related social security charges of EUR 50 000) and is reimbursed by the beneficiary. Additionally, the beneficiary has eligible direct costs of EUR 200 000. The third party’s direct costs equal EUR 50 000. Total eligible costs declared by the beneficiary are: - total eligible direct costs: EUR 200 000 (direct costs of beneficiary) + EUR 50 000 ( up to the amount of third party’s direct costs) = EUR 250 000 - eligible indirect costs; 25%* EUR 250 000 = EUR 62 500. No work was subcontracted, and no financial support by third parties was given. TOTAL eligible costs declared by the beneficiary: EUR 250 000 + EUR 62 500 = EUR 312 500 Example (direct costs of third party plus a 25% flat-rate for indirect costs): A legal entity makes available to a beneficiary the use of an installation or specialised piece of infrastructure that the beneficiary needs for the action. The third party charges the full direct and indirect costs of this and is reimbursed by the beneficiary. The costs of the third party equal EUR 20 000 of actual direct costs plus EUR 8 000 of actual indirect costs. This is a cost for the beneficiary, which may declare it for the action. However, since in H2020 actions indirect costs are reimbursed on the basis of a flat-rate of 25% of the direct eligible costs (calculated as indicated in Article 6.2.E of the GA), the beneficiary will declare as eligible costs for in-kind contributions against payment only EUR 20 000 (payment of third party’s direct costs) + EUR 5 000 for (cap for payment of third party’s indirect costs) (flat-rate of 25% of 20 000) = EUR 25 000. Additionally, the beneficiary has got eligible direct costs of EUR 200 000. Total eligible costs declared by the beneficiary are: - total eligible direct costs: EUR 200 000 (direct costs of the beneficiary)+ EUR 25 000 (eligible costs of in-kind contributions against payment) = EUR 225 000 - eligible indirect costs: EUR 50 000= 25%* EUR 200 000 (direct costs of the beneficiary, excluding costs of in-kind contributions not used in its premises). No work was subcontracted, and no financial support by third parties was given. TOTAL eligible costs declared by the beneficiary: EUR 225 000 + EUR 50 000 = EUR 275 000. If an audit shows that the costs declared by the beneficiary are higher than those actually incurred by the third party, the difference will be rejected as ineligible (even if they correspond to the amount actually paid by the beneficiary). 39 With the exception of unit costs for conducting clinical studies, for which specific provisions apply (see ‘Specific cost category – costs for clinical studies’ under Article 6.2.F) H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 124 3. Additional eligibility condition: Third parties and their contributions be set out in Annex 1 — Simplified approval procedure The third parties, their in-kind contributions (i.e. non-financial resources) and an estimation of the costs budgeted for the in-kind contributions must be set out in Annex 1 to the GA. New in-kind contributions — If the need for third parties’ in-kind contributions was not known at the moment of the signature of the GA, the coordinator must request an amendment of the GA in order to introduce it in the Annex 1. Exceptionally, the Commission/Agency may approve costs related to in-kind contributions not included in Annex 1 without formally amending the GA ((‘simplified approval procedure’). Example: A new researcher brought into a team working for a H2020 action during the action’s second year of implementation. The beneficiary fails to inform the coordinator of the fact that this researcher is seconded from a public research centre to the beneficiary (a university), and therefore the GA is not amended (to include this in Annex 1). These circumstances are explained and justified in the technical report which includes the work carried out by this researcher. Approval will NOT be granted if the in-kind contribution risks to substantially change the nature of the project (i.e. there is doubt whether the project is still (in substance) the same as the one that was selected or whether the beneficiary has still the operational capacity to carry out the action). Example (no approval): A proposal includes a beneficiary owning a prestigious laboratory and employing a specialised team of technicians in the field of the call. The proposal is selected after evaluation, taking into account the value provided by the involvement of this laboratory in the action. The GA is signed, but then the beneficiary decides to carry out the tests in another laboratory of a third party, without informing the Commission and amending the GA. 4. Additional eligibility condition: Controls on the third parties (by the Commission/Agency, ECA and OLAF) — Evaluation of the impact of the action The beneficiaries must ensure that the Commission/Agency, the European Court of Auditors (ECA) and the European Anti-Fraud Office (OLAF) have the right to carry out checks, reviews, audits, and investigations on the third parties (see Article 22), and in particular audit their underlying costs. They must also ensure that the Commission/Agency has the right to make an evaluation of the impact of the action under Article 23. It is the beneficiaries’ responsibility to ensure that these obligations are accepted by the third parties (for example, if they refuse access and the Commission/Agency cannot verify the eligibility of the costs, it will reject them). The approval is at the discretion of the Commission/Agency and there is no automatic entitlement to it. Beneficiaries that rely on the ‘simplified approval procedure’ bear the full risk of non-approval and rejection of costs by the Commission/Agency. . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 125 ARTICLE 12 — USE OF IN-KIND CONTRIBUTIONS PROVIDED BY THIRD PARTIES FREE OF CHARGE 1. In-kind contributions free of charge If necessary to implement the action, the beneficiaries may use in-kind contributions provided by third parties free of charge. This Article refers to the case where a third party makes available some of its resources to a beneficiary, for free (i.e. without any payment, contrary to the case covered by Article 11). In this case, the beneficiary makes no payment and there is therefore NO cost incurred by the beneficiary. Examples (in-kind contributions provided by third parties free of charge): Civil servant working as a professor in a public university. His salary is paid not by the beneficiary (the university) but by the Government (the Ministry). The beneficiary will declare these salary costs in its individual financial statements, even if they are paid by a third party (the Ministry/Government). Foundations, spin-off companies, etc., created in order to handle the administrative/financial tasks of the beneficiary. This is typically the case of a legal entity created or controlled by a beneficiary (usually public bodies like Universities/Ministries) which is in charge of the financial administration of the beneficiary, but which does not perform scientific/technical work in the action. This third party handles the financial and administrative aspects of the beneficiaries’ involvement in RTD actions — including issues related to employment and payment of personnel, purchase of equipment, consumables, etc. — with the aim in most cases to improve and rationalise the administrative and financial management of these public bodies. ARTICLE 12 — USE OF IN-KIND CONTRIBUTIONS PROVIDED BY THIRD PARTIES FREE OF CHARGE 12.1 Rules for the use of in-kind contributions free of charge If necessary to implement the action, the beneficiaries may use in-kind contributions provided by third parties free of charge. The beneficiaries may declare costs incurred by the third parties for the seconded persons, contributed equipment, infrastructure or other assets or other contributed goods and services as eligible in accordance with Article 6.4. The third parties and their contributions must be set out in Annex 1. The [Commission][Agency] may however approve in-kind contributions not set out in Annex 1 without amendment (see Article 55), if: - they are specifically justified in the periodic technical report and - their use does not entail changes to the Agreement which would call into question the decision awarding the grant or breach the principle of equal treatment of applicants. The beneficiaries must ensure that [the Agency,] the Commission, the European Court of Auditors (ECA) and the European Anti-Fraud Office (OLAF) can exercise their rights under Articles 22 and 23 also towards the third parties. 12.2 Consequences of non-compliance If a beneficiary breaches any of its obligations under this Article, the costs incurred by the third parties related to the in-kind contribution will be ineligible (see Article 6) and will be rejected (see Article 42). Such breaches may also lead to any of the other measures described in Chapter 6. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 126 2. Additional eligibility condition: Costs of the third party The beneficiaries may declare the costs of the third party for the in-kind contribution, if the eligibility conditions set out in Article 12.1 and in Article 6.4 are fulfilled (e.g. actually incurred by the third party, necessary for the action, incurred during the action duration, etc.). The costs must be recorded in the accounts of the third party. Normally, only the direct costs of the third party may be declared. These direct costs may not be based on unit costs40 or lump sums (e.g. they must be identifiable and verifiable in the accounts of the third party). Thus, the beneficiary cannot, for instance, use the unit costs for SME owners or natural persons who do not receive a salary. When calculating the actual costs incurred by the third party, indirect costs of the third party are:  either not taken into account if the resources (in-kind contribution) are used in the premises of the beneficiary; or  taken into account by using the 25% flat-rate if the in-kind contributions are used in the third party’s premises. In this case, the direct costs actually incurred by the third party may be increased by a flat-rate of 25% on those costs. If the indirect costs are claimed in this way, the beneficiary may not include them a second time to calculate its own indirect costs. Free of charge in-kind contributions may also have to be declared as receipts (see Article 5.3.3(c)) — capped by the amount declared as third party costs for the contribution. If an audit shows that the direct costs declared by the beneficiary are higher than those incurred by the third party, the difference will be rejected as ineligible. 3. Additional eligibility condition: Third parties and their contributions set out in Annex 1 — Simplified approval procedure The third parties, their in-kind contributions and an estimation of the costs budgeted for the in-kind contributions must be mentioned in Annex 1 to the GA. New in-kind contributions — If the need for third parties’ in-kind contributions was not known at the moment of the signature of the GA, the coordinator must request an amendment of the GA in order to introduce it in the Annex 1. Exceptionally, the Commission/Agency may approve costs related to in-kind contributions not included in Annex 1 without formally amending the GA (‘simplified approval procedure’; see Article 11). 4. Additional eligibility condition: Controls on the third parties (by the Commission/Agency, ECA and OLAF) — Evaluation of the impact of the action 40 With the exception of unit costs for conducting clinical studies, for which specific provisions apply (see ‘Specific cost category – costs for clinical studies’ under Article 6.2.F) Article 12 contains additional cost eligibility conditions. . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 127 The beneficiaries must ensure that the Commission/Agency, the European Court of Auditors (ECA) and the European Anti-Fraud Office (OLAF) have the right to carry out checks, reviews, audits and investigations on the third parties (see Article 22), and in particular to audit their costs. They must also ensure that the Commission/Agency has the right to make an evaluation of the impact of the action under Article 23. It is the beneficiaries’ responsibility to ensure that these obligations are accepted by the third parties (for example, if they refuse access and the Commission/Agency cannot verify the eligibility of the costs, it will reject them). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 128 ARTICLE 13 — IMPLEMENTATION OF ACTION TASKS BY SUBCONTRACTORS ARTICLE 13 — IMPLEMENTATION OF ACTION TASKS BY SUBCONTRACTORS 13.1 Rules for subcontracting action tasks 13.1.1 If necessary to implement the action, the beneficiaries may award subcontracts covering the implementation of certain action tasks described in Annex 1. Subcontracting may cover only a limited part of the action. The beneficiaries must award the subcontracts ensuring the best value for money or, if appropriate, the lowest price. In doing so, they must avoid any conflict of interests (see Article 35). [OPTION: In addition, if the value of the subcontract to be awarded exceeds EUR […], the beneficiaries must comply with the following rules: […]. 26 ] [OPTION for actions involving PCP or PPI: In addition, for the pre-commercial procurement (PCP) or procurement of innovative solutions (PPI), the beneficiaries must follow a transparent and non- discriminatory procedure, including at least the following: (i) an ‘open market consultation’ published in the Official Journal of the European Union via a ‘prior information notice (PIN)’ and promoted and advertised widely; (ii) a ‘contract notice’ allowing for a time-limit for receipt of tenders of at least 2 months, published in the Official Journal of the European Union and promoted and advertised widely; (iii) a ‘request for tenders’ based on functional or performance-based specifications (that take into account the outcome of the open market consultation) and describing the practical set-up for the implementation of the subcontract(s); (iv) an objective and non-discriminatory evaluation of the tenders and award of subcontract(s) to the tender(s) offering best value for money; (v) a ‘contract award notice’ published in the Official Journal of the European Union. The beneficiaries must also ensure that every prior information notice, contract notice or contract award notice published in relation to the subcontracting includes the following disclaimer: “This procurement receives funding under the European Union’s Horizon 2020 research and innovation programme under the grant agreement No [number]). The EU is however not participating as a contracting authority in this procurement.”] [OPTION only for actions involving PPI: Participation in PPI tendering procedures must be open on equal terms to tenderers from EU Member States, associated countries and other countries with which the EU has an agreement in the field of public procurement. If the WTO Government Procurement Agreement applies, PPI subcontracts must also be open to tenderers from States that have ratified this agreement. If the procurement of the innovative solution (PPI) consists (and is limited to) buying a set of prototypes and/or test products that were developed during a preceding PCP Cofund action, the beneficiaries do not need to make an open market consultation, contract notice and contract award notice under Points (a), (b) and (e) above. In this case, they must make a request for tenders from at least three providers (including the providers that participated in the preceding PCP), in accordance with the negotiated procedure without publication under Directives 2004/18/EC and 2004/17/EC 27 .] [OPTION only for actions involving PCP: The subcontracts for pre-commercial procurement must provide for the following: - the ownership, by the subcontractors, of the intellectual property rights on the results that they generate; H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 129 - the right of the buyers to access results — on a royalty-free basis — for their own use; - the right of the buyers to grant (or to require the subcontractors to grant) non-exclusive licences to third parties to exploit the results — under fair and reasonable conditions — (without the right to sub-licence); - the obligation of the subcontractors to transfer to the buyers the ownership of intellectual property generated by subcontractors during the PCP, if subcontractors fail to commercially exploit the results within the period set out in the subcontract; - the right of the buyers to publish — at the time of the contract award notice — the identity of the winning tenderers and a project summary provided by the winning tenderers, and to publish — after R&D has finished and after consulting the subcontractors — summaries of the results as well as the identities of the subcontractors that successfully completed the last phase of the PCP. The beneficiaries must ensure that the majority of the research and development work done by the subcontractor(s) (including the work of the main researchers) is located in the EU Member States or associated countries (‘place of performance obligation’).] The tasks to be implemented and the estimated cost for each subcontract must be set out in Annex 1 and the total estimated costs of subcontracting per beneficiary must be set out in Annex 2. The [Commission][Agency] may however approve subcontracts not set out in Annex 1 and 2 without amendment (see Article 55), if: - they are specifically justified in the periodic technical report and - they do not entail changes to the Agreement which would call into question the decision awarding the grant or breach the principle of equal treatment of applicants. [OPTION for classified results: Classified results may be subcontracted only after explicit approval (in writing) from the [Commission][Agency] (see Article 37).] The beneficiaries must ensure that [the Agency,] the Commission, the European Court of Auditors (ECA) and the European Anti-Fraud Office (OLAF) can exercise their rights under Articles 22 and 23 also towards their subcontractors. 13.1.2 The beneficiaries must ensure that their obligations under Articles 35, 36, 38 and 46 also apply to the subcontractors. Beneficiaries that are ‘contracting authorities’ within the meaning of Directive 2004/18/EC or ‘contracting entities’ within the meaning of Directive 2004/17/EC must comply with the applicable national law on public procurement. 13.2 Consequences of non-compliance If a beneficiary breaches any of its obligations under Article 13.1.1, the costs related to the subcontract concerned will be ineligible (see Article 6) and will be rejected (see Article 42). If a beneficiary breaches any of its obligations under Article 13.1.2, the grant may be reduced (see Article 43). Such breaches may also lead to any of the other measures described in Chapter 6. 26 If the authorising officer decides to set specific rules, they should have due regard for the principle of proportionality, taking into account the value of the contracts and the relative size of the EU contributions in relation to the total cost of the action and the risk. Specific rules must be based on the rules contained in the Financial Regulation. Simply citing the FR without specifying the applicable provisions should be avoided. Specific rules may only be set for the award of contracts of a value higher than EUR 60 000. The authorising officer may set a threshold higher than EUR 60 000 on the basis of a risk assessment. 27 See Articles 28 and 31(2)(a) of Directive 2004/18 and Article 40(3)(b) of Directive 2004/17/EC H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 130 1. Subcontracting If necessary to implement the action, the beneficiaries may award subcontracts covering the implementation of certain action tasks described in Annex 1. Characteristics of subcontracting:  Based on ‘business conditions’ This means that the subcontractor charges a price, which usually includes a profit (— this distinguishes it from ‘linked third parties’; see Article 14).  Subcontractor works without the direct supervision of the beneficiary and is not hierarchically subordinate to the beneficiary (— this distinguishes it from action tasks implemented by in-house consultants; see Article 6.2.A.2)  Subcontractor's motivation is pecuniary, not the research work itself. The subcontractor is paid by the beneficiary in exchange for its work  Responsibility towards the EU/Euratom for the subcontracted work lies fully with the beneficiary The beneficiary remains responsible for all its rights and obligations under the GA, including the tasks carried out by a subcontractor. Subcontracts should in particular foresee that intellectual property generated by a subcontractor reverts to the beneficiary (so that it can meet its obligations towards the other beneficiaries in the GA and respect the other obligations of the GA).  Subcontractor has no rights or obligations towards the Commission/Agency or the other beneficiaries (it has no contractual relation with them). Examples (subcontracts): Testing and analysis of the resistance of a new component under high temperatures, if described in Annex 1 as action task. Only limited parts of the action may be subcontracted — except for actions involving PCP/PPI (because the PCP/PPI action tasks are by definition fully subcontracted). Stricter rules apply to information that is ‘EU-classified’ or subject to a ‘security recommendation’ in Annex 1 of the GA (see Article 37). Article 13 contains both additional cost eligibility conditions (in Article 13.1.1) and ‘other obligations’ (in Article 13.1.2). . For the purposes of the GA, a ‘subcontract’ means the purchase of goods, works or services that are identified in Annex 1 as action tasks. Example (subcontracts): Contracts for (parts of) the research or innovation tasks mentioned in Annex 1. The differences between purchase contracts, subcontracts, in-kind contributions against payment and implementation by linked third parties are explained in Article 8. . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 131 2. Additional eligibility condition: Best value for money or lowest price The beneficiaries must base their subcontracts on the ‘best value for money’ considering the quality of the service proposed (also called ‘best price-quality ratio’) or on the lowest price. This requirement is the mere application of the general cost eligibility condition set out in Article 6.1(a)(vii) (i..e. that costs must be reasonable and comply with the principle of sound financial management) to the costs of the purchase of goods, works or services. The best value for money principle does not require competitive selection procedures in all cases. (However, if a beneficiary did not request several offers, it must demonstrate how best value for money was ensured.) For the best price-quality ratio, price is an essential aspect (together with quality criteria, such as technical quality, etc.), but it is not automatically necessary to select the offer with the lowest price. (Selecting the lowest price may however be appropriate for automatic award procedures where the subcontract is awarded to the company that meets the conditions and quotes the lowest price.) In order to provide a good analysis of the price-quality ratio, the criteria defining ‘quality’ must be clear and coherent with the purposes of the action task that is subcontracted. 3. Additional eligibility conditions for actions involving PCP or PPI This additional option will be inserted into the GA if the action involves pre-commercial procurement (PCP) or procurement of innovative solutions (PPI). It is important not to confuse a Research and Innovation action, or an Innovation action, involving PCP or PPI with a PCP/PPI Cofund action. For the latter, the main objective of the action is the implementation of a single joint public procurement of research and development (R&D) services (in the case of PCP) or innovative solutions (in the case of PPI). The additional rules mirror the key obligations from the H2020 MGA PCP/PPI Cofund. 4. Additional eligibility condition: Tasks set out in Annex 1 — Total estimated costs of subcontracting set out in Annex 2 — Simplified approval procedure The tasks to be implemented and the estimated cost for each subcontract must be set out in Annex 1. It is the work (i.e. the action tasks) to be performed by a subcontractor that must be identified in Annex 1. The name of the subcontractors is in principle not necessary. The description should also include an estimation of costs for each subcontract. Moreover, it should explain the need for a subcontract, taking into account the specific characteristics of the action. Additionally, the total estimated costs for subcontracting per beneficiary must appear in the table of estimated costs of Annex 2. If the name of the subcontractor is known at the time of the grant signature the beneficiary may indicate it in Annex 1. However, the fact that the name of the subcontractor is indicated in Annex 1 does not imply the approval of the Commission of the specific subcontractor. For example, if the subcontractor was not selected based on best value-for-money the Commission may reject the costs even if its name was indicated in Annex 1. . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 132 New subcontracts — If the need for a subcontract is not foreseen at the moment of the signature of the GA, the coordinator must request an amendment of the GA in order to introduce it in Annex 1 and 2. Exceptionally, the Commission/Agency may approve costs related to subcontracts not included in Annex 1 and 2 without formally amending the GA (‘simplified approval procedure’). The new subcontract must be included and explained in the technical periodic report (in the section ‘unforeseen subcontractor’). Approval will NOT be granted if the subcontract risks to substantially change the nature of the project (i.e. there is a doubt whether the project is still (in substance) the same as the one that was selected or whether the beneficiary has still the operational capacity to carry out the action). Example (approval): A beneficiary loses some personnel specialised in a particular field, and as a result decides to subcontract some tasks it had originally foreseen to carry out itself. The beneficiary fails to inform the coordinator of this fact and therefore the GA is not amended. These circumstances are declared in the periodic report and it is approved by the Commission. Example (no approval): A key beneficiary leaves the consortium and the coordinator subcontracts all the tasks of this beneficiary. 5. Additional eligibility condition: Controls on the subcontractor (by the Commission/Agency, ECA and OLAF) — Evaluation of the impact of the action The beneficiaries must ensure that the Commission/Agency, the European Court of Auditors (ECA) and the European Anti-Fraud Office (OLAF) have the right to carry out checks, reviews, audits and investigations on the subcontractor (see Article 22). They must also ensure that the Commission/Agency has the right to make an evaluation of the impact of the action under Article 23. It is the beneficiaries’ responsibility to ensure that these obligations are accepted by the subcontractor (for example, if they refuse access and the Commission/Agency cannot verify the eligibility of the costs, it will reject them). 6. ‘Other obligation’: Extension of obligations under the GA to subcontractors The beneficiaries must ensure that the subcontractors comply with certain obligations under the GA. Obligations that must be extended to subcontractors:  Avoiding conflicts of interest (see Article 35)  Maintaining confidentiality (see Article 36)  Promoting the action and give visibility to the EU funding (see Article 38)  Liability for damages (see Article 46). Best practice: In order to be able to fulfil this obligation, the beneficiaries should impose contractual arrangements on the third parties. 7. ‘Other obligation’: Compliance with national procurement rules The approval is at the full discretion of the Commission/Agency and there is no automatic entitlement to it. Beneficiaries that rely on the ‘simplified approval procedure’ bear the full risk of non-approval and rejection of costs by the Commission/Agency. . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 133 Beneficiaries that are ‘contracting authorities’ or ‘contracting entities’ (within the meaning of the EU public procurement Directives 2004/18/EC and 2004/17/EC41 — or any EU legislation that replaces these Directives42) must moreover comply with the applicable national law on public procurement. These rules normally provide for a special procurement procedure for the types of contracts they cover. ‘Contracting authority’ means the State, regional or local authorities, bodies governed by public law, associations formed by one or several of such authorities or one or several of such bodies governed by public law (see Article 1(9) of Directive 2004/18/EC). ‘Bodies governed by public law’ also include entities financed mostly by the State, regional or local authorities, or other bodies governed by public law and entities controlled by those bodies (for the full definition, see Article 1(9) of that Directive). ‘Contracting entities’ means entities operating in a utilities sector (water, energy, transport, postal services). They may be contracting authorities, public undertakings or entities operating on the basis of special or exclusive rights (for the full definition see Article 2 of Directive 2004/17/EC). Specific cases (subcontracting): Subcontracting between beneficiaries — Is NOT allowed in the same GA. All beneficiaries contribute to and are interested in the action; if one beneficiary needs the services of another in order to perform its part of the work it is the second beneficiary who should declare the costs for that work. Subcontracting to affiliates — Is NOT allowed, unless they have a framework contract or the affiliate is their usual provider, and the subcontract is priced at market conditions. Otherwise, these affiliates may work in the action, but they must be identified as linked third parties under Article 14 and declare their own costs. Coordination tasks of the coordinator (e.g. distribution of funds, review of reports and others tasks listed under Article 41.2(b)) — Can NOT be subcontracted. Other activities of the coordinator may in principle be subcontracted. Framework contracts or subcontracts — Framework contracts can be used for selecting a provider if this is the usual practice of the beneficiary (e.g. for a type of service). In order to be eligible, the framework contract must (have) be(en) awarded on the basis of best-value-for-money and absence of conflict of interest. The framework contract does not necessarily have to be concluded before the start of the action. 41 Directive 2009/81/EC uses the definitions of Directives 2004/17/EC and 2004/18/EC (see Article 1(17) of Directive 2009/81/EC). 42 See Directives 2014/24/EU and 2014/25/EU. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 134 ARTICLE 14 — IMPLEMENTATION OF ACTION TASKS BY LINKED THIRD PARTIES 1. Linked third parties ARTICLE 14 — IMPLEMENTATION OF ACTION TASKS BY LINKED THIRD PARTIES [OPTION: 14.1 Rules for calling upon linked third parties to implement part of the action 14.1.1 The following affiliated entities 28 and third parties with a legal link to a beneficiary 29 (‘linked third parties’) may implement the action tasks attributed to them in Annex 1: - [name of the entity (short name)], affiliated or linked to [short name of the beneficiary] [OPTION if joint and several liability has been requested:, if it has accepted joint and several liability with the beneficiary (see Annex 3a)] - [name of the entity (short name)], affiliated or linked to [short name of the beneficiary] [OPTION if joint and several liability has been requested:, if it has accepted joint and several liability with the beneficiary (see Annex 3a)] [same for more linked parties] The linked third parties may declare as eligible the costs they incur for implementing the action tasks in accordance with Article 6.3. The beneficiaries must ensure that [the Agency,] the Commission , the European Court of Auditors (ECA) and the European Anti-Fraud Office (OLAF) can exercise their rights under Articles 22 and 23 also towards their linked third parties. 14.1.2 The beneficiaries must ensure that their obligations under Articles 18, 20, 35, 36 and 38 also apply to their linked third parties. 14.2 Consequences of non-compliance If any obligation under Article 14.1.1 is breached, the costs of the linked third party will be ineligible (see Article 6) and will be rejected (see Article 42). If any obligation under Article 14.1.2 is breached, the grant may be reduced (see Article 43). Such breaches may also lead to any of the other measures described in Chapter 6.] [OPTION: Not applicable] 28 For the definition see Article 2.1(2) Rules for Participation Regulation No 1290/2013: ‘affiliated entity’ means any legal entity that is: - under the direct or indirect control of a participant, or - under the same direct or indirect control as the participant, or - directly or indirectly controlling a participant. ‘Control’ may take any of the following forms: (a) the direct or indirect holding of more than 50% of the nominal value of the issued share capital in the legal entity concerned, or of a majority of the voting rights of the shareholders or associates of that entity; (b) the direct or indirect holding, in fact or in law, of decision-making powers in the legal entity concerned. However, the following relationships between legal entities shall not in themselves constitute controlling relationships: (a) the same public investment corporation, institutional investor or venture-capital company has a direct or indirect holding of more than 50% of the nominal value of the issued share capital or a majority of voting rights of the shareholders or associates; (b) the legal entities concerned are owned or supervised by the same public body. 29 ‘Third party with a legal link to a beneficiary’ is any legal entity which has a legal link to the beneficiary implying collaboration that is not limited to the action. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 135 This optional Article (together with the corresponding options in Article 6 and other provisions) will be inserted into the GA if the action is implemented with linked third parties. Characteristics of implementation by linked third parties:  Linked third party does not charge a price, but declares its own costs for implementing the action tasks  Linked third party itself performs certain action tasks directly and is responsible for them towards the beneficiary. Linked third parties do NOT sign the GA (and are therefore not beneficiaries). The beneficiary remains responsible towards the Commission/Agency for the work carried out by the linked third party. Moreover, the beneficiaries are financially responsible for any undue amount paid by the Commission as reimbursement of costs of their linked third parties — unless the GA foresees joint and several liability (see Article 44.1).  Work is attributed to the linked third party (in Annex 1) and is usually carried out on its premises  Work is under the full and direct control, instructions and management of the linked third party, who carries out this part of the action (with its employees). Only ‘affiliated entities’ or ‘entities with a legal link to a beneficiary’ can be linked third parties. ‘Entities with a legal link’ refers to an established relationship (between the third party and the beneficiary), which is:  broad and not specifically created for the work in the GA Accordingly, its duration must go beyond the action duration and it usually pre-dates and outlasts the GA; ‘ad hoc’ collaboration agreements or contracts to carry out work in the action are NOT covered. (In this latter case, both legal entities should be beneficiaries.) AND  a legal relationship. This may be either a legal structure (e.g. the relationship between an association and its members) or through an agreement or contract not limited to the action (e.g. a collaboration agreement for research in a particular field). If the only relation between two entities is a capital link (i.e. ownership of part of the issued share capital), the entity may only participate as a linked third party if it is an ‘affiliated entity’ (see below). ‘Affiliated entity’ means:  under the direct or indirect control of the beneficiary or  under the same direct or indirect control as the beneficiary or  directly or indirectly controlling the beneficiary. Affiliated entities cover not only the case of parent companies or holdings and their daughter companies or subsidiaries and vice-versa, but also the case of affiliates between themselves (e.g. entities controlled by the same entity). Examples (entities with a legal link): Joint Research Units (JRU) (i.e. research laboratories/infrastructures created and owned by two or more different legal entities in order to carry out research). They do not have a separate legal personality, but form a single research unit where staff and resources from the different members are put together to the benefit of all. Though lacking legal personality, they exist physically, with premises, equipment, and resources individual to H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 136 them and distinct from ‘owner’ entities. A member of the JRU is the beneficiary and any other member of the JRU contributing to the action and who is not a beneficiary of the GA has to be identified in Article 14. The JRU has to meet all the following conditions:  scientific and economic unity  last a certain length of time  recognised by a public authority. It is necessary that the JRU itself is recognised by a public authority, i.e. an entity identified as such under the applicable national law. The beneficiary must provide to the Commission/Agency, a copy of the resolution, law, decree, decision, attesting the relationship between the beneficiary and the linked third party(ies), or a copy of the document establishing the ‘joint research unit’, or any other document that proves that research facilities are put in a common structure and correspond to the concept of scientific and economic unit. Associations, foundations or other legal entities composed of members (where the association/foundation etc. is the beneficiary and the members are the linked third parties). Examples (affiliated entities): Company A established in France holding 20% of the shares in Company B established in Italy. However, that 20% of shares has 60% of the voting rights in company B. Therefore company A controls company B and both companies may be linked third parties in a H2020 GA. Company X and company Y do not control each other, but they are both owned by company Z. They are both considered affiliated entities. Linked third parties must fulfil the general conditions for participation and funding under Horizon 2020.43 Example: Company A established in the UK is a beneficiary in a grant. A owns B, a French company and also owns C, an American company. B & C may be considered affiliates to A, however only B may declare costs as a third party linked to A, because company C is established in a third country, and the costs of participants established in third countries (not listed in the work programme/call) are not eligible for funding under Article 10 of the Rules for Participation. The Commission/Agency may (during the selection procedure) require joint and several liability of a linked third party, if:  the financial viability/capacity of a beneficiary is ‘weak’  the beneficiary mainly coordinates the work of its linked third party. Examples: 1. The beneficiary is an association and most of the work is carried out by several of its members as linked third parties. 2. The beneficiary is a small company with a substantial part of its work implemented by a bigger affiliated company. 3. The proposal submitted by four independent entities established in four Member States is positively evaluated. The four successful applicants decide to form a legal entity to simplify the management of the project. The newly established entity will be the beneficiary, i.e. a new legal entity. The successful applicants will carry out the work as linked third parties of the new legal entity. If requested, the third party must accept joint and several liability with the beneficiary. In this case it must sign a declaration (on paper and in blue-ink, using Annex 3a) to be submitted by the beneficiary at the moment of its accession to the GA (or of the amendment introducing the linked third party in the GA; see Article 56). The linked third party must send the original to the beneficiary (by registered post with proof of delivery). The beneficiary must keep the original in its files and upload it (as a scanned PDF copy) in the system. The liability is for any amount owned by the beneficiary under the GA, and up to the maximum EU contribution indicated for the third party in the Annex 2 to the GA. 43 See Articles 8 and 9 of the Rules for Participation. For more information on conditions for participation and funding, see the Online Manual. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 137 Entities performing a substantial part of the work (i.e. action tasks) should in principle be beneficiaries, NOT linked third parties. Linked third parties should only exceptionally perform a major part of the R&I work. Examples: 1. Entities specifically established for the purpose of implementing the action (e.g. EEIGs). 2. National research associations established according to the national law in order to carry out research not limited to the action. 3. A group of legal entities (companies/research organisations) that have a common research agenda and that have a structure consisting of an association coordinating the research. This structure/consortium is not limited to the H2020 action and the members have strong contractual commitments among each other and the coordinating association. The association represents its members and coordinates administratively their work in the action, even if it is not performing any R&I work in the action. In this case, the association may be the beneficiary and the members of the association are its linked third parties carrying out the R&I work. 2. Additional eligibility condition: Linked third parties identified in Article 14 — Tasks set out in Annex 1 — Estimated costs set out in Annex 2 — No simplified approval procedure The linked third parties must be named in Article 14 and their tasks and estimated costs must be identified in Annexes 1 and 2 already at the moment of the GA signature (or added later, through an amendment; see Article 55). There is NO ‘simplified approval procedure’. 3. Additional eligibility condition: Costs of the linked third party The linked third parties may declare their costs (in their financial statements; see Article 20.3), if the cost eligibility conditions set out in Article 6.3 are fulfilled (e.g. actually incurred by the linked third party, necessary for the action, incurred during the action duration, etc.). The costs must be recorded in the accounts of the linked third party. Linked third parties may declare costs for all cost categories (as provided for in Article 5), including indirect costs (at the 25% flat rate). Each linked third party declares its own costs. The costs of the linked third party must not be included in the beneficiary’s financial statements. Each linked third party has its own financial statements, but these statements must be submitted by its beneficiary via the electronic exchange system (since linked third parties do not have access; see Article 20). For this purpose, linked third parties must send their signed financial statements on paper to their beneficiary. The beneficiary must keep the originals (see Article 18.1.2 last option). Each linked third party has to provide its own certificate on the financial statements (see Article 20.4). Article 14 contains both additional cost eligibility conditions (in Article 14.1.1) and ‘other obligations’ (in Article 14.1.2). . For more information on the financial viability/capacity check, see the Online Manual. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 138 The threshold of EUR 325 000 applies to each linked third party (independently of the EU contribution of its beneficiary). For the same reasons as above, the beneficiary must keep the original of the certificate (see Article 18.1.2 last option). 4. Additional eligibility condition: Controls on the linked third parties (by the Commission/Agency, ECA and OLAF) — Evaluation of the impact of the action The beneficiaries must ensure that the Commission/Agency, the European Court of Auditors (ECA) and the European Anti-Fraud Office (OLAF) have the right to carry out checks, reviews, audits and investigations on the linked third parties (see Article 22), and in particular to audit their costs and proper implementation of action tasks. They must also ensure that the Commission/Agency has the right to make an evaluation of the impact of the action under Article 23. It is the beneficiaries’ responsibility to ensure that these obligations are accepted by the linked third parties (for example, if they refuse access and the Commission/Agency cannot verify the eligibility of the costs, it will reject them). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 139 ARTICLE 15 — FINANCIAL SUPPORT TO THIRD PARTIES 1. Financial support to third parties This optional Article (together with the corresponding options in Article 6 and other provisions) will be inserted into the GA if the action involves financial support to third parties (i.e. funding by the beneficiary of (one or more) recipients that are not party to the GA, also called ‘cascade funding’). ‘Financial support’ may be given via a financial donation to natural persons (e.g. allowance, scholarship, fellowship) or legal persons (e.g. non-repayable financial assistance to local NGOs), seed money to start-ups or microcredit, or other forms. (For prizes, see Article 15.2) Examples: An innovation project in the area of sustainable agriculture and forestry includes financial support for end-users (farmers) testing the technology developed within the action. One of the work packages in Annex 1 includes funding for awarding three research scholarships in the field of the action. Support in kind (e.g. transfer of material for free) by the beneficiary to a third party is NOT considered financial support. Actions may involve financial support to third parties only where this is explicitly allowed in the work programme/call. . ARTICLE 15 — FINANCIAL SUPPORT TO THIRD PARTIES 15.1 Rules for providing financial support to third parties [OPTION to be used if foreseen in the work programme: 15.1.1 The beneficiaries must provide financial support in accordance with the conditions set out in Annex 1. At a minimum, these conditions must include: (a) the maximum amount of financial support for each third party. The maximum amount may not exceed EUR 60 000 for each third party, unless it is necessary to achieve the objectives of the action as described in Annex 1; (b) the criteria for calculating the exact amount of the financial support; (c) the different types of activity that qualify for financial support, on the basis of a closed list; (d) the persons or categories of persons that may receive financial support, and (e) the criteria for giving financial support. The beneficiaries must ensure that [the Agency,] the Commission, the European Court of Auditors (ECA) and the European Anti-Fraud Office (OLAF) can exercise their rights under Articles 22 and 23 also towards the third parties receiving financial support. 15.1.2 The beneficiaries must ensure that their obligations under Articles 35, 36, 38 and 46 also apply to the third parties receiving financial support.] [OPTION: Not applicable] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 140 Linked third parties may provide financial support to third parties under the same conditions as the beneficiaries. The recipients are not party to the GA and therefore do NOT need to be identified in the GA or have a PIC. 2. Additional eligibility condition: Conditions for support set out in Annex 1 — Maximum amount of the financial support — Types of activities — Categories of persons — Criteria for financial support The beneficiaries must comply with the conditions for the support that are set out in Annex 1, and in particular:  the maximum amount per third party The maximum amount may normally NOT be more than EUR 60 000 per recipient. A higher amount can exceptionally be set out in Annex 1, if the work programme/call explicitly allows it and the proposal (and Annex 1) explain why this is necessary for the objectives of the action. This is a limit per recipient; several recipients could receive up to EUR 60 000 each (e.g. 3 grants of EUR 50 000 each).  the criteria for determining the exact amount of financial support (e.g. EUR 2 000 per hectare; EUR 30 000 per student for a two-year scholarship) The financial support provided by the beneficiaries may take any form (e.g. a lump sum or the reimbursement of the costs incurred by the recipients when implementing the supported activities).  a clear and exhaustive list of the types of activities that qualify for financial support for third parties (e.g. financial support for third parties allowed for technology-testing activities) These activities should benefit, primarily, the recipients (NOT the beneficiaries). The financial support is NOT the same as subcontracting (see Article 13) or purchase of goods, works or services (see Article 10).  the persons or category(ies) of persons that may receive it (e.g. farmers; PhD students) Beneficiaries should describe in Annex 1 the procedures for selecting the recipients.  the criteria for giving financial support (e.g. physical characteristics of the agricultural plots which make them suitable for the purpose of the action). These criteria should respond to the objectives set out in the work programme/call. The conditions must also already be part of the proposal (see the proposal templates). Article 15.1 contains both additional cost eligibility conditions (in Article 15.1.1) and ‘other obligations’ (in Article 15.1.2). . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 141 3. Additional eligibility condition: Controls on the recipients (by the Commission/Agency, ECA and OLAF) — Evaluation of the impact of the action The beneficiaries must ensure that the Commission/Agency, the European Court of Auditors (ECA) and the European Anti-Fraud Office (OLAF) have the right to carry out checks, reviews, audits and investigations on the recipients (see Article 22). They must also ensure that the Commission/Agency has the right to make an evaluation of the impact of the action under Article 23. It is the beneficiaries’ responsibility to ensure that these obligations are accepted by the recipients (for example, if they refuse access and the Commission/Agency cannot verify the eligibility of the costs, it will reject them). 4. ‘Other obligation’: Extension of obligations under the GA to recipients The beneficiaries are responsible for the proper use of the funding by the recipients and must ensure that they comply with certain obligations under the GA. Obligations that must be extended to recipients:  Avoiding conflicts of interest (see Article 35)  Maintaining confidentiality (see Article 36)  Promoting the action and give visibility to the EU funding (see Article 38)  Liability for damages (see Article 46). Best practice: In order to be able to fulfil this obligation, the beneficiaries should to impose contractual arrangements on the recipients (including control measures and/or reducing the financial support). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 142 1. Financial support to third parties (via prizes) This optional Article (together with the corresponding options in Article 6 and other provisions) will be inserted into the GA if the action involves financial support to third parties in the form of prizes. Example: Inducement prize announced at the beginning of the action for identifying a (new) approach to dealing with a technical implementation problem to be tackled at the end of the action. Such prizes are NOT EU prizes (although the beneficiaries must promote the action and give visibility to the EU funding received; see Article 38). 2. Additional eligibility condition: Conditions for support set out in Annex 1 — Conditions for participation — Award criteria — Amount of the prize — Payment arrangements Article 15.2 contains both additional cost eligibility conditions (in Article 15.2.1) and ‘other obligations’ (in Article 15.2.2). . 15.2 Financial support in the form of prizes [OPTION to be used if foreseen in the work programme: 15.2.1 The beneficiaries must provide prizes in accordance with the conditions described in Annex 1. At a minimum, these conditions must include: (a) the conditions for participation; (b) the award criteria; (c) the amount of the prize, and (d) the payment arrangements. The beneficiaries must ensure that [the Agency,] the Commission, the European Court of Auditors (ECA) and the European Anti-Fraud Office (OLAF) can exercise their rights under Articles 22 and 23 also towards the third parties receiving a prize. 15.2.2 The beneficiaries must ensure that their obligations under Articles 35, 36, 38 and 46 also apply to the third parties receiving a prize.] [OPTION: Not applicable] 15.3 Consequences of non-compliance [OPTION to be used if 15.1 and/or 15.2 are applicable: If a beneficiary breaches any of its obligations under Articles 15.1.1 or 15.2.1, the costs related to the financial support or prize will be ineligible (see Article 6) and will be rejected (see Article 42). If a beneficiary breaches any of its obligations under Articles 15.1.2 or 15.2.2, the grant may be reduced (see Article 43). Such breaches may also lead to any of the other measures described in Chapter 6.] [OPTION: Not applicable] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 143 Just like for financial support via grants, the beneficiaries must comply with the conditions for support that are set out in Annex 1 and in particular:  the conditions for participation and the conditions for early termination of the contest, if any (e.g. eligibility and exclusion criteria; deadline for submission of entries; possibility of hearings)  the award criteria for assessing the quality of entries in light of the objectives and expected results The criteria must be objective.  the amount of the prize (e.g. EUR 70 000)  the payment arrangements (usually one instalment). 3. Additional eligibility condition: Controls on the recipients (by the Commission/Agency, ECA and OLAF) — Evaluation of the impact of the action The beneficiaries must ensure that the Commission/Agency, the European Court of Auditors (ECA) and the European Anti-Fraud Office (OLAF) have the right to carry out checks, reviews, audits and investigations on the recipients of a prize, to verify that the conditions for the award of the prize have been respected (see Article 22). They must also ensure that the Commission/Agency has the right to make evaluations of the impact of the action under Article 23. It is the beneficiaries’ responsibility to ensure that these obligations are accepted by the recipients (for example, if they refuse access and the Commission/Agency cannot verify the eligibility of the costs, it will reject them). 4. ‘Other obligation’: Extension of obligations under the GA to recipients The beneficiaries are responsible for the award of the prize to the recipients and must ensure that they comply with certain obligations under the GA. Obligations that must be extended to recipients:  Avoiding conflicts of interest (see Article 35)  Maintaining confidentiality (see Article 36)  Promoting the action and give visibility to the EU funding (see Article 38)  Liability for damages (see Article 46). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 144 ARTICLE 16 — PROVISION OF TRANS-NATIONAL OR VIRTUAL ACCESS TO RESEARCH INFRASTRUCTURE ARTICLE 16 — PROVISION OF TRANS-NATIONAL OR VIRTUAL ACCESS TO RESEARCH INFRASTRUCTURE 16.1 Rules for providing trans-national access to research infrastructure [OPTION trans-national access to research infrastructure: 16.1.1 ‘Access providers’ 30 must provide access to research infrastructure or installations 31 in accordance with the following conditions: (a) access which must be provided: The access must be free of charge, trans-national access to research infrastructure or installations for selected user-groups. This access must include the logistical, technological and scientific support and the specific training that is usually provided to external researchers using the infrastructure. (b) categories of users that may have access: Trans-national access must be provided to selected ‘user-groups’, i.e. teams of one or more researchers (users) led by a ‘user group leader’. The user group leader and the majority of the users must work in a country other than the country(ies) where the installation is located. This rule does not apply: - if access is provided by an International organisation, the Joint Research Centre (JRC), an ERIC or similar legal entities; - in case of remote access to a set of installations located in different countries offering the same type of service. Only user groups that are allowed to disseminate the results they have generated under the action may benefit from the access, unless the users are working for SMEs. Access for user groups with a majority of users not working in a EU or associated country 32 is limited to 20 % of the total amount of units of access provided under the grant, unless a higher percentage is foreseen in Annex 1; (c) procedure and criteria for selecting user groups: The user groups must request access by submitting (in writing) a description of the work that they wish to carry out and the names, nationalities and home institutions of the users. The user groups must be selected by a selection panel set up by the access providers. The selection panel must be composed of international experts in the field, at least half of them independent from the beneficiaries, unless otherwise specified in Annex 1. The selection panel must assess all proposals received and recommend a short-list of the user groups that should benefit from access. The selection panel must base its selection on scientific merit, taking into account that priority should be given to user groups composed of users who: - have not previously used the installation and H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 145 1. Trans-national access to research infrastructure This optional Article (together with the corresponding options in Article 6 and other provisions) will be inserted into the GA if the action involves trans-national access to research infrastructure for scientific communities (‘provision of access activities’), i.e.:  actions under Part I of the Horizon 2020 Framework Programme, ‘Research infrastructures’ under the following topics:  ‘integrating activities’ (INFRAIA-1-2014-2015: Integrating and opening existing national and regional research infrastructures of European interest)  ‘individual support’(INFRADEV-3-2015: Individual implementation and operation of ESFRI projects)  ‘cluster support’ (INFRADEV-4-2014-2015: Implementation and operation of cross- cutting services and solutions for clusters of ESFRI and other relevant research infrastructure initiatives). - are working in countries where no equivalent research infrastructure exist. It will apply the principles of transparency, fairness and impartiality. [OPTION: In addition, the beneficiaries must comply with the following additional rules for the selection of user groups: […]] 33 (d) other conditions: The access provider must request written approval from the [Commission][Agency] (see Article 52) for the selection of user groups requiring visits to the installation(s) exceeding 3 months, unless such visits are foreseen in Annex 1. 16.1.2 In addition, the access provider must: - advertise widely, including on a dedicated website, the access offered under the Agreement; - promote equal opportunities in advertising the access and take into account the gender dimension when defining the support provided to users; - ensure that users comply with the terms and conditions of the Agreement; - ensure that its obligations under Articles 35, 36, 38 and 46 also apply to the users. [OPTION: Not applicable] 30 ‘Access provider’ means a beneficiary or linked third party that is in charge of providing access to one or more research infrastructure or installations, or part of them, as described in Annex 1. 31 ‘Installation’ means a part or a service of a research infrastructure that could be used independently from the rest. A research infrastructure consists of one or more installations. 32 For the definition see 2.1(3) Rules for Participation Regulation No 1290/2013: ‘associated country’ means a third country which is party to an international agreement with the Union, as identified in [OPTION for EU grants: Article 7 of the H2020 Framework Programme Regulation No 1291/2013. Article 7 sets out the conditions for association of non-EU countries to Horizon 2020.][OPTION for Euratom grants: Article 5 of Council Regulation (Euratom) No 1314/2013 of 16 December 2013 on the Research and Training Programme of the European Atomic Energy Community (2014-2018) complementing the Horizon 2020 – The Framework Programme for Research and Innovation (‘H2020 Euratom Research and Training Programme Regulation No 1314/2013’) (OJ L 347, 20.12.2013, p. 948) . Article 5 sets out the conditions for association of non-EU countries to Horizon 2020.] 33 If the authorising officer considers necessary to give priority to certain categories of users. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 146 For ‘integrating activities’, access to research infrastructure is a mandatory component, while it is optional for the other two topics. ‘Cluster support’ actions currently only include pilot provision of trans-national access, no virtual access (see the Main Work Programme 2014-2015). Grants for this type of action usually reimburse — for the provision of access activity — the following types of costs:  ‘access costs’ (i.e. the operating costs of the research infrastructure44 or installation45 and costs related to logistical, technological and scientific support for users, including ad-hoc user training and the preparatory and closing activities needed to use the installation) ‘Access costs’ for trans-national access may be declared as unit costs, actual costs or — under certain conditions — as a combination of the two (see Articles 5.2(f) and 6.2.F), while the other costs in this list must be declared as actual costs (see Articles 5.2(d) and 6.2.D). If access costs are declared as unit cost, they must be declared under the budget category ‘specific cost category – access costs for providing trans-national access to research infrastructure’ (see Article 5.2(f) and 6.2.F). If they are declared as actual costs, they must be declared under the other budget categories (see Articles 5.2(a-e) and 6.2.A-E).  users’ travel and subsistence costs  costs of advertising the trans-national access offered under the action  costs related to the selection procedure (e.g. the selection panel members’ travel and subsistence costs, logistical costs of meetings, fees, etc.)  costs of preparing the detailed access activity information that must be included in the periodic technical reports (see Article 20.3). Capital investments (i.e. equipment costs for renting, leasing, purchasing depreciable equipment, infrastructure or other assets) will NOT be reimbursed (for the provision of access activities; see Article 6.2.D.2). Trans-national access must be measured (in ‘units of access’). The units of access for the various installations that provide trans-national access under the grant must be specified in Annex 1 to the GA. Examples (units of access): per beam-hour for a synchrotron; per night for a telescope; per number of frozen embryos for a mouse repository; per week of access for a historical archive; per campaign-day for a research vessel. For trans-national access, the GA will always specify a unit of access (independently of whether the costs are declared as unit cost or actual costs). The beneficiaries must keep appropriate records and supporting documentation to justify the number of units of trans-national access for which they declare costs (see Article 18), including:  users’ names, nationalities and home institutions 44 For the definition of research infrastructure, see Article 2(6) of the H2020 Framework Programme Regulation No (EU) No 1291/2013 and the footnote in Article 6.2.D.4 of the MGA: ‘Research infrastructure’ are facilities, resources and services that are used by the research communities to conduct research and foster innovation in their fields. Where relevant, they may be used beyond research, e.g. for education or public services. They include: major scientific equipment (or sets of instruments); knowledge-based resources such as collections, archives or scientific data; e-infrastructure such as data and computing systems and communication networks; and any other infrastructure of a unique nature essential to achieve excellence in research and innovation. Such infrastructure may be ‘single-sited’, ‘virtual’ or ‘distributed’. 45 ‘Installation’ means a part or a service of a research infrastructure that could be used independently from the rest. A research infrastructure consists of one or more installations. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 147  the nature of access and  the number of units of access provided. In addition, they must include (just like for virtual access) detailed information on the provision of access activity in the periodic technical reports (see Article 20.3). 2. Additional condition for eligibility: Access which must be provided Trans-national access can be either:  in person (‘hands-on’), provided to selected users that visit the installation or  remote, through the provision to selected users of remote scientific services. Examples (remote access): provision of reference materials or samples (e.g. shipping of a virus strain); performing a remote sample analysis or sample deposition; remote access to a high- performance computing facility. Remote trans-national access requires competitive selection of the users to be served under the GA as usually it applies to resources that are not unlimited (e.g. computing hours on a supercomputer or remote analysis of a sample). It is thus different from virtual access, which applies to resources that can be simultaneously used by an unlimited number of users (e.g. a dataset available on the internet). Trans-national access must be given to selected user groups (free of charge). 3. Additional condition for eligibility: Categories of users that may have access — User groups with a majority of users not working in an EU Member State or H2020 associated country For trans-national access, user groups in which all or most users work in third countries may only have access for up to 20 % of the total number of units of access provided under the grant. The consortium should itself define if this 20 % limit is uniformly applied to the different installations or if the above mentioned user groups may use some installations more than others. It should do this in the consortium agreement. 4. Additional condition for eligibility: Selection procedure with a selection panel For trans-national access, access providers must set up a common selection panel that regularly evaluates the applications for access and recommends a shortlist of the user groups that would benefit from access. If justified, an access provider may use several different selection sub-panels. Example: Different thematic selection sub-panels could be set up for a set of analytical facilities serving multidisciplinary communities. Article 16.1 contains both additional cost eligibility conditions (in Article 16.1.1) and ‘other obligations’ (in Article 16.1.2). . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 148 5. Additional eligibility condition: Controls on the users (by the Commission/Agency, ECA and OLAF) — Evaluation of the impact of the action The beneficiaries must ensure that the Commission/Agency, the European Court of Auditors (ECA) and the European Anti-Fraud Office (OLAF) have the right to carry out checks, reviews, audits and investigations on the users (see Article 22), and in particular to audit proper implementation of action tasks. They must also ensure that the Commission/Agency has the right to make an evaluation of the impact of the action under Article 23. It is the beneficiaries’ responsibility to ensure that these obligations are accepted by the users (for example, if they refuse access and the Commission/Agency cannot verify the eligibility of the costs, it will reject them). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 149 1. Virtual access to research infrastructure This optional Article (together with the corresponding options in Article 6 and other provisions) will be inserted into the GA if the action involves virtual access to research infrastructure for scientific communities (‘provision of access activities’), i.e.:  actions under Part I of the Horizon 2020 Framework Programme, ‘Research infrastructures’. H2020 grants will only support virtual services that are widely used by the community of European researchers. Grants for this type of actions usually cover — for the provision of access activity — the following types of costs:  operating costs of the installation during the course of the action 16.2 Rules for providing virtual access to research infrastructure [OPTION virtual access to research infrastructure: ‘Access providers’ 34 must provide access to research infrastructure or installations 35 in accordance with the following conditions: (a) access which must be provided: The access must be free of charge, virtual access to research infrastructure or installations. ‘Virtual access’ means open and free access through communication networks to resources needed for research, without selecting the researchers to whom access is provided; (b) other conditions: The access provider must have the virtual access services assessed periodically by a board composed of international experts in the field, at least half of whom must be independent from the beneficiaries, unless otherwise specified in Annex 1.] [OPTION: Not applicable] 16.3 Consequences of non-compliance [OPTION to be used if 16.1 and/or 16.2 are applicable: If a beneficiary breaches any of its obligations under Articles 16.1.1 and 16.2, the costs of access will be ineligible (see Article 6) and will be rejected (see Article 42). If a beneficiary breaches any of its obligations under Articles 16.1.2, the grant may be reduced (see Article 43). Such breaches may also lead to any of the other measures described in Chapter 6.] [OPTION: Not applicable] 34 ‘Access provider’ means a beneficiary or linked third party that is in charge of providing access to one or more research infrastructures or installations, or part of them, as described in Annex 1. 35 ‘Installation’ means a part or a service of a research infrastructure that could be used independently from the rest. A research infrastructure consists of one or more installations. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 150  costs related to technological and scientific support for users’ access (e.g. a helpdesk)  costs of advertising virtual access offered under the action  costs related to the assessment carried out by the board of international experts (e.g. costs of organising a board meeting)  costs of preparing the detailed access activity information that must be included in the periodic technical reports (see Article 20.3) and the assessment report (see below point 6). Capital investments (i.e. costs of renting, leasing, purchasing depreciable equipment, infrastructure or other assets) will not be reimbursed (for the provision of access activity; see Article 6.2.D.2). Virtual access can in principle NOT be measured; therefore the GA does not specify a unit of access for virtual access provision. The beneficiaries must include detailed information on the provision of access activity in the periodic technical reports, in the form of statistics on all users in the reporting period compiled through web analytical tools (see Article 20.3). 2. Additional condition for eligibility: Access which must be provided Virtual access applies to widely-used research resources that are openly and freely available through communication networks. Example: access to an open database available on the internet. Access must be open to all users; users are not selected. 3. Additional condition for eligibility: Periodic assessment by a board of international experts For virtual access, the access services must be regularly assessed by an external board of international experts. At least two assessments are usually carried out during the course of an action. The assessment reports must already be part of the proposal (as deliverables; see the proposal templates) and be included in Annex 1 of the GA. Article 16.2 contains additional cost eligibility conditions. . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 151 SECTION 2 RIGHTS AND OBLIGATIONS RELATED TO THE GRANT ADMINISTRATION ARTICLE 17 — GENERAL OBLIGATION TO INFORM 1. Requests for information In addition to the specific information obligations set out in other parts of the GA (e.g. Articles 22.1.2, 22.1.3 and 23), the Commission/Agency may at any point request a beneficiary to provide any information it needs to verify that the beneficiary:  properly implemented the tasks described in Annex 1 SECTION 2 RIGHTS AND OBLIGATIONS RELATED TO THE GRANT ADMINISTRATION ARTICLE 17 — GENERAL OBLIGATION TO INFORM 17.1 General obligation to provide information upon request The beneficiaries must provide — during implementation of the action or afterwards and in accordance with Article 41.2 — any information requested in order to verify eligibility of the costs, proper implementation of the action and compliance with any other obligation under the Agreement. 17.2 Obligation to keep information up to date and to inform about events and circumstances likely to affect the Agreement Each beneficiary must keep information stored in the ‘Beneficiary Register’ (via the electronic exchange system; see Article 52) up to date, in particular, its name, address, legal representatives, legal form and organisation type. Each beneficiary must immediately inform the coordinator — which must immediately inform the [Commission][Agency] and the other beneficiaries — of any of the following: (a) events which are likely to affect significantly or delay the implementation of the action or the EU’s financial interests, in particular: (i) changes in its legal, financial, technical, organisational or ownership situation [or those of its linked third parties and (ii) changes in the name, address, legal form, organisation type of its linked third parties;] (b) circumstances affecting: (i) the decision to award the grant or (ii) compliance with requirements under the Agreement. 17.3 Consequences of non-compliance If a beneficiary breaches any of its obligations under this Article, the grant may be reduced (see Article 43). Such breaches may also lead to any of the other measures described in Chapter 6. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 152  complied with its obligations under the GA. The Commission/Agency may request information for any purpose (e.g. monitoring the action, assessing reports and requests for payment, checks, reviews, audits or investigations or evaluation of the action’s impact). It may request any type of information it needs (including personal data, to order to verify that costs declared for specific people are eligible; see Article 39). The level of detail will depend on the purpose of the request. The Commission may request information at any time, either during the action’s implementation or afterwards. Examples: In an ex-post financial audit that starts 18 months after the balance is paid, the Commission/Agency may request any information it needs during the procedure. The audit may continue beyond the two years after the balance is paid. The Commission may request information from the beneficiaries in order to evaluate the action’s impact (Article 23) up to five years after the balance is paid. The beneficiaries must comply with any additional exploitation obligations set out in Annex 1, for up to four years after the action ends (see Article 3). They are therefore obliged to provide any information the Commission/Agency requests to verify that the action was correctly implemented and that the beneficiaries complied with their obligations under the GA. The beneficiary concerned must provide accurate, precise and complete information, in the format and within the deadline requested (see Article 22). It is the coordinator who usually provides the information requested — unless the GA specifies direct communication with the other beneficiaries (see Articles 20, 22, 23, 30, 41, 55). If the coordinator no longer exists after the action ends (e.g. if it went bankrupt), beneficiaries may provide the information requested directly to the Commission/Agency. Until the balance is paid, all information must be sent via the Participant Portal. Afterwards, formal notifications must be sent in writing by registered post with proof of delivery (see Article 52). 2. Information in the Beneficiary Register Each beneficiary must keep its information in the Participant Portal Beneficiary Register up-to- date, including after the end of the grant. The information includes:  name  address  legal representatives  legal form (e.g. private limited liability company, public law body, S.A., S.L.)  organisation type (e.g. SME, secondary or higher education establishment, etc.). The IT system automatically informs the coordinator whenever a beneficiary updates its information. Updated information remains necessary both to contact the beneficiaries after the end of the action and if they want to participate in other EU grants. . For more information on beneficiary registration, validation and data updates, see the Online Manual. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 153 3. Information about events likely to affect or delay the action or affect the EU’s financial interests Each beneficiary must immediately inform the coordinator if an event is likely to significantly affect or delay the action’s implementation or affect the EU’s financial interests. Examples (situations likely to significantly affect or delay the action’s implementation or affect the EU’s financial interests): a beneficiary is under financial stress and chooses to liquidate; a beneficiary is bought by another legal entity; a beneficiary plans to move its laboratory from a Member State to a non- EU country The beneficiaries must also inform the coordinator about any changes concerning their linked third parties. For events linked to changes that also require an update of the Beneficiary Register (see above), the beneficiary must update the Beneficiary Register and inform the coordinator. The beneficiary must inform the coordinator offline, via its usual communication channels (e.g. e-mail, registered letters with proof of delivery, etc.) and not via the electronic exchange system. In any case, it is advisable that the beneficiary informs the coordinator in writing (not only orally). After receiving the information from the beneficiary, the coordinator must immediately inform:  the Commission/Agency, via the electronic exchange system  the other beneficiaries, through the usual communication channels (in writing and offline). 4. Information about circumstances affecting the decision to award the grant or compliance with requirements under the GA Each beneficiary must immediately inform the coordinator about any situation that:  could have affected the decision to award the grant if it had been known by the evaluators at the time of evaluation or  could affect the fulfilment of obligations under the GA. Example (situation that could have affected the decision to award the grant or compliance with requirements under the GA): A consortium has three beneficiaries. One of them has a laboratory with specialised equipment and personnel, including a team of internationally-renowned experts in the same field as the project. The quality of the work to be carried out by this laboratory was taken into account by the evaluators when the grant was awarded. During the action’s implementation, the beneficiary sells the laboratory to an external company, losing a good part of the relevant expertise, and as a result has to outsource part of the work. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 154 ARTICLE 18 — KEEPING RECORDS — SUPPORTING DOCUMENTATION ARTICLE 18 — KEEPING RECORDS — SUPPORTING DOCUMENTATION 18.1 Obligation to keep records and other supporting documentation The beneficiaries must — for a period of [OPTION by default: five][OPTION for low value grants 36 : three] years after the payment of the balance — keep records and other supporting documentation in order to prove the proper implementation of the action and the costs they declare as eligible. They must make them available upon request (see Article 17) or in the context of checks, reviews, audits or investigations (see Article 22). If there are on-going checks, reviews, audits, investigations, litigation or other pursuits of claims under the Agreement (including the extension of findings; see Article 22), the beneficiaries must keep the records and other supporting documentation until the end of these procedures. The beneficiaries must keep the original documents. Digital and digitalised documents are considered originals if they are authorised by the applicable national law. The [Commission][Agency] may accept non- original documents if it considers that they offer a comparable level of assurance. 18.1.1 Records and other supporting documentation on the scientific and technical implementation The beneficiaries must keep records and other supporting documentation on scientific and technical implementation of the action in line with the accepted standards in the respective field. 18.1.2 Records and other documentation to support the costs declared The beneficiaries must keep the records and documentation supporting the costs declared, in particular the following: (a) for actual costs: adequate records and other supporting documentation to prove the costs declared, such as contracts, subcontracts, invoices and accounting records. In addition, the beneficiaries’ usual cost accounting practices and internal control procedures must enable direct reconciliation between the amounts declared, the amounts recorded in their accounts and the amounts stated in the supporting documentation; (b) for unit costs: adequate records and other supporting documentation to prove the number of units declared. [OPTION for trans-national access to research infrastructure: This documentation must include records of the names, nationalities, and home institutions of users, as well as the nature and quantity of access provided to them.] Beneficiaries do not need to identify the actual eligible costs covered or to keep or provide supporting documentation (such as accounting statements) to prove the amount per unit. In addition, for direct personnel costs declared as unit costs calculated in accordance with the beneficiary’s usual cost accounting practices, the beneficiaries must keep adequate records and documentation to prove that the cost accounting practices used comply with the conditions set out in Article 6.2, Point A. The beneficiaries [and linked third parties] may submit to the Commission, for approval, a certificate (drawn up in accordance with Annex 6) stating that their usual cost accounting practices comply with these conditions (‘certificate on the methodology’). If the certificate is approved, costs declared in line with this methodology will not be challenged subsequently, unless the beneficiaries have concealed information for the purpose of the approval. (c) for flat-rate costs: adequate records and other supporting documentation to prove the eligibility of the costs to which the flat-rate is applied. The beneficiaries do not need to identify the costs covered or provide supporting documentation (such as accounting statements) to prove the amount declared at a flat-rate[;][.] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 155 1. Records and other supporting documentation The beneficiaries (and linked third parties; see point 10) must keep appropriate and sufficient evidence to prove eligibility of all the costs declared, proper implementation of the action and compliance with all the other obligations under the GA. ‘Sufficiency’ relates to the quantity of evidence; ‘appropriateness’ relates to its quality. Evidence is considered sufficient and appropriate if it is persuasive enough for the auditors, who assess it according to generally accepted audit standards.46 All evidence must be verifiable, auditable and available. It must therefore be correctly archived for at least five years after the balance is paid (three years for grants up to EUR 60 000). If the beneficiaries throw supporting documents away during this period, they risk that the grant is reduced, costs are declared ineligible or rejected, or recoveries are more difficult. 46 International Standard on Auditing ISA 500 ‘Audit Evidence’. Costs that are not supported by appropriate and sufficient evidence may be rejected (and other measures described in Chapter 6 may be applied as well). . . (d) [OPTION if lump sum foreseen in Article 5.2: for lump sum costs: adequate records and other supporting documentation to prove that the corresponding tasks or part of the action as described in Annex 1 were implemented properly. The beneficiaries do not need to identify the actual eligible costs covered or provide supporting documentation (such as accounting statements) to prove the amount declared as a lump sum.] In addition, for personnel costs (declared as actual costs or on the basis of unit costs), the beneficiaries must keep time records for the number of hours declared. The time records must be in writing and approved by the persons working on the action and their supervisors, at least monthly. In the absence of reliable time records of the hours worked on the action, the [Commission][Agency] may accept alternative evidence supporting the number of hours declared, if it considers that it offers an adequate level of assurance. As an exception, for persons working exclusively on the action, there is no need to keep time records, if the beneficiary signs a declaration confirming that the persons concerned have worked exclusively on the action. [OPTION to be added if Article 14 applies: For costs declared by linked third parties (see Article 14), it is the beneficiary that must keep the originals of the financial statements and the certificates on the financial statements of the linked third parties.] 18.2 Consequences of non-compliance If a beneficiary breaches any of its obligations under this Article, costs insufficiently substantiated will be ineligible (see Article 6) and will be rejected (see Article 42), and the grant may be reduced (see Article 43). Such breaches may also lead to any of the other measures described in Chapter 6. 36 For the definition, see Article 185 of Commission Delegated Regulation (EU) No 1268/2012 of 29 October 2012 on the rules of application of Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council on the financial rules applicable to the general budget of the Union (OJ L 362, 31.12.2012, p. 1) (‘Rules of Application Regulation No 1268/2012’): ‘low value grants’ are lower or equal to EUR 60 000. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 156 If there are ongoing procedures such as audits, investigations or litigations, the evidence must be kept until these end, even if this is longer than five (or three) years. The rules in the GA do not affect national laws on keeping documents (which may require additional measures). 2. Original documents The beneficiaries must keep original documents. The Commission will accept any document considered an original under national law. Examples: The Commission will accept authenticated copies or digitally-signed documents, if national law accepts these as originals. The Commission will accept digitalised copies of documents (instead of hard copies), if this is acceptable under national law. In principle, documents should be kept in the format in which they were received or created. This means that:  documents received or created in paper form should be kept in paper form  documents received or created electronically should be kept in their electronic format. Hard copies of original electronic documents are not required. 3. Records for actual costs For actual costs, the beneficiaries must:  keep detailed records and other supporting documents to prove the eligibility of the costs declared  use cost accounting practices and internal control procedures that make it possible to verify that the amounts declared, amounts recorded in the accounts and amounts recorded in supporting documentation match up. Best practice: The information included in the financial statements for each budget category (i.e. personnel costs, other direct costs, indirect costs) must be broken down into details and must match the amounts recorded in the accounts and in supporting documentation. Examples: Costs declared as ‘personnel costs’ must be detailed per employee carrying out work for the action (individual hourly rate multiplied by the actual hours worked for the action). They must match the accounting records (i.e. general ledger transactions, annual financial statements) and supporting documentation (i.e. labour contracts, collective labour agreements, applicable national law on taxes, labour and social security contributions, payslips, time records, bank statements showing salary payments, etc.). For ‘other direct costs’, the beneficiary must keep a breakdown of costs declared by type (i.e. travel costs and related subsistence allowances, depreciation, costs of other goods and services etc.) It should provide details of individual transactions for each type of cost. For depreciation, it must provide details per individual equipment used for the action. Declared costs must match accounting records (i.e. general ledger transactions, annual financial statements) and supporting documentation (i.e. purchase orders, delivery notes, invoices, contracts, bank statements, asset usage logbook, depreciation policy, etc.). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 157 4. Records for unit costs set by the Commission For unit costs, the beneficiaries must keep:  detailed records and other supporting documents to prove the number of units declared. It is NOT necessary to keep records on the actual costs incurred. The Commission/Agency may access the accounting records, but will reject costs only if the number of units declared is incorrect. (The actual costs of the work are not relevant). If the Commission/Agency detects an irregularity or fraud in the action’s implementation, it may reduce the grant. 5. Records for unit costs calculated in accordance with the beneficiary’s usual cost accounting practices For personnel costs declared in accordance with their usual cost accounting practices (i.e. ‘average personnel costs’), the beneficiaries must keep detailed records and other supporting documents to:  show that the personnel costs used to calculate the unit cost (hourly rate) match the actual personnel costs as recorded in the statutory accounts Examples: accounting records, financial statement extracts, labour contracts, collective labour agreements, applicable national tax law, labour and social security contributions, pay slips, bank statements showing salary payments, classification of employees based on experience, qualifications, salary, department, etc. Manual interventions into the accounting data must be traceable and documented.  verify that the unit cost (hourly rate) is free of ineligible cost components Examples: records that show that the hourly rate does not include an indirect cost component (that should be covered by the 25 % flat rate); records that show that the hourly rate does not include travel costs (that should be claimed under ‘other direct costs’).  assess the acceptability of budgeted and estimated elements Example: records that show adjustments corresponding to the consumer price index which, according to the beneficiary’s usual remuneration policy, serves as the basis for annual salary increases.  verify the number of productive hours used to calculate the unit cost (hourly rate). It is NOT necessary to keep records on the actual personnel costs incurred per person. 6. Certificate on the methodology (CoMUC) What? To get additional assurance, a beneficiary/linked third parties may request that the Commission/Agency confirms that its cost accounting practices comply with the conditions set out in Article 6.2.A, by approving a certificate on its methodology (CoMUC). Approval concerns the cost accounting practices described and certified in the certificate on the methodology. If the Commission/Agency approves the CoMUC, it will not challenge the personnel unit costs (hourly rates) declared — unless information was concealed or fraud or corruption was used to obtain approval (or another methodology was applied). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 158 Approval is valid for all personnel costs declared according to these cost accounting practices, including costs declared before the Commission/Agency approval (if the beneficiary can show that they were declared according to the approved practices). Best practice: Beneficiaries should nevertheless keep detailed records and other supporting documents (to prove that their methodology complied with the rules, if necessary). Approval is valid for all H2020 grants (i.e. for the beneficiary’s usual cost accounting practices) and is not linked or limited to a specific grant. (It is NOT valid for FP7 grants and, conversely an FP7 certificates is NOT valid for Horizon 2020.) When? Beneficiaries may submit their requests for approval at any time — before or during the course of the grant. If the beneficiary changes its cost accounting practices, it must obtain a new certificate and submit a new request for approval to the Commission/Agency. If the beneficiary declares personnel costs according to the changed cost accounting practices before the new certificate is approved, it accepts to bear the risk that the changed practices are not compliant anymore and that the costs may be declared ineligible. How? The beneficiary must submit its certificate on the methodology to the Commission/Agency (via the following address: EC-H2020-UNIT-COST-METHODOLOGY-CERTIFICATION@ec.europa.eu). The certificate should be drawn up by an independent auditor using the template in Annex 6 to the GA (or an independent public officer, if the beneficiary is a public body). 7. Records for flat-rate costs For flat-rate costs, the beneficiaries must:  keep detailed records and other supporting documents to prove that the costs to which the flat rate is applied are eligible. Example: For the flat rate of 25 % of indirect costs, the auditors will verify (and the beneficiaries must be able to show) that: a) the actual direct costs are eligible, using the detailed records and supporting documents explained above; b) the following costs were excluded: subcontracting costs, the costs of resources made available by third parties not used on the beneficiary’s premises and financial support to third parties from the pool of actual direct eligible costs to which the flat rate applies. It is NOT necessary to keep records on the actual costs incurred. 8. Records for lump-sum costs For lump-sum costs, the beneficiaries must:  keep detailed records and other supporting documents to prove that the action tasks described in Annex 1 have been carried out in accordance with the GA. It is NOT necessary to keep records on the actual costs incurred. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 159 9. Records for personnel costs — Hours worked for the action The records for personnel costs depend on whether the person worked exclusively for the action or not. For persons who work exclusively for the action (regardless if they are full-time or part-time employees), the beneficiary may either:  sign a ‘declaration on exclusive work for the action’ (one per reporting period), to confirm that the person worked exclusively for the action, either:  during the whole reporting period or  during a an uninterrupted time-period, covering at least a full natural month within the reporting period. Intermittent (i.e. sporadic or random) periods of ‘exclusive’ dedication can NOT be subject of a declaration. If a person worked randomly for the action after an uninterrupted time-period covered by a declaration, time records are needed for the period of random work. Example: the person worked for the action exclusively from 15/02 to 31/05 and then worked again in the action some days in July and October and the full month of November. The declaration will cover the period from 15/02 to 31/05 and time records must be kept for the time the person worked for the action in July, October and November. The declaration must be dated and signed by the person concerned and her/his supervisor. Best practice: Beneficiaries should take a prudent approach and use this possibility only if it is planned that the person works exclusively on the action during a long and continuous period of time. If there are any doubts, a record of actual hours worked should be kept (e.g. time- sheets).  keep time records. Best practice: If the person works exclusively for the action during a full financial year, it is strongly recommended that the beneficiary signs the ‘declaration on exclusive work for the action’ (— even if the person keeps time records). In this way, the declaration can serve as evidence that that the person worked for the action all her/his annual productive hours. For persons who do NOT work exclusively for the action, the beneficiaries must:  show the actual hours worked, with reliable time records (i.e. time-sheets) either on paper or in a computer-based time recording system. Time records must be dated and signed at least monthly by the person working for the action and his/her supervisor. If the time recording system is computer-based, the signatures may be electronic (i.e. linking the electronic identity data (e.g. a password and user name) to the electronic validation data, with a documented and secure process for managing user rights and an auditable log of all electronic transactions). Time records should include:  the title and number of the action, as specified in the GA  the beneficiary’s full name, as specified in the GA Exclusive work or not matters only for the record-keeping. It has NO impact on the calculation of the costs to be declared (— in both cases they must be calculated through an hourly rate, per full financial year, etc.; see Article 6.2.A). . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 160  the full name, date and signature of the person working for the action  the number of hours worked for the action in the period covered by the time record; for reasons of assurance and legal certainty it is highly recommended that the number of hours is detailed per day (hours worked for the action in each day)  the supervisor’s full name and signature  a reference to the action tasks or work package described in Annex 1, to easily verify that the work carried out matches the work assigned and the person-months reported to the action  a brief description of the activities carried out, to understand and show what work was carried out. Information included in time-sheets must match records of annual leave, sick leave, other leaves and work-related travel. A template for time-sheets is available. (This template is not mandatory; beneficiaries may use their own model, provided that it fulfils the minimum conditions and it contains at least the information detailed above.) If time records are not reliable, the Commission/Agency may exceptionally accept ‘alternative evidence’ if it proves the number of hours worked on the action with a similar (or at least satisfactory) level of assurance (assessed against generally-accepted audit standards). Examples of possible alternative evidence (non-exhaustive list): travel documents proving participation in a project meeting (boarding pass, obliterated travel ticket, hotel invoice, etc.); agenda and minutes of the meeting; attendance lists; working papers; laboratory log books; professional/personal diaries; documents related to presentations; scientific publications; correspondence such as letters, notes, memos, emails; etc. The auditors will use the following three criteria to assess how credible the alternative evidence is: 1. Clear identification of the person concerned 2. Clear link to the project under scrutiny 3. Possibility to quantify time spent on project-related tasks. Alternative evidence will only be accepted if these three criteria are met. Example (acceptable alternative evidence): A researcher submits the following email as alternative evidence: ‘I hereby send you the results of the analysis of project XYZ that I have been working on for the last two weeks.’ Criterion 1 is met – the sender of the email is the person concerned; Criterion 2 is met – the project is identified as XYZ; Criterion 3 is met – the time is quantified: two weeks. Example (not acceptable alternative evidence): A beneficiary submits the following email as alternative evidence: ‘I hereby send you the results of the analysis recently carried out by my team.’ Criterion 1 is not met – it is unclear who the person concerned is; the team members and their contributions are unknown; Criterion 2 is not met: the project name is not mentioned; Criterion 3 is not met – the time is not quantified. The Commission/Agency has full discretion to accept or refuse the alternative evidence and there is no entitlement to it. Beneficiaries that rely on alternative evidence bear the full risk of refusal and rejection of costs by the Commission/Agency. . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 161 10. Records of (linked) third parties The beneficiaries must ensure that linked third parties comply with the same obligations in terms of keeping appropriate and sufficient evidence. Example: Linked third parties that carry out work themselves must document all their costs in the same way the beneficiaries do. However, it is the beneficiary who must keep the original financial statements and the certificates on financial statements of the linked third parties. The beneficiaries must also ensure that they keep appropriate and sufficient evidence related to third parties that made in-kind contributions and to subcontractors. Examples: The beneficiaries must keep evidence of third parties’ actual direct costs if there are in-kind contributions, either free of charge or against payment. Alternatively, they may ensure that the third parties keep the evidence. The beneficiaries must keep evidence showing that subcontractors fulfilled their obligations in terms of the visibility of EU funding. Alternatively, they may ensure that the subcontractors keep this evidence. Specific case (records of linked third parties): Financial statements and certificates on the financial statements (CFS) — It is the beneficiary that must keep the originals of the financial statements and the certificates on the financial statements of the linked third parties. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 162 ARTICLE 19 — SUBMISSION OF DELIVERABLES 1. Deliverables What & When? The coordinator must submit the deliverables identified in Annex 1, in accordance with the timing and conditions set out in that Annex. ‘Deliverables’ are additional outputs (e.g. information, special report, a technical diagram brochure, list, a software milestone or other building block of the action) that must be produced at a given moment during the action (normally not at the same time as the periodic/final reports). (‘Milestones’ are, by contrast, control points in the action that help to chart progress. They may correspond to the completion of a key deliverable, allowing the next phase of the work to begin or be needed at intermediary points) The deliverables that must be produced are listed in a specific section of Annex 1 to the GA (‘list of deliverables’). Example: For actions under Part III, ‘Secure, clean and efficient energy’ involving energy efficiency measures in buildings, the beneficiaries must deliver a ‘handover certificate’ at the same time as their periodic reports. This certificate must prove the actual specifications of the buildings constructed or refurbished, their surface area and address. It must be signed by a member of the consortium. How? The coordinator must submit them via the Participant Portal (see Article 52) — unless Annex 1 specifies another way. Specific cases (deliverables): Classified results — If the deliverables are classified results, they may only be submitted to the Commission/Agency via means (electronic or not) that have been approved (see Article 37). ARTICLE 19 — SUBMISSION OF DELIVERABLES 19.1 Obligation to submit deliverables The coordinator must submit the ‘deliverables’ identified in Annex 1, in accordance with the timing and conditions set out in it. 19.2 Consequences of non-compliance If a beneficiary breaches any of its obligations under this Article, the [Commission][Agency] may apply any of the measures described in Chapter 6. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 163 ARTICLE 20 — REPORTING — PAYMENT REQUESTS ARTICLE 20 — REPORTING — PAYMENT REQUESTS 20.1 Obligation to submit reports The coordinator must submit to the [Commission][Agency] (see Article 52) the technical and financial reports set out in this Article. These reports include the requests for payment and must be drawn up using the forms and templates provided in the electronic exchange system (see Article 52). 20.2 Reporting periods The action is divided into the following ‘reporting periods’: - RP1: from month 1 to month [X] [- RP2: from month [X+1] to month [Y] - RP3: from month [Y+1] to month [Z] [same for other RPs] - RPN: from month [N+1]to [the last month of the project].] 20.3 Periodic reports — Requests for interim payments The coordinator must submit a periodic report within 60 days following the end of each reporting period. The periodic report must include the following: (a) a ‘periodic technical report’ containing: (i) an explanation of the work carried out by the beneficiaries; (ii) an overview of the progress towards the objectives of the action, including milestones and deliverables identified in Annex 1. This report must include explanations justifying the differences between work expected to be carried out in accordance with Annex 1 and that actually carried out. The report must also detail the exploitation and dissemination of the results and — if required in Annex 1 — an updated ‘plan for the exploitation and dissemination of the results’; [OPTION for providing access to trans-national access to research infrastructure: The report must detail the access activity, indicating the members of the selection panel, the selection procedure, the exact amount of access provided to the user groups, the description of their work, and information on the users (including names, nationality and home institutions);] [OPTION for providing access to virtual services: The reports must detail the access activity, with statistics on the virtual access provided in the period, including quantity, geographical distribution of users and, whenever possible, information/statistics on scientific outcomes (publications, patents, etc.) acknowledging the use of the infrastructure;] (iii) a summary for publication by the [Commission][Agency]; (iv) the answers to the ‘questionnaire’, covering issues related to the action implementation and the economic and societal impact, notably in the context of the Horizon 2020 key performance indicators and the Horizon 2020 monitoring requirements; H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 164 (b) a ‘periodic financial report’ containing: (i) an ‘individual financial statement’ (see Annex 4) from each beneficiary [and from each linked third party], for the reporting period concerned. The individual financial statement must detail the eligible costs (actual costs, unit costs and flat-rate costs [and lump sum costs]; see Article 6) for each budget category (see Annex 2). The beneficiaries [and linked third parties] must declare all eligible costs, even if — for actual costs, unit costs and flat-rate costs — they exceed the amounts indicated in the estimated budget (see Annex 2). Amounts which are not declared in the individual financial statement will not be taken into account by the [Commission][Agency]. If an individual financial statement is not submitted for a reporting period, it may be included in the periodic financial report for the next reporting period. The individual financial statements of the last reporting period must also detail the receipts of the action (see Article 5.3.3). Each beneficiary [and each linked third party] must certify that: - the information provided is full, reliable and true; - the costs declared are eligible (see Article 6); - the costs can be substantiated by adequate records and supporting documentation (see Article 18) that will be produced upon request (see Article 17) or in the context of checks, reviews, audits and investigations (see Article 22), and - for the last reporting period: that all the receipts have been declared (see Article 5.3.3); (ii) an explanation of the use of resources and the information on subcontracting (see Article 13) and in-kind contributions provided by third parties (see Articles 11 and 12) from each beneficiary [and from each linked third party], for the reporting period concerned; (iii) [OPTION if the JRC is a beneficiary: information on the amount of each interim payment and payment of the balance to be paid by the [Commission][Agency] to the Joint Research Centre (JRC);][OPTION: not applicable;] (iv) a ‘periodic summary financial statement’, created automatically by the electronic exchange system, consolidating the individual financial statements for the reporting period concerned and including — except for the last reporting period — the request for interim payment. 20.4 Final report — Request for payment of the balance In addition to the periodic report for the last reporting period, the coordinator must submit the final report within 60 days following the end of the last reporting period. The final report must include the following: (a) a ‘final technical report’ with a summary for publication containing: (i) an overview of the results and their exploitation and dissemination; (ii) the conclusions on the action, and (iii) the socio-economic impact of the action; H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 165 (b) a ‘final financial report’ containing: (i) a ‘final summary financial statement’, created automatically by the electronic exchange system, consolidating the individual financial statements for all reporting periods and including the request for payment of the balance and (ii) a ‘certificate on the financial statements’ (drawn up in accordance with Annex 5) for each beneficiary [and for each linked third party], if it requests a total contribution of EUR 325 000 or more, as reimbursement of actual costs and unit costs calculated on the basis of its usual cost accounting practices (see Article 5.2 and Article 6.2, Point A). 20.5 Information on cumulative expenditure incurred [OPTION for big grants with reporting periods beyond 18 months 37 : In addition to the reporting requirements set out above (Article 20.1 to 20.3), the coordinator must inform the [Commission][Agency] by [31 December][30 November] each year of the cumulative expenditure incurred by the beneficiaries from the start date of the action. This information is required for the Commission’s accounting purposes and will not be used to calculate the final grant amount.] [OPTION: Not applicable] 20.6 Currency for financial statements and conversion into euro Financial statements must be drafted in euro. Beneficiaries [and linked third parties] with accounting established in a currency other than the euro must convert the costs recorded in their accounts into euro, at the average of the daily exchange rates published in the C series of the Official Journal of the European Union, calculated over the corresponding reporting period. If no daily euro exchange rate is published in the Official Journal of the European Union for the currency in question, they must be converted at the average of the monthly accounting rates published on the Commission’s website, calculated over the corresponding reporting period. Beneficiaries [and linked third parties] with accounting established in euro must convert costs incurred in another currency into euro according to their usual accounting practices. 20.7 Language of reports All reports (technical and financial reports, including financial statements) must be submitted in the language of the Agreement. 20.8 Consequences of non-compliance — Suspension of the payment deadline — Termination If the reports submitted do not comply with this Article, the [Commission][Agency] may suspend the payment deadline (see Article 47) and apply any of the other measures described in Chapter 6. If the coordinator breaches its obligation to submit the reports and if it fails to comply with this obligation within 30 days following a written reminder sent by the [Commission][Agency], the Agreement may be terminated (see Article 50). 37 To be added in the case of grants of mare than EUR 5 million for which a pre-financing is paid and the reporting periods for interim payments or payments of the balance exceed eighteen months. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 166 1. Reports When & What? In order to receive payments, the beneficiaries (and their linked third parties) must report on the (technical and financial) implementation of action (‘reporting’). The coordinator must submit both:  a ‘periodic report’ after the end of each reporting period (including the last one) and  a ‘final report’ at the end of the action. Each report should be seen as a single package, composed of several parts, i.e.:  a (periodic or final) technical report The periodic technical report includes an explanation of work carried out, an overview of progress, a publishable summary and a questionnaire. The final technical report is a publishable summary of the entire action (describing the overview of the results and their exploitation and dissemination, the conclusions on the action and its socio-economic impact).  a (periodic or final) financial report. The periodic financial report includes the individual financial statements, an explanation of the use of resources and the periodic summary financial statement. The final financial report consists of the final summary financial statement that is automatically created by the IT system. In some cases (and for some beneficiaries/linked third parties) it must be accompanied by a certificate on the financial statements (one certificate per beneficiary/linked third party). The financial reports also contain the requests for payment (necessary for any payment other than the pre-financing payment). The periodic report for the last reporting period covers only the last period, while the final report must give an overview of the action’s results over its entire duration. Forms and templates for the different parts of the reports are available in the electronic exchange system. Costs related to reporting may be eligible (see Article 6.2.D.3). How? Each (periodic or final) report must be prepared by the coordinator and the beneficiaries together, by filling out the forms directly in the Participant Portal). List of documents for the periodic reports:  explanation of the work carried out  overview of the progress These ‘reports’ must be distinguished from ‘deliverables’ (that are part of Annex 1; see Article 19) and ‘milestones’ (that may be part of Annex 1, but are normally neither covered by Article 19 nor by Article 20). . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 167  updated plan for the exploitation and dissemination of results (if necessary)  summary for publication  questionnaire (i.e. the structured information requested)  individual financial statements for each beneficiary and linked party  explanation on the use of resources  information on amounts to be paid to the Joint Research Centre (JRC) (if necessary). List of documents for the final report:  final summary for publication  certificates on the financial statements (CFS) (if necessary). Generally, the documents can be drafted together (i.e. by several users from different beneficiaries). Some forms are continuously open and can be updated at any moment (e.g. questionnaire, publishable summary). Some are linked, so that they must be filled out together (e.g. the financial statement and the explanation on the use of resources: for each cost declared in the financial statement, a box will pop up asking the beneficiary to give an explanation of the cost, link it to the relevant work package(s) and justify the expense if necessary). Individual financial statements must be filled out by each beneficiary (individually), and then signed and formally submitted to the coordinator (via the electronic exchange system). This includes the coordinator, who must also submit its individual financial statement. For linked third parties, the financial statements must be filled out and submitted by their beneficiary. The linked third parties can NOT view their grants in the electronic exchange system and therefore have no access to them. Before submission, the beneficiary must complete the data for the linked third party (based on the information it received from the linked third party). The beneficiary then prints the financial statement and sends it to the linked third party, for signature (on paper) and return (by registered post with proof of delivery). The beneficiary must keep the original in its files and must ensure that the data encoded in the electronic exchange system is correct (i.e. identical to the signed paper version). If a beneficiary cannot submit its individual financial statement on time, the report can be submitted without this financial statement. The costs will be considered ‘zero’ for this reporting period, but the beneficiary can declare its costs with the next financial report (for the next reporting period). The coordinator will be asked to confirm the non-submission, when submitting the report. If a beneficiary fails to submit its financial statement for the last reporting period, the Commission/Agency may suspend the payment deadline (see Article 47). The certificates on the financial statements (CFS) must be submitted (by the coordinator) as scanned copy (PDF) together with the financial statement for the last reporting period of the beneficiary concerned. The beneficiary must keep the signed original in its files. Once completed, the (periodic or final) report must be submitted by the coordinator (CoCo) (with all its parts, as a single package; ‘single submission’). When a report is submitted, the other beneficiaries are automatically informed by the system. If the Commission/Agency considers the report incomplete or not in compliance with the conditions of this Article, it will suspend the payment deadline (see Article 47). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 168 In this case, the Commission/Agency will send back the report to the coordinator (through the electronic exchange system), as a single package, together with a notification letter that explains the reasons and requests modifications and/or clarification(s) (‘single suspension’). The coordinator (CoCo) must then re-submit the corrected report, as a single package, within the deadline specified (‘single re-submission’). The re-submission re-starts the payment deadline (remaining time, taking account of the time used before suspension). 2. Reporting periods Each action is divided into reporting periods. The length of the reporting periods is set out in the GA. As a general rule, reporting periods last 18 months. The number of reporting periods is also set out in the GA, and depends on the action duration. Normally it is determined as follows: Duration in months Max. number of periods 1 to 18 1 19 to 36 2 37 to 54 3 55 to 72 4 73 to 90 5 3. Periodic technical report: Explanation of the work carried out — Overview of the progress — Summary for publication — Questionnaire The explanation of the work carried out and the overview of the progress should show how the action is being implemented and what has already been achieved (as compared to the objectives, milestones and deliverables described in Annex 1). The coordinator must check if all deliverables due for the period have been submitted. If work planned was not carried out, the beneficiaries must explain why. The overview of the progress must also describe how achieved results are exploited and disseminated and include an updated ‘plan for the exploitation and dissemination of the results’ (if such a plan is foreseen in Annex 1). Technical reports should not contain any information that is ‘EU classified’ under the Commission internal Rules of Procedure (see also Article 37, the Online Manual and the Guidance — Guidelines for the classification of research results). The summary must give a brief description of the action, presenting its objectives and the results achieved (in an ‘easy to read’ way, understandable for a non-specialist audience). The summary must be fit for publication, so that the Commission/Agency can publish it on its website right away. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 169 If needed, the Commission/Agency may make changes to the summary and publish it (after having given the coordinator the opportunity to comment). The coordinator must ensure that none of the material submitted for publication includes confidential or ‘EU classified’ information. The questionnaire must be filled out to provide the Commission/Agency with regular up-to-date information for monitoring the action (and ultimately the Horizon 2020 Framework Programme). The questionnaire consists in structured information on:  performance indicators (defined in Annex II to the Horizon 2020 Specific Programme)  information to monitor the implementation of Horizon 2020 on ‘cross–cutting issues’ (see Annex III to the Specific Programme) and to assess the progress of Horizon 2020 against the objectives defined for the ‘societal challenges’ (see Article 3 and Annex I to the Specific Programme). It is designed in a modular way, consisting as much as possible of structured questions, by topic (e.g. publications, patents, innovation, etc.). 4. Periodic financial report: Individual financial statements — Explanation of the use of resource — Summary financial statement The individual financial statements (see Annex 4) must contain all costs that:  were incurred by the beneficiary/linked third parties during the reporting period AND  fulfil the eligibility conditions set out in Article 6. Beneficiaries may declare costs incurred during a previous reporting period, if they were not declared before. The costs of linked third parties must NOT be included in the beneficiary’s financial statements; linked third parties must fill out their own financial statements. For the last reporting period, beneficiaries also have to declare the receipts for the action (see Article 5.3.3). The explanation of the use of resources must be consistent with the costs declared in the financial statement per beneficiary. The summary financial statement is created automatically by the IT system (with consolidated data from all individual financial statements for all beneficiaries and linked third parties, for the reporting period). Beneficiaries/linked third parties should declare ALL their eligible costs — even if they are above the estimated budget in Annex 2 (‘cost overruns’). The EU contribution will be capped at the maximum grant amount, but cost overruns may turn out useful, if the Commission/Agency should reject some of the costs (at payment or later on). . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 170 5. Final technical report: Summary for publication The final technical report is a summary for publication that should present an overview of the results, their exploitation and dissemination, the action’s conclusions and its socio-economic impact. The final summary must cover the whole action Like the summaries for the periodic reports, the final summary must be written in an ‘easy to read’ way and be understandable for a non-specialist audience. The coordinator must ensure that none of the material submitted for publication includes confidential or ‘EU classified’ information. The summary should include:  an up-to-date link to the action’s website  project logos, diagrams, photographs and videos illustrating the work of the action (if available)  the final version of the ‘plan for the exploitation and dissemination of the results’ (if such a plan is foreseen in Annex 1). It may also include a list of all beneficiaries, with contact names (if this information should be published). 6. Final financial report: Final summary financial statement — Certificates on the financial statements (CFS) The final summary financial statement is automatically created by the system (consolidating the data from all individual financial statements for all beneficiaries and linked third parties, for all reporting periods). The final summary financial statement will be the basis for calculating the payment of the balance (see Article 21.4). Some beneficiaries/linked third parties must submit a certificate on the financial statement (CFS). Such a certificate is needed if the beneficiary/linked third party requests a total financial contribution of EUR 325 000 (or more) as reimbursement for actual costs and personnel costs declared on the basis of unit costs calculated according to its usual accounting practices (i.e. ‘average personnel costs’). This means that costs based on lump sums, flat-rates (e.g. indirect costs) or unit costs (other than those for personnel costs calculated according to the beneficiary’s usual cost accounting practices) are not counted for the EUR 325 000 threshold (and do not need to be covered by the certificate). Example: A is a beneficiary in a H2020 action which declared the following total eligible costs for the action:  average personnel costs = EUR 250 000  subcontracting costs = EUR 40 000  depreciation costs of equipment used to carry out the action = EUR 60 000  indirect costs (25 % flat rate) = EUR 77 500  total eligible costs claimed by A = EUR 427 500 The reimbursement rate is 100%. As the amount of eligible actual costs and average personnel costs incurred by A (and hence the corresponding EU contribution) is higher than EUR 325 000, A must submit a CFS for the following costs: H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 171 Type of cost Direct personnel costs Subcontracting costs Other direct costs Indirect costs Total costs covered by the CFS Costs covered by the CFS 250 000 40 000 60 000 0 350 000 If a certificate is required, all costs declared as actual costs or average personnel costs must be covered by the certificate. Incomplete certificates will be returned for correction. However, costs previously audited by the Commission/Agency do not have to be covered again by the certificate. Example: A beneficiary participates in a H2020 action with three reporting periods. During the second reporting period the Commission's auditors carry out an audit of the costs incurred by the beneficiary in the first reporting period. At the end of the action, the beneficiary requests a total contribution of EUR 425 000 and has to submit a CFS with the final reports. In this case, the CFS may exclude the costs of the first reporting period (which were already covered by the Commission audit). Linked third parties must submit a certificate if it (on its own, without its beneficiary) reaches the EUR 325 000 threshold. Certificates submitted before the EUR 325 000 threshold is reached will be rejected by the Commission/Agency. Beneficiaries/linked third parties may submit either one certificate per reporting period or a single CFS for the whole action. In both cases, the certificate may only be submitted with the final financial report. The Commission/Agency will not accept certificates submitted at any other moment (and costs incurred for those certificates will not be considered eligible, because not necessary). The certificate must be issued by an external auditor, using the template in Annex 5. Only qualified auditors may issue a certificate. ‘Qualified’ means qualified in accordance with national legislation implementing Directive 2006/43/EC47 (or any EU legislation that replaces this Directive). The auditor must certify that the costs declared in the financial statement are accurately recorded in the beneficiary’s accounting system and eligible and that all receipts have been declared. If the auditor cannot confirm (for any reason), s/he must explain this in detail in the certificate. The Commission/Agency will consider the explanation in light of the facts provided by the auditor, and decide on steps to take. Specific cases (certificates on the financial statements): Public bodies — For public bodies, the certificate may be issued by an independent public officer with formal competence to audit the beneficiary/linked third party (instead of by an external auditor). 47 Directive 2006/43/EC of the European Parliament and of the Council of 17 May 2006 on statutory audits of annual accounts and consolidated accounts, amending Council Directives 78/660/EEC and 83/349/EEC and repealing Council Directive 84/253/EEC (OJ L 157, 9.6.2006, p. 87). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 172 International organisations — For international organisations, it can be an internal or external auditor that is appointed in accordance with the internal financial regulations and procedures of the organisation. Beneficiaries/linked third parties from a third country — Beneficiaries/linked third parties established in a third country must provide a certificate that complies with national regulations in the field. Auditors qualified in the EU may provide certificates for beneficiaries established in third countries, if they are familiar with the relevant national regulations (national accounting rules) and comply with them when preparing the certification. 7. Information on cumulative expenditure incurred This option will be inserted in the GA for grants of more than EUR 5 million, for which pre- financing is paid and where the reporting period for interim payments or payment of the balance exceeds 18 months. 8. Currency for financial statements and conversion into euro Beneficiaries (and linked third parties) must always use euros, to report costs in their financial statements. The rules on conversion (of costs incurred in other currencies into euros) are as follows:  for beneficiaries/linked third parties with accounting records in euros: conversion of costs according to their usual accounting practices  for beneficiaries/linked third parties with accounting records in a currency other than the euro: conversion of costs recorded in their accounts by one of the following:  daily euro exchange rate is published in the C series of the Official Journal of the European Union for the currency in question: using the average of the daily exchange rates published over the corresponding reporting period. To calculate this rate, the beneficiaries may use the editable charts on the ECB website48. Procedure for calculating the rate on the ECB website: Step 1 — Go to the ECB website. Step 2 — Click on the chart icon [ ] for the currency. Step 3 — Choose the ‘HTML5 version’ which appears under the name of the currency in the top-left corner. Step 4 — Insert the starting date of the reporting period in the field ‘from’ and the end date of the reporting period in the field ‘to’. The average for the period will appear above the chart. Example: A Romanian university with accounting in New Romanian Leu (RON) is the beneficiary of a GA with one reporting period, from 24.1.2013 to 23.1.2014. The costs incurred in RON during this period are RON 500 000. The university will convert its costs into euros at the average rate of RON 4 .4274 for EUR 1 (established following the steps mentioned above). The university will report costs of EUR 112 933, 10 (RON 500 000 / RON 4 .4274 * EUR 1).  if NO daily euro exchange rate is published: using the average of the monthly accounting rates over the corresponding reporting period, using the currency converter on the Commission’s website49. 48 Available at http://www.ecb.europa.eu/stats/exchange/eurofxref/html/index.en.html H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 173 Example: A Moldovan university with accounting in Moldovan Lei (MDL) is the beneficiary of a GA with one reporting period, from 24.01.2013 to 23.01.2014. The costs incurred in MDL during this period are MDL 500 000. The university will calculate the average of the 13 monthly exchange rates (January 2013 until January 2014) published on the Commission’s website. This average rate is MDL 16 .7531 for EUR 1. The university will report costs of EUR 29 845, 22 (MDL 500 000 / MDL 16 .7531 * EUR 1). 9. Language of reports The reports must be drafted in the language of the GA (indicated at the end of the GA, next to the signatures of the parties). 10. Suspension of the payment deadline — Termination If the coordinator breaches its obligation to submit the reports, the Commission/Agency may decide to:  suspend the payment deadline (see Article 47)  terminate the GA if the coordinator continues to breach its obligations after a written reminder (see Article 50). It may also lead to a recovery of payments already made. 49 Available at http://ec.europa.eu/budget/contracts_grants/info_contracts/inforeuro/inforeuro_en.cfm H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 174 ARTICLE 21 — PAYMENTS AND PAYMENT ARRANGEMENTS ARTICLE 21 — PAYMENTS AND PAYMENT ARRANGEMENTS 21.1 Payments to be made The following payments will be made to the coordinator: - one pre-financing payment; - one or more interim payments, on the basis of the request(s) for interim payment (see Article 20), and - one payment of the balance, on the basis of the request for payment of the balance (see Article 20). 21.2 Pre-financing payment — Amount — Amount retained for the Guarantee Fund The aim of the pre-financing is to provide the beneficiaries with a float. It remains the property of the EU until the payment of the balance. The amount of the pre-financing payment will be EUR [insert amount (insert amount in words)]. The [Commission][Agency] will — except if Article 48 applies — make the pre-financing payment to the coordinator within 30 days, either from the entry into force of the Agreement (see Article 58) or from 10 days before the starting date of the action (see Article 3), whichever is the latest. An amount of EUR [insert amount (insert amount in words)], corresponding to 5% of the maximum grant amount (see Article 5.1), is retained by the [Commission][Agency] from the pre-financing payment and transferred into the ‘Guarantee Fund’ [OPTION if the JRC is a beneficiary: Moreover, the part of the pre-financing payment related to the Joint Research Centre (JRC) ([insert amount (insert amount in words)] is not paid to the coordinator, but kept by the [Commission][Agency] for the JRC.] 21.3 Interim payments — Amount — Calculation Interim payments reimburse the eligible costs incurred for the implementation of the action during the corresponding reporting periods. The [Commission][Agency] will pay to the coordinator the amount due as interim payment within 90 days from receiving the periodic report (see Article 20.3), except if Articles 47 or 48 apply. Payment is subject to the approval of the periodic report. Its approval does not imply recognition of the compliance, authenticity, completeness or correctness of its content. The amount due as interim payment is calculated by the [Commission][Agency] in the following steps: Step 1 — Application of the reimbursement rates Step 2 — Limit to 90 % of the maximum grant amount 21.3.1 Step 1 — Application of the reimbursement rates The reimbursement rate(s) (see Article 5.2) are applied to the eligible costs (actual costs, unit costs and flat-rate costs [and lump sum costs]; see Article 6) declared by the beneficiaries [and the linked third parties] (see Article 20) and approved by the [Commission][Agency] (see above) for the concerned reporting period. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 175 21.3.2 Step 2 — Limit to 90% of the maximum grant amount The total amount of pre-financing and interim payments must not exceed 90% of the maximum grant amount set out in Article 5.1. The maximum amount for the interim payment will be calculated as follows: {90% of the maximum grant amount (see Article 5.1) minus {pre-financing and previous interim payments}}. 21.4 Payment of the balance — Amount — Calculation — Release of the amount retained for the Guarantee Fund The payment of the balance reimburses the remaining part of the eligible costs incurred by the beneficiaries for the implementation of the action. If the total amount of earlier payments is greater than the final grant amount (see Article 5.3), the payment of the balance takes the form of a recovery (see Article 44). If the total amount of earlier payments is lower than the final grant amount, the [Commission][Agency] will pay the balance within 90 days from receiving the final report (see Article 20.4), except if Articles 47 or 48 apply. Payment is subject to the approval of the final report. Its approval does not imply recognition of the compliance, authenticity, completeness or correctness of its content. The amount due as the balance is calculated by the [Commission][Agency] by deducting the total amount of pre-financing and interim payments (if any) already made, from the final grant amount determined in accordance with Article 5.3: {final grant amount (see Article 5.3) minus {pre-financing and interim payments (if any) made}}. At the payment of the balance, the amount retained for the Guarantee Fund (see above) will be released and: - if the balance is positive: the amount released will be paid in full to the coordinator together with the amount due as the balance; - if the balance is negative (payment of the balance taking the form of recovery): it will be deducted from the amount released (see Article 44.1.2). If the resulting amount: - is positive, it will be paid to the coordinator - is negative, it will be recovered. The amount to be paid may however be offset — without the beneficiary’s consent — against any other amount owed by the beneficiary to [Agency, the] Commission or an[other] executive agency (under the EU or Euratom budget), up to the maximum EU contribution indicated, for that beneficiary, in the estimated budget (see Annex 2). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 176 21.5 Notification of amounts due When making payments, the [Commission][Agency] will formally notify to the coordinator the amount due, specifying whether it concerns an interim payment or the payment of the balance. For the payment of the balance, the notification will also specify the final grant amount. In the case of reduction of the grant or recovery of undue amounts, the notification will be preceded by the contradictory procedure set out in Articles 43 and 44. 21.6 Currency for payments The [Commission][Agency] will make all payments in euro. 21.7 Payments to the coordinator — Distribution to the beneficiaries Payments will be made to the coordinator. Payments to the coordinator will discharge the [Commission][Agency] from its payment obligation. The coordinator must distribute the payments between the beneficiaries without unjustified delay. Pre-financing may however be distributed only: (a) if the minimum number of beneficiaries set out in the call for proposals has acceded to the Agreement (see Article 56) and (b) to beneficiaries that have acceded to the Agreement (see Article 56). 21.8 Bank account for payments All payments will be made to the following bank account: Name of bank: […] Address of branch: […] Full name of the account holder: […] Full account number (including bank codes): […] [IBAN code: […]] 38 21.9 Costs of payment transfers The cost of the payment transfers is borne as follows: - the [Commission][Agency] bears the cost of transfers charged by its bank; - the beneficiary bears the cost of transfers charged by its bank; - the party causing a repetition of a transfer bears all costs of the repeated transfer. 21.10 Date of payment Payments by the [Commission][Agency] are considered to have been carried out on the date when they are debited to its account. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 177 1. Payments The Commission/Agency will make the following payments to the coordinator:  a pre-financing payment at the beginning of the action (to provide beneficiaries with cash to start working on the project and continue until the first interim payment) Pre-financing will NOT be paid before:  the GA is signed (even if the action starts prior to that)  10 days before the action starting date. Example: A GA is signed by the coordinator on 30 December 2014 and by the Commission on 5 January 2015. The action starting date would normally be 1 February 2015, but the consortium has requested a fixed starting date of 1 September 2014 in its proposal, as the action is a continuation of a previous FP7 project. After due consideration, the fixed starting date is approved. The pre-financing must be paid by 5 February 2015 (i.e. 30 days from the entry into force of the GA).  interim payment(s) to cover eligible costs incurred in the reporting periods (as many interim payments as number of reporting periods)  the payment of the balance after the end of the action. 21.11 Consequences of non-compliance 21.11.1 If the [Commission][Agency] does not pay within the payment deadlines (see above), the beneficiaries are entitled to late-payment interest at the rate applied by the European Central Bank (ECB) for its main refinancing operations in euros (‘reference rate’), plus three and a half points. The reference rate is the rate in force on the first day of the month in which the payment deadline expires, as published in the C series of the Official Journal of the European Union. If the late-payment interest is lower than or equal to EUR 200, it will be paid to the coordinator only upon request submitted within two months of receiving the late payment. Late-payment interest is not due if all beneficiaries are EU Member States (including regional and local government authorities or other public bodies acting on behalf of a Member State for the purpose of this Agreement). Suspension of the payment deadline or payments (see Articles 47 and 48) will not be considered as late payment. Late-payment interest covers the period running from the day following the due date for payment (see above), up to and including the date of payment. Late-payment interest is not considered for the purposes of calculating the final grant amount. 21.11.2 If the coordinator breaches any of its obligations under this Article, the grant may be reduced (see Article 43) and the Agreement or the participation of the coordinator may be terminated (see Article 50). Such breaches may also lead to any of the other measures described in Chapter 6. 38 BIC or SWIFT code applies to for countries if the IBAN code does not apply. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 178 The payments are made to the coordinator; the beneficiaries are not paid individually. The coordinator must distribute the amounts received to the beneficiaries — without delay (see Article 21.7). How and when the payments are distributed is in principle an internal matter for the consortium. The consortium agreement may set out, for instance, specific periods for the distribution of payments or that the distribution will be carried out in instalments (and these will not be considered ‘unjustified delays’, if the arrangements set out in the consortium agreement are complied with). Similarly, the consortium agreement may provide for a distribution of the funding which is different from the costs claimed. Also, if the coordinator does NOT comply with its obligations, this is in principle an issue to be resolved within the consortium. It is only at termination of the participation of the coordinator that the Guarantee Fund may exceptionally intervene (see Article 50). The Commission/Agency will be informed of the distribution of the payments by the coordinator:  if it specifically requests this  in the event of recovery at the payment of the balance (see Article 44)  if the participation of one or more beneficiary is terminated (see Article 50). The Commission/Agency will notify the coordinator of the amount due, explaining which costs have been accepted and which have been rejected (if applicable; see Articles 42, 43 and 44). 2. Amount of the pre-financing payment There is no standard amount (or percentage) for the pre-financing payment; the amount is fixed in each GA. Normally it will be (depending on the availability of budget credits) up to 100 % of the average EU funding per period (i.e. maximum grant amount set out in Article 5.1 / number of periods) for actions with at least two reporting periods. (It will be however less for actions with only one reporting period, since 100 % would mean the totality of the grant amount.) At the moment of the pre-financing, an amount that corresponds to 5 % of the maximum grant amount (see Article 5.1) is deducted from the pre-financing payment and transferred to the Guarantee Fund. Example: Maximum grant amount: EUR 1 000 000 with 100 % reimbursement rate Pre-financing: EUR 333 334 of which: EUR 283 334 transferred to the consortium (coordinator) EUR 50 000 kept by the Commission for the Guarantee Fund. For the Commission’s Joint Research Centre (JRC), the Commission/Agency keeps the share of the pre-financing (based on the estimated budget of the Annex 2 in proportion of JRC weight in the total grant) and does not pay it out to the coordinator. Any payment (i.e. pre-financing, interim payments and payment of the balance) may be offset against debts of the beneficiaries towards the Commission/Agency or another executive agency — without the consent of the beneficiary concerned and up to the ‘maximum EU contribution’ foreseen for that beneficiary in Annex 2 (see also Article 44). . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 179 Example: Four beneficiaries: A, B, C and JRC, with a maximum grant amount of EUR 1 000 000. Estimated budget by beneficiary (Annex 2): A: EUR 300 000; B: EUR 250 000; C: EUR 300 000; JRC: EUR 150 000 Pre-financing: EUR 400 000, of which EUR 50 000 (5% of maximum grant amount) kept for the Guarantee Fund and EUR 350 000 transferred to the consortium. JRC share of grant: 15 % (150000/1 000 000) JRC share of pre-financing (kept by the Commission/Agency): 15 % of 350 000 = EUR 52 500 Pre-financing payment to coordinator for beneficiaries A, B, C: EUR 350 000 — EUR 52 500 = EUR 297 500 Pre-financing funds remain EU property until they are ‘cleared’ against eligible costs accepted by the Commission/Agency. 3. Amount of interim payments The amount of the interim payments will be calculated by the Commission/Agency (on the basis of the costs declared in the financial statement). Procedure for calculating interim payments: Step 1 — Rejection of ineligible costs and application of the reimbursement rate(s) Ineligible costs (i.e. costs that do not comply with one or more cost eligibility conditions; see Article 6) will be rejected (i.e. not approved). If, for innovation actions, there are different reimbursement rates for different beneficiaries, the Commission/Agency will apply the reimbursement rate for each beneficiary to the costs it has approved for that beneficiary. Step 2 — The interim payment is limited to 90 % of the maximum grant amount minus the pre- financing Example for calculating interim payments: Grant with three beneficiaries (A, B and C) and three reporting periods. Maximum grant amount: EUR 1 000 000 and 100% reimbursement rate. Pre-financing of EUR 333 334. Costs declared by the consortium at end of the first reporting period: EUR 500 000 (direct costs) + EUR 125 000 (25% flat rate for indirect costs) = € 625 000. After checking the reports, the Commission finds that EUR 20 000 of the direct costs claimed by beneficiary A and EUR 12 000 of those claimed by beneficiary B are not eligible and therefore rejects them. (The Commission rejects EUR 32 000 direct costs + EUR 8 000 flat rate for indirect costs = EUR 40 000). Total costs accepted by the Commission at the end of the first period: EUR 585 000 Step 1; application of reimbursement rate: 100% = EUR 585 000 Step2: 90% limit of the maximum grant amount for pre-financing and interim payments = EUR 900 000 Calculation of interim payments Step 1 — Application of reimbursement rates to eligible costs approved by the Commission/Agency Step 2 — Limit to the 90% of the maximum grant amount amount of the interim payment H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 180 1st interim payment to the coordinator is EUR (900 000 – 333 334 ) = 566 666. Total accepted eligible costs for 2nd interim period: EUR 162 500 2nd interim payment: EUR 0 (the 90% limit has already been reached in the first period). 4. Amount of the payment of the balance The amount of the payment of the balance depends on the overall financial situation of the action, after calculation of the final grant amount (see Article 5.3):  if the final grant amount is higher than the payments already made, the balance will take the form of a payment  if the final grant amount is lower than the payments made, the balance will take the form of a recovery. Examples for calculating the payment of the balance: Maximum grant amount: EUR 1 000 000 with 100% reimbursement rate and three reporting periods. Pre-financing of EUR 333 334 (of which EUR 50 000 kept from the pre-financing for the Guarantee Fund). Limit for pre-financing and interim payments: 90% of the maximum grant amount: EUR 900 000. Total eligible costs accepted for 1st interim period: EUR 570 000; 1st interim payment: EUR 566 666 (the 90% limit is reached). Total eligible costs accepted for 2nd interim period: EUR 162 500. 2nd interim payment: EUR 0 (the 90 % limit has already been reached in the first period). Case 1: Total eligible costs claimed and accepted for the last reporting period: EUR 50 000. Final grant amount: EUR 750 000. Payment of the balance takes the form of a recovery as the payments made by the Commission are (EUR 900 000 – EUR 750 000) = EUR 150 000 higher than the final grant amount. The amount of EUR 150 000 will be recovered as follows:  EUR 50 000 from the Guarantee Fund and  EUR 100 000 from the coordinator (see procedure in Article 44.1.2). Case 2: Total eligible costs accepted for the last reporting period: EUR 312 500. Total eligible costs accepted for the action: EUR 570 000 + EUR 162 500 + EUR 312 500 = EUR 1 045 000. Final grant amount: EUR 1 000 000 (maximum grant amount) Balance to be paid: EUR 1 000 000 (final grant amount) - EUR 900 000 (payments already made, of which EUR 50 000 transferred from the first pre-financing to the Guarantee Fund) = EUR 100 000. EUR 150 000 will be paid to the coordinator as follows:  EUR 100 000 directly by the Commission as payment of the balance; and  EUR 50 000 corresponding to the amount retained for the Guarantee Fund and returned to the consortium. Case 3: Total eligible costs accepted for the last reporting period: EUR 155 000 Total eligible costs accepted for the action: EUR 570 000 + EUR 162 500 + EUR 155 000 = EUR 887 500. Payment of the balance takes the form of a recovery as the payments made by the Commission are (EUR 900 000 – EUR 887 500) = EUR 12 500 higher than the final grant amount.  The Commission/Agency will recover (deduct) this amount of EUR 12 500 from the amount retained for the Guarantee Fund.  The remaining EUR 37 500 retained for the Guarantee Fund will be returned to the consortium and paid to the coordinator. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 181 ARTICLE 22 — CHECKS, REVIEWS, AUDITS AND INVESTIGATIONS — EXTENSION OF FINDINGS 1. Checks by the Commission/Agency The Commission/Agency may — at any moment and without any time-limit — check any aspect relating to the grant. Examples: 1. After receiving the reports (see Article 20), the Commission checks the different documents (explanation of the work carried out, overview of the progress, explanation of the use of resources, etc.), for consistency with the description and work plan of the action. 2. The Commission/Agency regularly performs plagiarism checks on documents submitted by consortia. It uses an IT tool to do this. If it finds plagiarism, the Commission must inform the consortium/coordinator/beneficiary concerned (see also Article 34). 3. After receiving information about misconducts concerning a certain beneficiary that participates in H2020 actions, the Commission checks all the grant agreements in order to see if it needs to take action. 4. After the end of the action, the Commission receives a complaint by one of the beneficiaries that another beneficiary does not respect its intellectual property obligations and decides to look into this allegation. The Commission/Agency may ask the coordinator or directly the beneficiaries for any additional information it needs to carry out a check (see Article 17). All requested information must be provided within the given deadline. Example: The beneficiaries did not clearly explain the allocation and use of resources in their periodic report. The Commission asks for more information by a certain date (and suspends the payment deadline). The checks may also extend to third parties involved in the action (which is why beneficiaries must ensure that the Commission/Agency can exercise its rights towards contractors, subcontractors, linked third parties or third parties providing in-kind contributions, by including appropriate clauses in their contracts with them; see Articles 10-14). The Commission/Agency may carry out checks remotely, based on documents it received beforehand. ARTICLE 22 — CHECKS, REVIEWS, AUDITS AND INVESTIGATIONS — EXTENSION OF FINDINGS 22.1 Checks, reviews and audits by the [the Agency and the ] Commission 22.1.1 Right to carry out checks The [Agency or the] Commission will — during the implementation of the action or afterwards — check the proper implementation of the action and compliance with the obligations under the Agreement, including assessing deliverables and reports. For this purpose the [Agency or the] Commission may be assisted by external persons or bodies. The [Agency or the] Commission may also request additional information in accordance with Article 17. The [Agency or the] Commission may request beneficiaries to provide such information to it directly. Information provided must be accurate, precise and complete and in the format requested, including electronic format. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 182 It can do so using its own staff or with the assistance of external expert(s) or bodies — without asking the beneficiaries for approval before appointing them. The Commission/Agency will ensure that there is no conflict of interest by asking the expert(s) to sign a declaration. Example: Ethics checks are normally carried out with the help of external experts. If the check shows ineligible costs or the violation of ‘other obligations’ under the GA, it may lead to the rejection of costs or a reduction of the grant and, if necessary, recovery (see Articles 42, 43 and 44). If a more in-depth examination is required, the Commission may start a review or audit. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 183 1. Reviews by the Commission/Agency The Commission/Agency may — at any moment and up until 2 years after the payment of the balance — carry out a review. Reviews normally concern mainly the technical implementation of the action (i.e. its scientific and technological implementation), but may also cover financial and budgetary aspects or compliance with other obligations under the GA. They consist in an in-depth examination (often done with the help of independent experts) of the progress of the action, and in particular: 22.1.2 Right to carry out reviews The [Agency or the] Commission may — during the implementation of the action or afterwards — carry out reviews on the proper implementation of the action (including assessment of deliverables and reports), compliance with the obligations under the Agreement and continued scientific or technological relevance of the action. Reviews may be started up to two years after the payment of the balance. They will be formally notified to the coordinator or beneficiary concerned and will be considered to have started on the date of the formal notification. If the review is carried out on a third party (see Articles 10 to 16), the beneficiary concerned must inform the third party. The [Agency or the] Commission may carry out reviews directly (using its own staff) or indirectly (using external persons or bodies appointed to do so). It will inform the coordinator or beneficiary concerned of the identity of the external persons or bodies. They have the right to object to the appointment on grounds of commercial confidentiality. The coordinator or beneficiary concerned must provide — within the deadline requested — any information and data in addition to deliverables and reports already submitted (including information on the use of resources). The [Agency or the] Commission may request beneficiaries to provide such information to it directly. The coordinator or beneficiary concerned may be requested to participate in meetings, including with external experts. For on-the-spot reviews, the beneficiaries must allow access to their sites and premises, including to external persons or bodies, and must ensure that information requested is readily available. Information provided must be accurate, precise and complete and in the format requested, including electronic format. On the basis of the review findings, a ‘review report’ will be drawn up. The [Agency or the] Commission will formally notify the review report to the coordinator or beneficiary concerned, which has 30 days to formally notify observations (‘contradictory review procedure’). Reviews (including review reports) are in the language of the Agreement. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 184  the degree to which the work plan has been carried out and whether all deliverables were completed  whether the objectives are still relevant and provide scientific or industrial breakthrough potential  how resources were planned and used in relation to the achieved progress, and if their use respected the principles of economy, efficiency and effectiveness  the management procedures and methods of the action  the beneficiaries’ contributions and integration within the action  the expected potential scientific, technological, economic, competitive and social impact, and plans for using and disseminating results. For some types of actions, they may be done regularly (e.g. for the periodic reports related to a payment, to help the Commission/Agency to properly assess the action implementation and the work carried out by the beneficiaries). They may also extend to third parties involved in the action (which is why beneficiaries must ensure that the Commission/Agency can exercise its rights towards contractors, subcontractors, linked third parties or third parties providing in-kind contributions, by including appropriate clauses in their contracts with them; see Articles 10-14). If the review shows improper implementation of the action, ineligible costs or the violation of ‘other obligations’ under the GA, it may lead to suspension, termination, rejection of costs, reduction of the grant and, if necessary, recovery (see Articles 42-44, 47-50). If carried out during the implementation of the action, a review may also recommend reorientations to the action. 2. Procedure The review will be initiated by a letter sent to the coordinator (via the electronic exchange system, see Article 52). The letter will also mention the names of the independent experts that have been appointed (if any). The consortium may object to an expert, but only on the grounds of commercial confidentiality. The review may include on-the-spot visits or ‘review meeting’ (on Commission/Agency premises or anywhere relevant for the action). If there is a meeting, the beneficiaries will be invited (via the coordinator, via the electronic exchange system) and the invitation will indicate the documents that will be discussed, normally:  Annex 1 (the contractual description of the action against which the assessment will be made)  for periodic reviews: the periodic report(s) (technical and financial) for the period(s) under review (including documents related to financial/budgetary issues)  deliverables that were due  for final reviews: the final report and all periodic reports. The results of the review will be recorded in a ‘review report’. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 185 The draft review report will be sent to the coordinator for comments within 30 days (‘contradictory review procedure’). (This is NOT the contradictory procedure described in Article 42. It is a separate procedure that may, if necessary, be followed by a second contradictory procedure for rejection of costs, reduction of the grant, etc. under Articles 41 to 46.) H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 186 1. Audits by the Commission/Agency The Commission/Agency may — at any moment and up until 2 years after the payment of the balance — carry out an audit. 22.1.3 Right to carry out audits The [Agency or the] Commission may — during the implementation of the action or afterwards — carry out audits on the proper implementation of the action and compliance with the obligations under the Agreement. Audits may be started up to two years after the payment of the balance. They will be formally notified to the coordinator or beneficiary concerned and will be considered to have started on the date of the formal notification. If the audit is carried out on a third party (see Articles 10 to 16), the beneficiary concerned must inform the third party. The [Agency or the] Commission may carry out audits directly (using its own staff) or indirectly (using external persons or bodies appointed to do so). It will inform the coordinator or beneficiary concerned of the identity of the external persons or bodies. They have the right to object to the appointment on grounds of commercial confidentiality. The coordinator or beneficiary concerned must provide — within the deadline requested — any information (including complete accounts, individual salary statements or other personal data) to verify compliance with the Agreement. The [Agency or the] Commission may request beneficiaries to provide such information to it directly For on-the-spot audits, the beneficiaries must allow access to their sites and premises, including to external persons or bodies, and must ensure that information requested is readily available. Information provided must be accurate, precise and complete and in the format requested, including electronic format. On the basis of the audit findings, a ‘draft audit report’ will be drawn up. The [Agency or the] Commission will formally notify the draft audit report to the coordinator or beneficiary concerned, which has 30 days to formally notify observations (‘contradictory audit procedure’). This period may be extended by the [Agency or the] Commission in justified cases. The ‘final audit report’ will take into account observations by the coordinator or beneficiary concerned. The report will be formally notified to it. Audits (including audit reports) are in the language of the Agreement. The [Agency or the] Commission may also access the beneficiaries’ statutory records for the periodical assessment of unit costs or flat-rate amounts [or lump sums]. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 187 Audits normally concern mainly the financial implementation of the action by a beneficiary (i.e. financial and budgetary implementation), but may also cover technical aspects or compliance with other obligations under the GA. They consist in an in-depth examination (by professional (external or Commission/Agency) auditors and according to the generally accepted audit standards) of the implementation of the action by the beneficiary. They may also extend to third parties involved in the action and third parties receiving financial support or a prize (which is why beneficiaries must ensure that the Commission/Agency auditors can exercise their rights towards contractors, subcontractors, linked third parties or third parties providing in-kind contributions, by including appropriate clauses in their contracts with them; see Articles 10-15). Examples: 1. The Commission/Agency will audit linked third parties, as if they were beneficiaries. The audit will be carried out on the premises of the third party and all communication concerning the audit will be carried out directly with the linked third party (e.g. audit initiation letter, contradictory audit procedure). However, since the financial consequences would normally have to be borne by the linked third party’s beneficiary (see Article 44), the Commission/Agency will also notify the beneficiary about the launching the audit, as well as about a summary of its conclusions. 2. The Commission/Agency may audit third parties providing in-kind contributions (free of charge or against payment), in the context of an audit of a beneficiary, in order to see if the costs claimed for the in- kind contribution are eligible. The audit procedure will therefore be with the beneficiary. The beneficiary is responsible for ensuring that the auditors have access to all necessary documents and to the third party’s premises, if necessary. 3. The Commission/Agency may audit contractors or subcontractors, in the context of an audit of a beneficiary, in order to see if contracts/subcontracts were awarded in compliance with the requirements of the H2020 GA (ensuring best value for money or, if appropriate, the lowest price, absence of conflict of interest) and that the payments made under the contract/subcontract were in line with the GA (e.g. amounts paid to the contractor/subcontractor match those declared by the beneficiary). The audit procedure will therefore be with the beneficiary. The beneficiary is responsible for ensuring that the auditors have access to all necessary documents and to carry out checks on the contractor/subcontractor’s premises, if necessary. The audit will not aim to assess the contractors’/subcontractors’ costs, because the remuneration they get is a set price, not a reimbursement of costs (except in cases of fraud). 4. The Commission/Agency may audit recipients of financial support or prizes, in the context of an audit of a beneficiary, in order to see whether the eligibility conditions for the costs declared by the beneficiary are met. The audit procedure will therefore be with the beneficiary. The beneficiary is responsible for ensuring that the auditors have access to all necessary documents and to the recipient’s premises, if necessary. The audit will normally not aim to assess the costs incurred by the recipients (since they are not relevant for the eligibility of the beneficiary’s costs) — unless Annex 1 to the GA provides that the financial support must be given as reimbursement of the actual costs of the third parties. If the audit shows, ineligible costs, improper implementation of the action or the violation of ‘other obligations’ under the GA, it may lead to suspension, termination, rejection of costs, reduction of the grant and, if necessary, recovery (see Articles 42-44, 47-50). In some cases, findings may result in the acceptance of previously rejected costs (if the beneficiary declared them). In very serious cases, audit results may also lead administrative or financial penalties (see Article 45). Once an audit has started, the beneficiary must keep ALL the records and supporting documents until the audit procedure AND its follow-up (including procedure of extension of findings, rejection of costs, reduction of the grant, recovery and litigation) is completed. Example: If the beneficiary archives the paper copies of the original supporting documentation not on its premises, the documentation must be retrieved and sent there in time for the audit fieldwork. . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 188 Specific cases (audits): Audits for periodical assessment of simplified cost forms — The Commission may also audit the accounting records of beneficiaries to obtain general information about actual costs for cost items for which it has fixed unit costs, flat-rate or lump sums (for statistical purposes or to gather data to assess the adequacy of its unit cost, flat rate or lump sum). Such audits will normally have no direct consequences for the beneficiaries that were audited; even if the actual costs turn out to be lower, this will not lead to a rejection of costs. 2. Procedure The audit will be initiated by a letter sent to the beneficiary concerned (via the electronic exchange system or by registered post with proof of delivery; see Article 52). If the Commission/Agency uses an external audit firm, this letter will mention its name. The beneficiary may object on grounds of commercial confidentiality (together with the reasons why) and — if justified — the Commission/Agency may decide to appoint another external auditor (or, in exceptional circumstances, to carry out the audit itself). The audit usually involves a desk review of the documents requested from the beneficiary and an on-the-spot visit (i.e. on the beneficiary’s premises or on the site on which the action is being implemented). There may however also be audits that consist only in a desk review. The auditors will request access to a wide range of records and documentation (e.g. payslips, labour contracts, complete statutory accounts, etc.) and will indicate how and when it must be provided (and in which format). The beneficiary must provide the auditors with all requested information, records and supporting documents (in the format and within the deadline specified). Example: A hard copy list of records from the general ledger (accounting document) disclosing hundreds or thousands of transactions is impossible to process manually, therefore the auditors will normally require an electronic version. Objections based on data protection or confidentiality will NOT be accepted. Where the records and documentation contain personal data, the Commission/Agency will process it in compliance with Regulation No 45/2001 and the beneficiary must inform the persons concerned about this processing (see Article 39). Confidential data will be processed in accordance with Article 36. Failure to provide the requested information (in the requested format and within the specified deadline) will lead to the rejection of costs (and possibly other measures, such as recovery, suspension of payments, termination, administrative and financial penalties, etc.). For on-the-spot audits, the beneficiary must allow access to its premises and ensure that all records and supporting documentation are readily available. This includes granting access to research facilities and interviewing the researchers that worked on the action. The results of the audit will be recorded in an ‘audit report’. The draft audit report will be sent to the beneficiary concerned for comments within 30 days (‘contradictory audit procedure’). (This is NOT the contradictory procedure described in Article 42. It is a separate procedure that may, if necessary, be followed by a second contradictory procedure for rejection of costs, reduction of the grant, etc. under Articles 41 to 46.) The audit procedure will be closed (by the Commission/Agency auditors) with the ‘letter of audit conclusions’ (and the file will then be passed on to the operational services (authorising officer) for audit implementation, if necessary). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 189 1. Investigations by OLAF OLAF is the EU’s anti-fraud office, responsible for investigating fraud against the EU budget. If the Commission/Agency suspects that a beneficiary or third party involved in an action committed fraud or other illegal acts, it will inform OLAF, who may decide to investigate. OLAF will send the conclusions of the investigation to the Commission/Agency, who will then decide how to proceed. An OLAF investigation may lead to suspension, termination, rejection of costs, reduction of the grant and recovery (see Articles 42-44, 47-50), to administrative and financial penalties (see Article 45) as well as to criminal prosecution before the national authorities. 22.2 Investigations by the European Anti-Fraud Office (OLAF) Under Regulations No 883/2013 39 and No 2185/96 40 (and in accordance with their provisions and procedures), the European Anti-Fraud Office (OLAF) may — at any moment during implementation of the action or afterwards — carry out investigations, including on-the-spot checks and inspections, to establish whether, concerning the action funded under the Agreement, there has been fraud, corruption or any other illegal activity affecting the financial interests of the EU. 39 Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council of 11 September 2013 concerning investigations conducted by the European Anti-Fraud Office (OLAF) and repealing Regulation (EC) No 1073/1999 of the European Parliament and of the Council and Council Regulation (Euratom) No 1074/1999 (OJ L 248, 18.09.2013, p. 1). 40 Council Regulation (Euratom, EC) No 2185/1996 of 11 November 1996 concerning on-the-spot checks and inspections carried out by the Commission in order to protect the European Communities' financial interests against fraud and other irregularities (OJ L 292, 15.11.1996, p. 2). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 190 1. Checks and audits by the European Court of Auditors (ECA) The European Court of Auditors (ECA) is the (entirely independent) external auditing body for all European institutions. As such, it may carry out audits on all recipients of EU funds (including beneficiaries, third parties involved in the action and recipients of financial support or prizes). Depending on the outcome, the results of such an audit may be notified to the beneficiary. If the Commission/Agency intends to reject costs on the basis of the findings of the Court of Auditors, it will inform the beneficiary and give it the possibility to make observations. 22.3 Checks and audits by the European Court of Auditors (ECA) Under Article 287 of the Treaty on the Functioning of the European Union (TFEU) and Article 161 of the Financial Regulation No 966/2012 41 , the European Court of Auditors (ECA) may — at any moment during implementation of the action or afterwards — carry out audits. The ECA has the right of access for the purpose of checks and audits. 41 Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002 (OJ L 298, 26.10.2012, p. 1). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 191 1. Checks, reviews, audits and investigations for international organisations Checks, reviews, audits and investigations may also be made with regard to beneficiaries that are international organisations (IOs). If there is a specific agreement concluded with the international organisation (and this agreement covers checks, reviews, audits and investigations), the Commission/Agency will apply the agreement. Example: A Financial and Administrative Framework Agreement (FAFA) signed between the European Union and the international organisation. 22.4 Checks, reviews, audits and investigations for international organisations [OPTION for international organisations: In conformity with its financial regulations, the European Union, including the European Anti-Fraud Office (OLAF) and the European Court of Auditors (ECA), may undertake, including on the spot, checks, reviews audits and investigations. This Article will be applied in accordance with any specific agreement concluded in this respect by the international organisation and the European Union.] [OPTION: Not applicable] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 192 22.5 Consequences of findings in checks, reviews, audits and investigations — Extension of findings 22.5.1 Findings in this grant Findings in checks, reviews, audits or investigations carried out in the context of this grant may lead to the rejection of ineligible costs (see Article 42), reduction of the grant (see Article 43), recovery of undue amounts (see Article 44) or to any of the other measures described in Chapter 6. Rejection of costs or reduction of the grant after the payment of the balance will lead to a revised final grant amount (see Article 5.4). Findings in checks, reviews, audits or investigations may lead to a request for amendment for the modification of Annex 1 (see Article 55). Checks, reviews, audits or investigations that find systemic or recurrent errors, irregularities, fraud or breach of obligations may also lead to consequences in other EU or Euratom grants awarded under similar conditions (‘extension of findings from this grant to other grants’). Moreover, findings arising from an OLAF investigation may lead to criminal prosecution under national law. 22.5.2 Findings in other grants The [Agency or the] Commission may extend findings from other grants to this grant (‘extension of findings from other grants to this grant’), if: (a) the beneficiary concerned is found, in other EU or Euratom grants awarded under similar conditions, to have committed systemic or recurrent errors, irregularities, fraud or breach of obligations that have a material impact on this grant and (b) those findings are formally notified to the beneficiary concerned — together with the list of grants affected by the findings — no later than two years after the payment of the balance of this grant. The extension of findings may lead to the rejection of costs (see Article 42), reduction of the grant (see Article 43), recovery of undue amounts (see Article 44), suspension of payments (see Article 48), suspension of the action implementation (see Article 49) or termination (see Article 50). 22.5.3 Procedure The [Agency or the] Commission will formally notify the beneficiary concerned the systemic or recurrent errors and its intention to extend these audit findings, together with the list of grants affected. 22.5.3.1 If the findings concern eligibility of costs: the formal notification will include: (a) an invitation to submit observations on the list of grants affected by the findings; (b) the request to submit revised financial statements for all grants affected; (c) the correction rate for extrapolation established by the [Agency or the]Commission on the basis of the systemic or recurrent errors, to calculate the amounts to be rejected if the beneficiary concerned: (i) considers that the submission of revised financial statements is not possible or practicable or (ii) does not submit revised financial statements. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 193 1. Extension of findings Findings in checks, reviews, audits or investigations may be extended to other EU or Euratom grants awarded under similar conditions. If the Commission/Agency finds substantial errors, irregularities, fraud, improper implementation or serious breach of other obligations that are systemic or recurrent, it may make a correction (rejection of costs or reduction; see Articles 42 and 43) in:  the grant, both for Extension of findings is possible for ALL H2020 grants — regardless of the entity that awarded the grant (i.e. Commission, executive agency or H2020 funding body). . The beneficiary concerned has 90 days from receiving notification to submit observations, revised financial statements or to propose a duly substantiated alternative correction method. This period may be extended by the [Agency or the] Commission in justified cases. The amounts to be rejected will be determined on the basis of the revised financial statements, subject to their approval. If the [Agency or the] Commission does not receive any observations or revised financial statements, does not accept the observations or the proposed alternative correction method or does not approve the revised financial statements, it will formally notify the beneficiary concerned the application of the initially notified correction rate for extrapolation. If the [Agency or the] Commission accepts the alternative correction method proposed by the beneficiary concerned, it will formally notify the application of the accepted alternative correction method. 22.5.3.2 If the findings concern improper implementation or a breach of another obligation: the formal notification will include: (a) an invitation to submit observations on the list of grants affected by the findings and (b) the flat-rate the [Agency or the] Commission intends to apply according to the principle of proportionality. The beneficiary concerned has 90 days from receiving notification to submit observations or to propose a duly substantiated alternative flat-rate. If the [Agency or the] Commission does not receive any observations or does not accept the observations or the proposed alternative flat-rate, it will formally notify the beneficiary concerned the application of the initially notified flat-rate. If the [Agency or the] Commission accepts the alternative flat-rate proposed by the beneficiary concerned, it will formally notify the application of the accepted alternative flat-rate. 22.6 Consequences of non-compliance If a beneficiary breaches any of its obligations under this Article, any insufficiently substantiated costs will be ineligible (see Article 6) and will be rejected (see Article 42). Such breaches may also lead to any of the other measures described in Chapter 6. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 194  reporting periods that where audited/reviewed and  reporting periods that were not audited/reviewed (‘extension of the findings’)  other H2020 grants of the beneficiary (‘extension of the findings’). ‘Recurrent’ means an infringement found in several grants of the beneficiary (and therefore likely to also have occurred in the other grants of that beneficiary). Examples (recurrent): In several grants, the beneficiary claimed deductible VAT as an eligible cost; increased the remuneration of its personnel solely for its contracts with the Commission; did not clearly display the EU funding despite the GA’s visibility requirements. ‘Systemic’ means an infringement that is inherently related to the beneficiary’s methodologies, accounting, management or internal control practices (and therefore, by its very nature, likely to have occurred in all other transactions of the beneficiary that are comparable/similar (i.e. governed by the same methodologies, accounting management or internal control practices, and thus part of the same ‘system’). Examples (systemic): The beneficiary does not keep records of a certain type of transactions; confidential information is insufficiently protected. The findings may be extended both to on-going grants (i.e. grants for which the payment of the balance has not yet been carried out) and to closed grants — up to two years after the payment of the balance. 2. Procedure If findings are systemic or recurrent, this will already have been mentioned in the audit or review report and — like the other aspects of the report — they have been subject to the contradictory audit/review procedure. If the findings are upheld after this contradictory audit/review procedure, the audit/review will be closed (by the Commission/Agency auditors/reviewers) and continue with an ‘audit extension procedure’ (which is then followed by ‘audit/review implementation’). Procedure for extension of findings: Step 1 — After the end of the contradictory audit/review procedure, the Commission/Agency auditors send the letter closing the audit/review procedure (‘letter of audit conclusions’), together with  the final audit/review report  the list of grants/reporting periods to which the audit findings will be extended  an invitation to submit comments on the list of grants/reporting periods  for ineligibility of costs:  a request to submit revised financial statements for the grants/reporting periods on the list (via a specific form annexed to the letter of audit conclusions)  the proposed correction rate for extrapolation (to be used if the beneficiary does not submit revised financial statements)  the conditions for the external counter audit needed to propose an alternative correction method (see below)  for improper implementation or breach of other obligations: the proposed flat- rate for the correction. The ‘extrapolation rate’ will normally correspond to the average correction rate calculated in the sample of audited grants (for the flawed cost category(ies) or even for the total costs claimed). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 195 The ‘flat-rate’ will normally be based on the relative importance of the tasks improperly implemented or the seriousness of the breach of obligations — compared to the action (i.e. calculated according to the principle of proportionality). The rate will be used if:  the beneficiary explicitly requests it Example: if the beneficiary considers that the administrative workload related to submitting revised financial statements for all the grants affected would be disproportionate or impossible and so it decides to accept the correction rate.  the beneficiary does not submit the revised financial statements or refuses to cooperate (in time)  the Commission/Agency cannot approve the revised financial statements (because they do not properly reflect the audit/review findings)  the Commission/Agency cannot accept an alternative correction method proposed by the beneficiary. Step 2 — The beneficiary has 90 days to:  submit comments on the list of grants If the beneficiary considers that some (or all) of the grants on the list are not affected, it must explain why. If the explanation is not sufficient, the Commission/Agency may request additional information or clarifications.  submit revised financial statements (free of the errors or irregularities raised). Example: An audit finds that the beneficiary claimed the deductible VAT as an eligible cost and qualifies this finding as recurrent. The beneficiary agrees with the audit conclusions. It submits revised financial statements correcting the VAT for each grant affected.  if it does not intend to submit revised financial statement, but disagrees with the proposed correction rate, the beneficiary may:  for ineligibility of costs: present an alternative correction method (alternative correction rate), substantiated by an audit performed by an independent external auditor The purpose of the independent audit can ONLY be to determine a more precise error rate for the audit/review findings of the Commission/Agency (NOT to contest those findings themselves).  for improper implementation or breach of other obligations: present an alternative correction method (alternative flat rate), substantiated by a note explaining why the alternative rate is more appropriate than the rate proposed by the Commission/Agency. Step 3 — Audit implementation. If the Commission/Agency maintains its findings, it then may start rejection, reduction and, if necessary, recovery procedures (see Articles 42 to 44) — either on the basis of the revised financial statements, the correction rate announced or an alternative correction rate. If the Commission/Agency received and approved the revised financial statements, the costs to be rejected will be calculated, for each grant, according to the revised financial statements. If the Commission/Agency could not approve the revised financial statements, the costs to be rejected will be calculated, for each grant, by applying the correction rate for extrapolation. If the Commission/Agency received and accepted an alternative correction method, the costs to be rejected/reduction will be calculated, for each grant, by applying the accepted alternative correction rate. The Commission/Agency has full discretion to accept or refuse the alternative correction method and there is no entitlement to it. . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 196 If the beneficiary did not send any comments or if the Commission/Agency does not accept its comments or alternative method proposed, the costs to be rejected/reduction will be calculated, for each grant, by applying the correction rate initially notified. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 197 ARTICLE 23 — EVALUATION OF THE IMPACT OF THE ACTION 1. Evaluations The Commission/Agency may carry out interim and final evaluations of the actions for the monitoring and evaluation of the Horizon 2020 Framework Programme implementation. They are based on the performance indicators and issues specified in Annexes II and III to the Horizon 2020 Specific Programme. These performance indicators vary according to the specific programme’s objectives. Performance indicators may be refined during the implementation of Horizon 2020. Example: Progress on the Specific Objective ’Leadership in enabling and industrial technologies’ is evaluated on the basis of the three following indicators:  patent applications and patents awarded in the different enabling and industrial technologies,  share of participating firms introducing innovations new to the company or the market (covering the period of the project plus three years),  number of joint public-private publications. The necessary information will normally be taken from the questionnaire (that must be filled out as part of the periodic reports). However, the Commission/Agency may also address specific information requests to the coordinator (or the other beneficiaries). These evaluations have NO effect on the grant. . ARTICLE 23 — EVALUATION OF THE IMPACT OF THE ACTION 23.1 Right to evaluate the impact of the action The [Agency or the] Commission may carry out interim and final evaluations of the impact of the action measured against the objective of the [EU][Euratom] programme. Evaluations may be started during implementation of the action and up to [OPTION by default: five][OPTION for low value grants: three] years after the payment of the balance. The evaluation is considered to start on the date of the formal notification to the coordinator or beneficiaries. The [Agency or the] Commission may make these evaluations directly (using its own staff) or indirectly (using external bodies or persons it has authorised to do so). The coordinator or beneficiaries must provide any information relevant to evaluate the impact of the action, including information in electronic format. 23.2 Consequences of non-compliance If a beneficiary breaches any of its obligations under this Article, the [Commission][Agency] may apply the measures described in Chapter 6. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 198 SECTION 3 RIGHTS AND OBLIGATIONS RELATED TO BACKGROUND AND RESULTS SUBSECTION 1 GENERAL ARTICLE 23a — MANAGEMENT OF INTELLECTUAL PROPERTY 1. Code of Practice Beneficiaries that are universities or other public research organisations must take measures to implement the principles set out the Code of Practice50 annexed to the Commission Recommendation on the management of intellectual property in knowledge transfer activities. The Code consists of a set of general principles aiming to improve IP management and knowledge transfer by public research organisations by promoting exploitation and dissemination of research results (— with Point 1: Principles for an internal intellectual property policy and Point 2: Principles for a knowledge transfer policy) 50 Available at http://europa.eu/legislation_summaries/research_innovation/general_framework/ri0007_en.htm. This is a best effort obligation: If not already done so, these beneficiaries must ensure that they consider the principles set out in Points 1 and 2 of the Code of Practice in the design and implementation of their IP management and knowledge transfer policies. . SECTION 3 RIGHTS AND OBLIGATIONS RELATED TO BACKGROUND AND RESULTS SUBSECTION 1 GENERAL ARTICLE 23a — MANAGEMENT OF INTELLECTUAL PROPERTY 23a.1 Obligation to take measures to implement the Commission Recommendation on the management of intellectual property in knowledge transfer activities Beneficiaries that are universities or other public research organisations must take measures to implement the principles set out in Points 1 and 2 of the Code of Practice annexed to the Commission Recommendation on the management of intellectual property in knowledge transfer activities 42 . This does not change the obligations set out in Subsections 2 and 3 of this Section. The beneficiaries must ensure that researchers and third parties involved in the action are aware of them. 23a.2 Consequences of non-compliance If a beneficiary breaches its obligations under this Article, the [Commission][Agency] may apply any of the measures described in Chapter 6. 42 Commission Recommendation C(2008) 1329 of 10.4.2008 on the management of intellectual property in knowledge transfer activities and the Code of Practice for universities and other public research institutions attached to this recommendation. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 199 SUBSECTION 2 RIGHTS AND OBLIGATIONS RELATED TO BACKGROUND ARTICLE 24 — AGREEMENT ON BACKGROUND 1. Agreement on background The beneficiaries must identify and agree on what constitutes background for their action (in order to be able to give access to it). Best practice: Although not obligatory, beneficiaries are strongly advised to agree on background before the GA is signed, to ensure that they have access rights to what is needed for implementing the action (and then exploiting its results). ‘Background’ means any tangible or intangible input — from data to know-how, information or rights — that exists before the GA is signed and that is needed to implement the action or to exploit its results. Examples: prototypes; cell lines; patents; database rights For intellectual property rights, it suffices that the application was filed before the GA is signed. (‘Intellectual property’ being understood in the meaning defined in Article 2 of the Convention establishing the World Intellectual Property Organisation, signed at Stockholm on 14 July 196751). Background is not limited to input owned, but potentially extends to anything the beneficiaries lawfully hold (e.g. through a licence with the right to sub-licence). It also extends to input held by other parts of the beneficiary’s organisation. Example: if a university department participates in the action, background could potentially be anything held by the university (unless the department has its own legal personality and is the beneficiary) 51 Available at http://www.wipo.int/treaties/en/convention/trtdocs_wo029.html. SUBSECTION 2 RIGHTS AND OBLIGATIONS RELATED TO BACKGROUND ARTICLE 24 — AGREEMENT ON BACKGROUND 24.1 Agreement on background The beneficiaries must identify and agree (in writing) on the background for the action (‘agreement on background’). ‘Background’ means any data, know-how or information — whatever its form or nature (tangible or intangible), including any rights such as intellectual property rights — that: (a) is held by the beneficiaries before they acceded to the Agreement, and (b) is needed to implement the action or exploit the results. 24.2 Consequences of non-compliance If a beneficiary breaches any of its obligations under this Article, the grant may be reduced (see Article 43). Such breaches may also lead to any of the other measures described in Chapter 6. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 200 The agreement may take any form (e.g. positive list, negative list). It may be a separate agreement or may be part of the consortium agreement (see Article 41). If access to background is subject to legal restrictions or limits, the beneficiary must inform the other beneficiaries — before signing the GA (see Article 25). Example: Beneficiaries may agree to exclude specific background. Such an exclusion may be temporary (e.g. to permit the adequate protection of the background prior to providing access) or limited (e.g. to exclude only one or more specific beneficiaries). As background is by definition considered to be needed for implementation or exploitation, the impact of such exclusion on the action, particularly regarding an exclusion which does not have a temporary character, should be examined by the beneficiaries. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 201 ARTICLE 25 — ACCESS RIGHTS TO BACKGROUND ARTICLE 25 — ACCESS RIGHTS TO BACKGROUND 25.1 Exercise of access rights — Waiving of access rights — No sub-licensing To exercise access rights, this must first be requested in writing (‘request for access’). ‘Access rights’ means rights to use results or background under the terms and conditions laid down in this Agreement. Waivers of access rights are not valid unless in writing. Unless agreed otherwise, access rights do not include the right to sub-license. 25.2 Access rights for other beneficiaries, for implementing their own tasks under the action The beneficiaries must give each other access — on a royalty-free basis — to background needed to implement their own tasks under the action, unless the beneficiary that holds the background has — before acceding to the Agreement —: (a) informed the other beneficiaries that access to its background is subject to legal restrictions or limits, including those imposed by the rights of third parties (including personnel), or (b) agreed with the other beneficiaries that access would not be on a royalty-free basis. 25.3 Access rights for other beneficiaries, for exploiting their own results The beneficiaries must give each other access — under fair and reasonable conditions — to background needed for exploiting their own results, unless the beneficiary that holds the background has — before acceding to the Agreement — informed the other beneficiaries that access to its background is subject to legal restrictions or limits, including those imposed by the rights of third parties (including personnel). ‘Fair and reasonable conditions’ means appropriate conditions, including possible financial terms or royalty-free conditions, taking into account the specific circumstances of the request for access, for example the actual or potential value of the results or background to which access is requested and/or the scope, duration or other characteristics of the exploitation envisaged. Requests for access may be made — unless agreed otherwise — up to one year after the period set out in Article 3. 25.4 Access rights for affiliated entities Unless otherwise agreed in the consortium agreement, access to background must also be given — under fair and reasonable conditions (see above; Article 25.3) and unless it is subject to legal restrictions or limits, including those imposed by the rights of third parties (including personnel) — to affiliated entities 43 established in an EU Member State or ‘associated country’ 44 , if this is needed to exploit the results generated by the beneficiaries to which they are affiliated. Unless agreed otherwise (see above; Article 25.1), the affiliated entity concerned must make the request directly to the beneficiary that holds the background. Requests for access may be made — unless agreed otherwise — up to one year after the period set out in Article 3. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 202 1. Access to background The rules on access to background (including conditions and scope of access) are generally the same as for results (see Article 31). However, for background there is NO (or a more limited) obligation to give access, if there are restrictions or limits (legal or otherwise) and the beneficiary has informed the others — before acceding to the GA (or immediately when additional background is agreed on). Example: A pre-existing agreement (e.g. an exclusive licence) which precludes the granting of access rights By contrast, if a beneficiary contracts on background later, it must ensure that it can comply with its access obligations under the GA. Moreover, the conditions for access are slightly different. Access must be given:  for the implementation of action tasks: the default rule is royalty-free However, if agreed by the beneficiaries before the GA is signed, for background other conditions may apply. 25.5 Access rights for third parties [OPTION for trans-national access to research infrastructure: The access provider must — unless it is subject to legal restrictions or limits, including those imposed by the rights of third parties (including personnel) — give users royalty-free access to background needed to implement the action. The access provider must inform the users as soon as possible of any restriction which might substantially affect the granting of access rights.] [OPTION: Not applicable] 25.6 Consequences of non-compliance If a beneficiary breaches any of its obligations under this Article, the grant may be reduced (see Article 43). Such breaches may also lead to any of the other measures described in Chapter 6. 43 For the definition, , see Article 2.1(2) Rules for Participation Regulation No 1290/2013: ‘affiliated entity’ means any legal entity that is: - under the direct or indirect control of a participant, or - under the same direct or indirect control as the participant, or - directly or indirectly controlling a participant. ‘Control’ may take any of the following forms: (a) the direct or indirect holding of more than 50% of the nominal value of the issued share capital in the legal entity concerned, or of a majority of the voting rights of the shareholders or associates of that entity; (b) the direct or indirect holding, in fact or in law, of decision-making powers in the legal entity concerned. However, the following relationships between legal entities shall not in themselves constitute controlling relationships: (a) the same public investment corporation, institutional investor or venture-capital company has a direct or indirect holding of more than 50% of the nominal value of the issued share capital or a majority of voting rights of the shareholders or associates; (b) the legal entities concerned are owned or supervised by the same public body. 44 For the definition, see Article 2.1(3) Rules for Participation Regulation No 1290/2013: ‘associated country’ means a non EU-country (third country) which is party to an international agreement with the Union, as identified in [OPTION for EU grants: Article 7 of the H2020 Framework Programme Regulation No 1291/2013. Article 7 sets out the conditions for association of non-EU countries to Horizon 2020.][OPTION for Euratom grants: Article 5 of Council Regulation (Euratom) No 1314/2013 of 16 December 2013 on the Research and Training Programme of the European Atomic Energy Community (2014-2018) complementing the Horizon 2020 – The Framework Programme for Research and Innovation (‘H2020 Euratom Research and Training Programme Regulation No 1314/2013’) (OJ L 347, 20.12.2013, p. 948 . Article 5 sets out the conditions for association of non-EU countries to Horizon 2020.] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 203 Example: A beneficiary owns a novel technology needed by other beneficiaries for implementing their tasks under the action and the other beneficiaries do not bring the same level of background. In such case the beneficiaries may agree that access to the novel technology to implement the action will not be on a royalty-free basis. Best practice: If beneficiaries intend to deviate from the default rule, it is recommended that this is explained in detail in their proposal.  for the exploitation of results: under fair and reasonable conditions (see Article 31). Also, there are NO specific access rights for EU institutions, Member States, Euratom, joint undertakings or third parties — except for the option for royalty-free access for users of research infrastructures in actions with trans-national or virtual access to research infrastructure. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 204 SUBSECTION 3 RIGHTS AND OBLIGATIONS RELATED TO RESULTS ARTICLE 26 — OWNERSHIP OF RESULTS SUBSECTION 3 RIGHTS AND OBLIGATIONS RELATED RO RESULTS ARTICLE 26 — OWNERSHIP OF RESULTS 26.1 Ownership by the beneficiary that generates the results Results are owned by the beneficiary that generates them. ‘Results’ means any (tangible or intangible) output of the action such as data, knowledge or information — whatever its form or nature, whether it can be protected or not — that is generated in the action, as well as any rights attached to it, including intellectual property rights. 26.2 Joint ownership by several beneficiaries Two or more beneficiaries own results jointly if: (a) they have jointly generated them and (b) it is not possible to: (i) establish the respective contribution of each beneficiary, or (ii) separate them for the purpose of applying for, obtaining or maintaining their protection (see Article 27). The joint owners must agree (in writing) on the allocation and terms of exercise of their joint ownership (‘joint ownership agreement’), to ensure compliance with their obligations under this Agreement. Unless otherwise agreed in the joint ownership agreement, each joint owner may grant non-exclusive licences to third parties to exploit jointly-owned results (without any right to sub-license), if the other joint owners are given: (a) at least 45 days advance notice and (b) fair and reasonable compensation. Once the results have been generated, joint owners may agree (in writing) to apply another regime than joint ownership (such as, for instance, transfer to a single owner (see Article 30) with access rights for the others). 26.3 Rights of third parties (including personnel) If third parties (including personnel) may claim rights to the results, the beneficiary concerned must ensure that it complies with its obligations under the Agreement. If a third party generates results, the beneficiary concerned must obtain all necessary rights (transfer, licences or other) from the third party, in order to be able to respect its obligations as if those results were generated by the beneficiary itself. If obtaining the rights is impossible, the beneficiary must refrain from using the third party to generate the results. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 205 1. Ownership of results Results belong normally to the beneficiary that produced them. 26.4 [EU][Euratom][Agency] ownership, to protect results 26.4.1 [The EU][Euratom][The Agency] may — with the consent of the beneficiary concerned — assume ownership of results to protect them, if a beneficiary intends — up to four years after the period set out in Article 3 — to disseminate its results without protecting them, except in any of the following cases: (a) the lack of protection is because protecting the results is not possible, reasonable or justified (given the circumstances); (b) the lack of protection is because there is a lack of potential for commercial or industrial exploitation, or (c) the beneficiary intends to transfer the results to another beneficiary or third party established in an EU Member State or associated country, which will protect them. Before the results are disseminated and unless any of the cases above under Points (a), (b) or (c) applies, the beneficiary must formally notify the [Commission][Agency] and at the same time inform it of any reasons for refusing consent. The beneficiary may refuse consent only if it can show that its legitimate interests would suffer significant harm. If the [Commission][Agency] decides to assume ownership, it will formally notify the beneficiary concerned within 45 days of receiving notification. No dissemination relating to these results may take place before the end of this period or, if the [Commission][Agency] takes a positive decision, until it has taken the necessary steps to protect the results. 26.4.2 [The EU][Euratom][The Agency] may — with the consent of the beneficiary concerned — assume ownership of results to protect them, if a beneficiary intends — up to four years after the period set out in Article 3 — to stop protecting them or not to seek an extension of protection, except in any of the following cases: (a) the protection is stopped because of a lack of potential for commercial or industrial exploitation; (b) an extension would not be justified given the circumstances. A beneficiary that intends to stop protecting results or not seek an extension must — unless any of the cases above under Points (a) or (b) applies — formally notify the [Commission][Agency] at least 60 days before the protection lapses or its extension is no longer possible and at the same time inform it of any reasons for refusing consent. The beneficiary may refuse consent only if it can show that its legitimate interests would suffer significant harm. If the [Commission][Agency] decides to assume ownership, it will formally notify the beneficiary concerned within 45 days of receiving notification. 26.5 Consequences of non-compliance If a beneficiary breaches any of its obligations under this Article, the grant may be reduced (see Article 43). Such breaches may also lead to the any of the other measures described in Chapter 6. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 206 ‘Results’ means the action’s tangible outputs (e.g. prototypes, micro-organisms) and intangible outputs (e.g. know-how, formulas), as well as related rights (e.g. patent rights and database rights). Results do not include the outputs of activities not described in Annex 1, produced before the action starts, during its course or after it ends. Best practice: To avoid or resolve ownership disputes, beneficiaries should keep documents such as laboratory notebooks to show how and when they produced the results. Specific cases (ownership of results): Automatic joint ownership — If beneficiaries have jointly generated results and it is not possible to establish their respective contribution (or to separate them for protection), the beneficiaries automatically become joint owners. In this case, the beneficiaries concerned must conclude a joint ownership agreement (in writing). This agreement should cover in particular:  specific conditions for granting licenses (if they are different from those already set out in the GA)  criteria or principles for ‘fair and reasonable compensation’ to be provided to the other joint owners, if a non-exclusive license is granted to a third party (if appropriate) A ceiling for fair and reasonable compensation should be fixed only if the expected results can be determined with precision already before the action starts.  how disputes will be settled (e.g. via a mediator, applicable law, etc.). Best practice: To make it easier to negotiate a joint-ownership agreement, the beneficiaries should include general principles on joint ownership already in the consortium agreement. The joint ownership agreement will usually require further fine-tuning after the jointly-owned results are produced, in particular with regard to:  how the ownership is divided (e.g. equally or not)  if and how the joint results will be protected, including issues related to the cost of protection (e.g. patent filing and examination fees, renewal fees, prior state-of-the-art searches, infringement actions, etc.), or to the sharing of revenues or profits  how the joint results will be exploited and disseminated. The joint owners automatically have the right under the GA to grant non-exclusive licenses to third parties against fair and reasonable compensation (without prior authorisation from the other joint owners) — unless otherwise provided in the joint ownership agreement. The joint owner that intends to grant the licence must give the other joint owners at least 45 days advance notice (together with sufficient information, to check if the proposed compensation is fair and reasonable). Such licenses may not include sub-licensing. Joint owners are free to agree on different arrangements in their joint-ownership agreement. Joint owners may abandon joint ownership only after the jointly-owned results have been produced ( new in Horizon 2020). Example: Once the results have been produced, the joint owners may transfer ownership to a single owner and agree on more favourable access rights (or on any other fair counterpart) Joint ownership by agreement — Outside the cases described above, the beneficiaries may also become joint owners if they specifically agree on it. Example: A beneficiary may decide that a part of its results will be owned jointly with its parent company or another third party. However, this requires a (partial) transfer of ownership, which is subject to the GA’s rules on transferring ownership. EU/Euratom/Agency ownership to protect results — If valuable results are not protected (e.g. if the official prosecution or renewal fees for a patent application are not paid), the Commission/Agency may — under certain circumstances — assume ownership of the results. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 207 2. Third parties with rights on results The beneficiaries must ensure that they can fulfil their obligations under the GA regarding results, by making arrangements with any third parties that could claim rights to them (e.g. employees, subcontractors, linked third parties etc.). Examples (third parties that may claim rights): academic institutions in countries that have a kind of ‘professor’s privilege’ system (according to which researchers may have some rights to the results of university research); employees or students who carry out work for the action; beneficiaries for which linked third parties carry out a significant part of the work. Examples (arrangements): transferring ownership to the beneficiary; granting access rights to the beneficiary with a right to sub-license. Specific cases (third parties with rights on results): Joint research units (JRUs) — Where the internal arrangements of a JRU (see Article 14), state that any results produced by one member are owned jointly by all members, these other members are third parties that can claim rights on the results. In this case, the JRU member that is the beneficiary must ensure that it can fulfil its contractual obligations under the GA (e.g. with regard to other beneficiaries’ access rights). Best practice: Beneficiaries that are members of a JRU should inform the other beneficiaries as soon as possible, to give them time to make, if needed, appropriate arrangements in the consortium agreement. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 208 ARTICLE 27 — PROTECTION OF RESULTS — VISIBILITY OF EU FUNDING 1. Protection of results The beneficiaries must — for any results that can reasonably be expected to be commercially or industrially exploited —: – examine the possibility of protecting them and – if possible, reasonable and justified, protect them even if this requires further research and development or private investment. Example (no protection necessary): if protection is ‘impossible under Union or national law or not justified (in view of the (potential) commercial or industrial exploitation, the action’s objective and other relevant elements, such as potential markets and countries in which competitors are located, whether additionally protecting a part of certain technology would bring significantly broader protection or not, etc. Best practice: Beneficiaries should consider seeking expert advice to help them decide whether and how to protect results. ARTICLE 27 — PROTECTION OF RESULTS — VISIBILITY OF EU FUNDING 27.1 Obligation to protect the results Each beneficiary must examine the possibility of protecting its results and must adequately protect them — for an appropriate period and with appropriate territorial coverage — if: (a) the results can reasonably be expected to be commercially or industrially exploited and (b) protecting them is possible, reasonable and justified (given the circumstances). When deciding on protection, the beneficiary must consider its own legitimate interests and the legitimate interests (especially commercial) of the other beneficiaries. 27.2 [EU][Euratom][Agency] ownership, to protect the results If a beneficiary intends not to protect its results, to stop protecting them or not seek an extension of protection, [the EU][Euratom][the Agency] may — under certain conditions (see Article 26.4) — assume ownership to ensure their (continued) protection. 27.3 Information on EU funding Applications for protection of results (including patent applications) filed by or on behalf of a beneficiary must — unless the [Commission][Agency] requests or agrees otherwise or unless it is impossible — include the following: ‘The project leading to this application has received funding from the [European Union’s Horizon 2020 research and innovation programme][Euratom research and training programme 2014-2018] under grant agreement No [number]’. 27.4 Consequences of non-compliance If a beneficiary breaches any of its obligations under this Article, the grant may be reduced (see Article 43). Such a breach may also lead to any of the other measures described in Chapter 6. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 209 This obligation also applies to beneficiaries not receiving EU funding (see Article 9). The beneficiaries are in principle free to choose any available form of protection. Classic forms of protection:  Patent  Trademark  Industrial design  Copyright  Trade-secret  Confidentiality The choice of the most suitable form should be made on the basis of the specificities of the action and the type of result (i.e. the form which offers the most adequate and effective protection). Although important for commercial and industrial exploitation, IP protection is not mandatory. Examples (choice according to the type of result): For an invention: e.g. patent, confidential information. For the design of a technology: e.g. industrial design, copyright. For a website: e.g. industrial design, copyright, trademark. In some cases, it may be advisable to protect the invention by keeping it confidential, or to postpone the filing of a patent (or other IPR) application. Example: Keeping an invention temporarily confidential could allow further development of the invention while avoiding the negative consequences associated with premature filing (earlier priority and filing dates, early publication, possible rejection due to lack of support or industrial applicability, etc.). Costs related to protection may be eligible (see Article 6.2.D.3). When deciding on protection, the beneficiaries must also consider the other beneficiaries’ legitimate interests. Any other beneficiary invoking legitimate interests must show how the decision would significantly harm it (especially commercially). Example (harm): The protection would lead to the disclosure of valuable background that is held by the other beneficiary (as a trade secret or flagged as confidential). Best practice: Although a beneficiary is not required to consult the other beneficiaries before deciding whether to protect a specific result it owns, beneficiaries can foresee arrangements (either in the consortium agreement or in separate agreements), to ensure that decisions on protection take due account of the interests of all beneficiaries concerned. Protection should last for an appropriate period and have appropriate territorial coverage (in view of potential) commercial or industrial exploitation and other elements (e.g. potential markets and countries in which potential competitors are located). Patent applications should identify the rightful inventors. Errors (or fraud) in identifying inventors may lead to the invalidation of patents. Example (not rightful inventor): an entity systematically designates a head of department as one of the inventors, although it is not true. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 210 2. Visibility of EU funding Applications for protection must include the reference to EU funding set out in the GA — unless (technically or legally) impossible (see Article 38). Best practice: Where possible, beneficiaries should make this reference in the language of their application (i.e. use where relevant the wording from the corresponding translation of the MGA that is available on the Participant Portal Reference documents page). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 211 ARTICLE 28 — EXPLOITATION OF RESULTS 1. Exploitation of results The beneficiaries must take measures aiming to ensure exploitation of their results — either by themselves (e.g. for further research or for commercial or industrial exploitation in its own activities) or by others (other beneficiaries or third parties, e.g. through licensing or by transferring the ownership of results). The obligation applies only to beneficiaries receiving EU funding (see Article 9). This is a best effort obligation: The beneficiaries must be proactive and take specific measures to ensure that their results are used (to the extent possible and justified). ARTICLE 28 — EXPLOITATION OF RESULTS 28.1 Obligation to exploit the results Each beneficiary must — up to four years after the period set out in Article 3 — take measures aiming to ensure ‘exploitation’ of its results (either directly or indirectly, in particular through transfer or licensing; see Article 30) by: (a) using them in further research activities (outside the action); (b) developing, creating or marketing a product or process; (c) creating and providing a service, or (d) using them in standardisation activities. [OPTION for additional exploitation obligations if foreseen in the work programme: In addition, the beneficiaries must — up to four years after the period set out in Article 3 — comply with the additional exploitation obligations set out in Annex 1.] This does not change the security obligations in Article 37, which still apply. 28.2 Results that could contribute to European or international standards — Information on EU funding [OPTION for results that could contribute to standards if foreseen in the work programme: If results could reasonably be expected to contribute to European or international standards, the beneficiary concerned must — up to four years after the period set out in Article 3 — inform the [Commission][Agency].] If results are incorporated in a standard, the beneficiary concerned must — unless the [Commission][Agency] requests or agrees otherwise or unless it is impossible — ask the standardisation body to include the following statement in (information related to) the standard: ‘Results incorporated in this standard received funding from the [European Union’s Horizon 2020 research and innovation programme][Euratom research and training programme 2014-2018] under grant agreement No [Number]’. 28.3 Consequences of non-compliance If a beneficiary breaches any of its obligations under this Article, the grant may be reduced in accordance with Article 43. Such a breach may also lead to any of the other measures described in Chapter 6. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 212 Where possible, the measures should be consistent with the impact expected from the action and the ‘plan for the exploitation and dissemination of the results’. If the GA provides for additional exploitation obligations, these must also be fulfilled. (Such additional exploitation obligations will already be mentioned in the work programme/call.) If the GA includes the option for information on standardisation, the beneficiaries must moreover inform the Commission/Agency on any results that could contribute to European or international standards. Example: The results are produced in an area in which standards play an important role (such as in mobile communication, diagnostics or immunological diseases). Additional exploitation obligations apply to ALL beneficiaries. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 213 ARTICLE 29 — DISSEMINATION OF RESULTS — OPEN ACCESS — VISIBILITY OF EU FUNDING ARTICLE 29 — DISSEMINATION OF RESULTS — OPEN ACCESS — VISIBILITY OF EU FUNDING 29.1 Obligation to disseminate results Unless it goes against their legitimate interests, each beneficiary must — as soon as possible — ‘disseminate’ its results by disclosing them to the public by appropriate means (other than those resulting from protecting or exploiting the results), including in scientific publications (in any medium). [OPTION for additional dissemination obligations if foreseen in the work programme: In addition, the beneficiaries must comply with the additional dissemination obligations set out in Annex 1.] [OPTION for additional dissemination obligations for interoperability if foreseen in the work programme: Moreover, the beneficiaries must — up to four years after the period set out in Article 3 — disseminate any technical specifications of the results that are needed for interoperability.] [OPTION for additional dissemination obligations for cross-border interoperability if foreseen in the work programme: Moreover, the beneficiaries must — up to four years after the period set out in Article 3 — disseminate the deliverables relating to cross-border interoperability (see Annex 1) and any results needed for cross-border interoperability (in particular common technical specifications and software components).] This does not change the obligation to protect results in Article 27, the confidentiality obligations in Article 36, the security obligations in Article 37 or the obligations to protect personal data in Article 39, all of which still apply. A beneficiary that intends to disseminate its results must give advance notice to the other beneficiaries of — unless agreed otherwise — at least 45 days, together with sufficient information on the results it will disseminate. Any other beneficiary may object within — unless agreed otherwise — 30 days of receiving notification, if it can show that its legitimate interests in relation to the results or background would be significantly harmed. In such cases, the dissemination may not take place unless appropriate steps are taken to safeguard these legitimate interests. If a beneficiary intends not to protect its results, it may — under certain conditions (see Article 26.4.1) — need to formally notify the [Commission][Agency] before dissemination takes place. 29.2 Open access to scientific publications Each beneficiary must ensure open access (free of charge, online access for any user) to all peer-reviewed scientific publications relating to its results. In particular, it must: (a) as soon as possible and at the latest on publication, deposit a machine-readable electronic copy of the published version or final peer-reviewed manuscript accepted for publication in a repository for scientific publications; Moreover, the beneficiary must aim to deposit at the same time the research data needed to validate the results presented in the deposited scientific publications. (b) ensure open access to the deposited publication — via the repository — at the latest: (i) on publication, if an electronic version is available for free via the publisher, or (ii) within six months of publication (twelve months for publications in the social sciences and humanities) in any other case. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 214 (c) ensure open access — via the repository — to the bibliographic metadata that identify the deposited publication. The bibliographic metadata must be in a standard format and must include all of the following: - the terms [‘European Union (EU)’ and ‘Horizon 2020’][‘Euratom’ and Euratom research and training programme 2014-2018’]; - the name of the action, acronym and grant number; - the publication date, and length of embargo period if applicable, and - a persistent identifier. 29.3 Open access to research data [OPTION for actions participating in the open Research Data Pilot: Regarding the digital research data generated in the action (‘data’), the beneficiaries must: (a) deposit in a research data repository and take measures to make it possible for third parties to access, mine, exploit, reproduce and disseminate — free of charge for any user — the following: (i) the data, including associated metadata, needed to validate the results presented in scientific publications as soon as possible; (ii) other data, including associated metadata, as specified and within the deadlines laid down in the ‘data management plan’ (see Annex 1); (b) provide information — via the repository — about tools and instruments at the disposal of the beneficiaries and necessary for validating the results (and — where possible — provide the tools and instruments themselves). This does not change the obligation to protect results in Article 27, the confidentiality obligations in Article 36, the security obligations in Article 37 or the obligations to protect personal data in Article 39, all of which still apply. As an exception, the beneficiaries do not have to ensure open access to specific parts of their research data if the achievement of the action’s main objective, as described in Annex 1, would be jeopardised by making those specific parts of the research data openly accessible. In this case, the data management plan must contain the reasons for not giving access.] [OPTION: Not applicable] 29.4 Information on EU funding — Obligation and right to use the EU emblem Unless the [Commission][Agency] requests or agrees otherwise or unless it is impossible, any dissemination of results (in any form, including electronic) must: (a) display the EU emblem and (b) include the following text: ‘This project has received funding from the [European Union’s Horizon 2020 research and innovation programme][Euratom research and training programme 2014-2018] under grant agreement No [Number]’. When displayed together with another logo, the EU emblem must have appropriate prominence. For the purposes of their obligations under this Article, the beneficiaries may use the EU emblem without first obtaining approval from the [Commission][Agency]. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 215 1. Dissemination of results Unless it goes against their legitimate interests, the beneficiaries must — as soon as possible (but not before a decision on their possible protection) — disseminate their results (i.e. make them public). Disclosing of results of activities raising security issues requires prior approval from the Commission/Agency (see Article 37). Results that are disclosed too early (i.e. before the decision on their protection) run the risk being invalidated. Example: If a result is disclosed (in writing (including by e-mail) or orally (e.g. at a conference) prior to filing for protection — even to a single person who is not bound by secrecy or confidentiality obligations (typically someone from an organisation outside the consortium). NO dissemination at all may take place, if:  the results need to be protected as a trade secret (i.e. confidential know-how) or  dissemination conflicts with any other obligations under the GA (e.g. personal data protection, security-related obligations, etc.). The beneficiaries may choose the form for disseminating their results. Classic forms of dissemination:  website  presentation at a scientific conference  peer reviewed publication The dissemination measures should however be consistent with the ‘plan for the exploitation and dissemination of the results’ and proportionate to the impact expected from the action. When deciding on dissemination, the beneficiaries must also consider the other beneficiaries’ legitimate interests. The beneficiary that intends to disseminate must give the other beneficiaries — unless otherwise agreed — at least 45 days advance notice (together with sufficient information on the dissemination). This does not however give them the right to exclusive use. Moreover, they may not appropriate the EU emblem or any similar trademark or logo, either by registration or by any other means. 29.5 Disclaimer excluding [Commission][Agency] responsibility Any dissemination of results must indicate that it reflects only the author’s view and that the [Commission][Agency] is not responsible for any use that may be made of the information it contains. 29.6 Consequences of non-compliance If a beneficiary breaches any of its obligations under this Article, the grant may be reduced (see Article 43). Such a breach may also lead to any of the other measures described in Chapter 6. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 216 Any other beneficiary may object to dissemination— unless otherwise agreed — within 30 days of receiving notification, if it can show that it would suffer significant harm (in relation to background or results). In this case, the results may not be disseminated — unless appropriate steps are taken to safeguard the interests at stake. Examples (significant harm): Disseminating the results would lead to disclosure of valuable background held by another beneficiary as a trade secret or would make protecting another beneficiary’s results more difficult. Appropriate steps could include: omitting certain data or postponing dissemination until the results are protected. Best practice: Beneficiaries should foresee arrangements (either in the consortium agreement or in separate agreements) to ensure that decisions on dissemination take due account of the interests of all beneficiaries concerned (and yet allow for publication of results without unreasonable delay). If the GA provides for additional dissemination obligations, these must also be fulfilled. Such additional dissemination obligations will already be mentioned in the work programme/call. 2. Open access to scientific publications What? Beneficiaries must ensure open, free-of-charge access to the end-user to peer-reviewed scientific publications relating to their results. ‘Peer-reviewed publications’ means publications that have been evaluated by other scholars (e.g. articles in scientific journals). Open access means ensuring that, at the very least, such publications can be read online, downloaded and printed — via a repository for scientific publications. Best practice: Open access has no impact on the other terms and conditions that apply to scientific publications (e.g. as regards use, etc). However, in order to increase the utility of the publication, beneficiaries are encouraged to provide additional rights such as the right to copy, distribute, search, link, crawl and mine). A ‘repository for scientific publications’ is an online archive. Beneficiaries are free to choose the repository; it can be institutional, subject-based or centralised. Best practice: The Open Access Infrastructure for Research in Europe (OpenAIRE) links existing repositories. It is not obligatory for projects to deposit in OpenAIRE itself, but it is the recommended entry point for researchers deciding on a repository. OpenAIRE also offers support services for researchers, such as the National Open Access Desks. Other useful listings are the Registry of Open Access Repositories (ROAR), the Directory of Open Access Repositories (OpenDOAR) and OAPEN (for monographs). Beneficiaries should not choose a repository with rules which could conflict with open access. Open access does NOT imply that the beneficiaries are obliged to publish their results; it only sets certain requirements that must be fulfilled if they do decide to publish them. Open access can be provided through: a) ‘gold open access’ (also called ‘open-access publishing’) Other types of scientific publications, such as non-peer-reviewed articles as well as monographs, books, conference proceedings and ‘grey literature’ (i.e. informally published material not having gone through a classic publishing process, e.g. reports), are not covered by the open access obligation. Best practice: However, to ensure fuller and wider access, beneficiaries are encouraged to provide open access also to these other types of scientific publications (where possible). . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 217 ‘Gold open access’ means that open access is provided immediately via the publisher when an article is published, i.e. where it is published in open access journals or in ‘hybrid’ journals combining subscription access and open access to individual articles. In gold open access, the payment of publication costs (‘article processing charges’) is shifted from readers’ subscriptions to (generally one-off) payments by the author. Such author processing costs may be eligible (see Article 6.2.D.3) — if incurred before the end of the action. Currently, an action for dealing with such costs incurred after the end of the action in FP7 is being piloted and further action in Horizon 2020 will be considered based on the outcome. b) ‘green open access’ (also called ‘self-archiving’). ‘Green open access’ means that the published article or the final peer-reviewed manuscript is archived by the researcher (or a representative) in an online repository. Access to the article is often — but not necessarily — delayed (H2020 ‘embargo period’ between 6 and 12 months; see below) as some scientific publishers may wish to recoup their investment by selling subscriptions and charging pay-per-download view fees during an exclusivity period. Best practice: Authors are encouraged to retain their copyright and grant appropriate licences to publishers. How? Open access to scientific publications involves four steps — which may or may not be taken at the same time: Procedure for open access (scientific publications): Step 1 — Deposit, in a repository for scientific publications, a machine-readable electronic copy of the published version of the publication (or the final peer-reviewed manuscript as accepted for publication). This must be done as soon as possible (in some cases, the final version can be deposited before publication, e.g. once accepted by the journal) and at the latest on publication. ‘Machine readable copy’ means a format that can be used and understood by a computer; copies must be stored using text file formats that are either standardised or otherwise publicly known, so that anyone can develop new tools for working with them. Best practice: Where possible, the article as published (in terms of layout, pagination, etc.) should be deposited. Step 2 — Provide open access to the scientific publication — either as ‘gold open access’ (i.e. via the publisher AND via the repository) or as ‘green open access’ (i.e. via the repository only). Open access must be given:  in case of ‘gold open access’: at the latest on publication  in all other cases: within 6 months (12 months for publications in the social sciences and humanities) Step 3 — Ensure open access, via the repository, to certain bibliographic metadata that identify the publication This is needed for visibility, traceability and monitoring. Although gold open access already ensures access via the publisher, the beneficiaries must nevertheless also provide open access via a repository (see below) in order to ensure the long-term preservation and availability of the publication. . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 218 It must be done in a standard format and include:  the terms ‘European Union (EU)’ and ‘Horizon 2020’ or ‘Euratom’ and Euratom research and training programme 2014-18’ (depending on the grant)  the name of the action, acronym and grant number  the publication date, and length of embargo period if applicable and  a ‘persistent identifier’ (e.g. a stable digital object identifier which identifies the publication and links to an authoritative version). The metadata compliance of the repository can be checked using OpenAIRE. Step 4 — Aim to deposit at the same time, ideally in a data repository, the research data needed to validate the results in the deposited publication. This is linked to rapid evolution of the concept of ‘publication’ in the digital era. The underlying data needed to validate the results presented in scientific publications is now seen as a crucial part of the publication and therefore an important element of scientific best practice. 3. Open access to research data (‘Pilot on Open Research Data’) What? Beneficiaries of actions that participate in the Pilot on Open Research Data must give open, free- of-charge access to the end-user to specified digital research data generated during the action ( new in Horizon 2020). ‘Digital research data’ is information in digital form (in particular facts or numbers), collected to be examined and used as a basis for reasoning, discussion or calculation; this includes statistics, results of experiments, measurements, observations resulting from fieldwork, survey results, interview recordings and images. The pilot applies to two types of digital research data:  the data needed to validate the results presented in scientific publications and associated metadata (i.e. data describing the deposited research data) and  other data (e.g. curated data not directly attributable to a publication or raw data) and associated metadata, as specified by the beneficiaries in their ‘data management plan’ (see below). For more information on why open access to scientific publications and digital research data is an important aspect of Horizon 2020, see the Online Manual. Beneficiaries do NOT have to grant open access to the deposited underlying research data — unless they are participating in the Pilot on Open Research Data (see below). . For certain areas (‘core areas’), the work programme foresees automatic participation in the pilot, but actions may opt out if they have good reason to do so. In other areas, actions may participate in the pilot on a voluntary basis (‘opt in’). After signing the GA, actions may always opt out or opt in (via an amendment; see Article 55). . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 219 Open access means taking measures to make it possible for third parties to access, mine, exploit, reproduce and disseminate data — via a research data repository. A ‘research data repository’ means an online archive for research data; this can be subject- based/thematic, institutional or centralised. Best practice: Useful listings of repositories include the Registry of Research Data Repositories (Re3data) and Databib. One key entry point for accessing and depositing related data and tools is Zenodo. Actions participating in the pilot must draw up a ‘data management plan (DMP)’ within the first six months of the project implementation. The DMP must support the management life-cycle for all data that will be collected, processed or generated by the action. It must include:  what data the action will generate  whether and how it will be made accessible and  how it will be maintained and preserved. The DMP must be updated and completed (i.e. become more precise) as the project evolves. New versions of the DMP should be created whenever important changes to the project occur (due to inclusion of new data sets, changes in consortium policies or external factors). Costs relating to the implementation of the pilot (e.g. costs related to research data management, data curation and data storage) may be eligible (see Article 6.2.D.3). How? Open access to digital research data involves 3 steps: Procedure for open access (research data): Step 1 — Deposit the digital research data, preferably in a research data repository. Step 2 — Provide open access by taking measures to enable users to access, mine, exploit, reproduce and disseminate the data free of charge (e.g. by attaching a ‘creative commons licence’ (CC-BY or CC0 tool) to the data). Open access must not be given immediately; for data needed to validate the results presented in scientific publications, as soon as possible; for other data, beneficiaries are free to specify embargo periods for their data in the data management plan (as appropriate in their scientific area). Step 3 — Provide information, via the repository, about tools and instruments for validating the results. Where possible, the beneficiaries should provide those tools and instruments (e.g. specialised software or software code, algorithms, analysis protocols, etc.). Beneficiaries may decide not to provide open access to specific datasets, if justified in Annex 1, if this would put into question the respect of other GA obligations or if the action’s main objective would be jeopardised by making specific parts of the research data openly accessible (This must be explained in the data management plan, see below). For more information on data management plans (and a template), see the proposal forms and the Online Manual on the Participant Portal. For more information on the research data pilot (and especially how actions may opt out or opt in), see the Online Manual. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 220 4. Visibility of EU funding Any dissemination of results (in any form), even when combined with other data, must include the reference to EU funding set out in the GA (see Article 38). Best practice: Where possible, beneficiaries should make this reference in the language of the dissemination activity (i.e. use where relevant the wording from the corresponding translation of the MGA that is available on the Participant Portal Reference documents page). Do NOT refer to EU funding when describing outputs of activities that are not described in Annex I, i.e. outputs developed outside the action (in other words for dissemination activities which do not concern results of the action). If those outputs were developed in another EU-funded action (funded not by H2020, but another EU funding programme — including grants awarded by a Member State or by bodies other than the Commission/Agency for the purpose of implementing the EU or Euratom budget, such as for instance the Structural Funds or ESIF Funds), do NOT however forget the visibility obligations under those grant agreements. . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 221 ARTICLE 30 — TRANSFER AND LICENSING OF RESULTS ARTICLE 30 — TRANSFER AND LICENSING OF RESULTS 30.1 Transfer of ownership Each beneficiary may transfer ownership of its results. It must however ensure that its obligations under Articles 26.2, 26.4, 27, 28, 29, 30 and 31 also apply to the new owner and that this owner has the obligation to pass them on in any subsequent transfer. This does not change the security obligations in Article 37, which still apply. Unless agreed otherwise (in writing) for specifically-identified third parties or unless impossible under applicable EU and national laws on mergers and acquisitions, a beneficiary that intends to transfer ownership of results must give at least 45 days advance notice (or less if agreed in writing) to the other beneficiaries that still have (or still may request) access rights to the results. This notification must include sufficient information on the new owner to enable any beneficiary concerned to assess the effects on its access rights. Unless agreed otherwise (in writing) for specifically-identified third parties, any other beneficiary may object within 30 days of receiving notification (or less if agreed in writing), if it can show that the transfer would adversely affect its access rights. In this case, the transfer may not take place until agreement has been reached between the beneficiaries concerned. 30.2 Granting licences Each beneficiary may grant licences to its results (or otherwise give the right to exploit them), if: (a) this does not impede the access rights under Article 31 and (b) [OPTION if additional exploitation obligations in Annex 1: the beneficiary complies with its additional exploitation obligations (see Article 28.1 and Annex 1)] [OPTION: not applicable]. In addition to Points (a) and (b), exclusive licences for results may be granted only if all the other beneficiaries concerned have waived their access rights (see Article 31.1). This does not change the dissemination obligations in Article 29 or security obligations in Article 37, which still apply. 30.3 [Commission][ Agency] right to object to transfers or licensing [OPTION for EU grants: The [Commission][Agency] may — up to four years after the period set out in Article 3 — object to a transfer of ownership or the exclusive licensing of results, if: (a) it is to a third party established in a non-EU country not associated to Horizon 2020 and (b) the [Commission][Agency] considers that the transfer or licence is not in line with EU interests regarding competitiveness or is inconsistent with ethical principles or security considerations. A beneficiary that intends to transfer ownership or grant an exclusive licence must formally notify the [Commission][Agency] before the intended transfer or licensing takes place and: - identify the specific results concerned; - describe in detail the new owner or licensee and the planned or potential exploitation of the results, and - include a reasoned assessment of the likely impact of the transfer or licence on EU competitiveness and its consistency with ethical principles and security considerations. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 222 The [Commission][Agency] may request additional information. If the [Commission][Agency] decides to object to a transfer or exclusive licence, it must formally notify the beneficiary concerned within 60 days of receiving notification (or any additional information it has requested). No transfer or licensing may take place in the following cases: pending the [Commission][Agency] decision, within the period set out above; if the [Commission][Agency] objects; until the conditions are complied with, if the [Commission][Agency] objection comes with conditions.] [OPTION for Euratom grants: The Commission may [OPTION:— up to four years after the period set out in Article 3 —] object to a transfer of ownership or the exclusive or non-exclusive licensing of results, if: (a) it is to a third party established in a non-EU country not associated to the Euratom research and training programme 2014-2018, and (b) the Commission considers that the transfer or licence is not in line with the EU interests regarding competitiveness or is inconsistent with ethical principles or security considerations. Security considerations include the defence interests of the Member States under Article 24 of the Euratom Treaty. A beneficiary that intends to transfer ownership or grant a licence must formally notify the Commission before the intended transfer or licensing takes place and: - identify the specific results concerned; - describe in detail the results, the new owner or licensee and the planned or potential exploitation of the results, and - include a reasoned assessment of the likely impact of the transfer or licence on EU competitiveness and its consistency with ethical principles and security considerations. The Commission may request additional information. If the Commission decides to object to a transfer or licence, it will formally notify the beneficiary concerned within 60 days of receiving notification (or any additional information requested). No transfer or licensing may take place in the following cases: pending the Commission decision, within the period set out above; if the Commission objects; until the conditions are complied with, if the Commission objection comes with conditions ] [OPTION: Not applicable] 30.4 Consequences of non-compliance If a beneficiary breaches any of its obligations under this Article, the grant may be reduced (see Article 43). Such a breach may also lead to any of the other measures described in Chapter 6. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 223 1. Transfers of ownership The beneficiaries may transfer ownership of their results — unless prohibited (or restricted) by security-related obligations (see Article 37). The beneficiaries must however ensure that their obligations (regarding the results) apply to the new owner and that this new owner would pass them on in any subsequent transfer (e.g. by including this in their arrangements with the new owner). Obligations that must be extended to new owners:  Joint ownership-related obligations (see Article 26.2)  EU/Euratom/Agency’s right to assume ownership, to protect results (see Article 26.4)  Protection of results and visibility of EU funding (see Article 27)  Exploitation of results and visibility of EU funding (see Article 28)  Dissemination of results, open access and visibility of EU funding (see Article 29)  Transfer and licensing of results (see Article 30)  Access rights to result (see Article 31). When transferring ownership, they must also consider the other beneficiaries’ legitimate interests. The beneficiary that intends to make the transfer must give the other beneficiaries (that still have or still may request access rights) at least 45 days (or less if agreed in writing) advance notice (together with sufficient information to allow them to properly assess the extent to which their access rights may be affected). Any other beneficiary (with such access rights) may object to the transfer within 30 days (or less if agreed in writing) of receiving notification, if it can show that it would adversely affect its access rights. In this case, the transfer may not take place, until the beneficiaries concerned reach an agreement. The mere fact that the results concerned are transferred to a competitor is NOT in itself a valid reason for an objection. The beneficiary concerned must demonstrate the adverse effects on the exercise of its access rights. Example (adverse effect): Beneficiary A intends to transfer ownership of a new process it created during the course of an action to a competitor of beneficiary B. If beneficiary B shows that its access rights would be adversely affected by such a transfer (for instance, because the competitor has a proven track record of systematically legally challenging beneficiary B’s claims), the transfer may not take place until the two beneficiaries reach an agreement. Specific cases (transfers of ownership of results): Mergers & acquisitions (M&A) — If a transfer of ownership is not explicit (through an ‘intended’ transfer) but part of a take-over or merger of two companies, confidentiality constraints normally prevail (under M&A rules). Therefore, it may be necessary to inform the other beneficiaries only after the merger/acquisition took place (instead of before). Specifically-identified third parties — The beneficiaries may (by prior written agreement) waive their right to object to transfers of ownership to a specifically-identified third party (e.g. the mother company or an affiliate of one of them). In this case, there is no need to inform them of such transfers in advance (and they do not have the right to object). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 224 Before agreeing to such a ‘global’ authorisation, beneficiaries should carefully consider the situation (and in particular the identity of the third party concerned), to determine if their access rights would be affected. Example: For large industrial groups, it is sometimes clear from the beginning that all results produced will be transferred to another entity of the group, without being detrimental to the other beneficiaries (who agreed to the global authorisation). In security-related actions, transfers to third parties should only be decided on a case-by-case basis and should be handled with the greatest caution. If the Commission/Agency has the right to object to transfers (see point 3), a transfer to a specifically- identified third party established in a third country (i.e. not EU Member State or H2020 associated country) must be formally notified to the Commission/Agency (via the electronic exchange system; see Article 52) — and the Commission/Agency may object. Joint research units (JRUs) — Where the internal arrangements of a JRU state that any results produced by one member are owned jointly by all members, the JRU member that is the beneficiary must ensure that it complies with the obligations under the GA on transfers (placing results under joint ownership of the JRU is a form of transfer). Common legal structures — ‘Common legal structures (CLS)’ (i.e. entities representing several other legal entities, e.g. European Economic Interest Groupings (EEIG) or associations) that are beneficiaries of an action may want to transfer ownership to one (or more) of their members. This is not prohibited; however the normal rules on transfers apply (e.g. access rights have to remain available). Best practice: Beneficiaries that are members of a common legal structure are strongly advised to agree on specific arrangements with the other members of the CLS, in particular relating to ownership and access rights. 2. Granting licences The beneficiaries may grant licences to their results. They must however ensure that access rights can be exercised and that any additional exploitation obligations are complied with. Exclusive licences (e.g. for commercial exploitation) may be granted only if all other beneficiaries have waived their access rights (see Article 31). 3. Commission/Agency right to object to transfers or exclusive licensing If the GA provides for this option, the Commission/Agency may object to transfers or exclusive licences (or, for Euratom grants, also non-exclusive licences) to third parties established in a third country (i.e. not EU Member State or H2020 associated country). Grounds for objection:  Planned transfer/licence not in line with EU competitiveness interests Example: if the transfer or licence would create a major competitive disadvantage for European companies or could make the results commercially unavailable on fair and reasonable conditions in the EU  Planned transfer/licence not consistent with ethical principles Example: if the transfer or license could cause the results to be used in a way that is not in accordance with the fundamental ethical rules and principles recognised at EU and international level  Planned transfer/licence not consistent with security considerations (including, for Euratom grants, the Member States’ defence interests under Article 24 of the Euratom Treaty). Example: if the transfer or licence could make results considered significant from a security standpoint not readily available in the EU, or if security-sensitive results could fall into the hands of third parties that are considered a security risk H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 225 This right does NOT apply to results generated by beneficiaries not receiving EU funding (see Article 9). The Commission/Agency must be formally notified in advance (via the electronic exchange system; see Article 52) of any planned transfer or exclusive licence (and, for Euratom grants, also of any non-exclusive licence). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 226 ARTICLE 31 — ACCESS RIGHTS TO RESULTS ARTICLE 31 — ACCESS RIGHTS TO RESULTS 31.1 Exercise of access rights — Waiving of access rights — No sub-licensing The conditions set out in Article 25.1 apply. The obligations set out in this Article do not change the security obligations in Article 37, which still apply. 31.2 Access rights for other beneficiaries, for implementing their own tasks under the action The beneficiaries must give each other access — on a royalty-free basis — to results needed for implementing their own tasks under the action. 31.3 Access rights for other beneficiaries, for exploiting their own results The beneficiaries must give each other — under fair and reasonable conditions (see Article 25.3) — access to results needed for exploiting their own results. Requests for access may be made — unless agreed otherwise — up to one year after the period set out in Article 3. 31.4 Access rights of affiliated entities Unless agreed otherwise in the consortium agreement, access to results must also be given — under fair and reasonable conditions (Article 25.3) — to affiliated entities established in an EU Member State or associated country, if this is needed for those entities to exploit the results generated by the beneficiaries to which they are affiliated. Unless agreed otherwise (see above; Article 31.1), the affiliated entity concerned must make any such request directly to the beneficiary that owns the results. Requests for access may be made — unless agreed otherwise — up to one year after the period set out in Article 3. 31.5 Access rights for the EU institutions, bodies, offices or agencies and EU Member States [OPTION by default for EU grants: The beneficiaries must give access to their results — on a royalty-free basis — to EU institutions, bodies, offices or agencies, for developing, implementing or monitoring EU policies or programmes. Such access rights are limited to non-commercial and non-competitive use. This does not change the right to use any material, document or information received from the beneficiaries for communication and publicising activities (see Article 38.2).] [OPTION for calls under Specific Objective ‘Secure societies — Protecting freedom and security of Europe and its citizens’: The beneficiaries must give access to their results — on a royalty-free basis — to EU institutions, bodies, offices and agencies as well as EU Member States’ national authorities, necessary for developing, implementing or monitoring their policies or programmes in this area. Such access rights are limited to non-commercial and non-competitive use. Access is conditional on an agreement to define specific conditions ensuring that: (a) the access will be used only for the intended purpose and (b) appropriate confidentiality obligations are in place. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 227 1. Access to results What & When ? The beneficiaries must provide access to results, if it is needed:  by another beneficiary, for implementing action tasks or exploiting results The requesting EU Member State or EU institution, body, office or agency must inform all other EU Member States of such a request. This does not change the security obligations in Article 37, which still apply.] [OPTION for Euratom grants: The beneficiaries must give access to their results — on a royalty-free basis — to the European Atomic Energy Community (Euratom) and its joint undertakings, for developing, implementing and monitoring Euratom policies and programmes or for compliance with obligations assumed through international cooperation with third countries and international organisations. As an exception to Article 31.1, such access rights include the right to authorise third parties to use the results in public procurement and the right to sublicense and are limited to non-commercial and non-competitive use.] 31.6 Access rights for third parties [OPTION for additional access rights for complementary grants if foreseen in the work programme: The beneficiaries must give — under the conditions set out in Article 31.2 and 31.3 — access to their results to complementary beneficiaries 45 , for the purposes of the complementary grant agreement(s) (see Article 2).] [OPTION for additional access rights for interoperability if foreseen in the work programme: The beneficiaries must give third parties — up to four years after the period set out in Article 3 and [OPTION: under fair and reasonable conditions (see Article 25.3)][OPTION: on a royalty-free basis] — access to their results needed for interoperability.] [OPTION for additional access rights for cross-border interoperability if foreseen in the work programme: The beneficiaries must give third parties — up to four years after the period set out in Article 3 and on a royalty-free basis — access to their results needed for interoperability, in particular for implementing the results in EU Member States or associated countries that are not participating in the action. Beneficiaries must give access to software components under an EU public licence (or compatible licences) and must comply with any additional requirements set out in in Annex 1.] [OPTION for trans-national access to research infrastructure: The access provider must give the users royalty-free access to the results needed to implement the action.] [OPTION: Not applicable] 31.7 Consequences of non-compliance If a beneficiary breaches any of its obligations under this Article, the grant may be reduced (see Article 43). Such breaches may also lead to any of the other measures described in Chapter 6. 45 'Complementary beneficiary' means a beneficiary of a complementary grant agreement 40 ‘Complementary beneficiary’ means a beneficiary of a complementary grant agreement. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 228  by an affiliated entity (established in a EU Member State or H2020 associated country), to exploit the results produced by the beneficiary to which it is affiliated — unless otherwise provided for in the consortium agreement. There is NO definition of ‘needed’. The beneficiary owning the results has to assess (on a case by case basis and taking into account the action’s specificities), if the requesting beneficiary needs the access (and may refuse it, if it does not). Example (results needed for implementation): if without these results, action tasks could not be implemented, would be significantly delayed or would require significant additional financial or human resources. Example (background needed for exploitation): if without these results, exploiting a result would be technically or legally impossible or if significant additional R&D work would have to be carried out outside of the action to develop an alternative equivalent solution. Best practice: To avoid conflicts, beneficiaries should agree (e.g. in the consortium agreement) on a common interpretation of what is needed. The other beneficiaries may waive their access rights, provided that such a waiver is made in writing. Best practice: Waivers should be made only on a case-by-case basis, once the results have been correctly identified, and should not be broader than what is actually necessary. Examples: If a waiver is made to allow for an exclusive licence, this waiver should not be broader than what is required for the purpose of the licence (regarding application fields, geographical coverage, etc.). If a waiver is made to allow for an exclusive licence, it may be wise that the beneficiaries agree that the waiver will lapse, if the license is not granted within a certain period or if the results concerned are not exploited by the licensee within a certain period. How? Access rights are not automatic; they must be requested (in writing). Best practice: Beneficiaries may use their internal rules to specify how to make such written requests. It may be requested even from beneficiaries whose participation was terminated before the end of the action, under the same conditions as from active participants. For affiliated entities (established in a EU Member State or H2020 associated country), access must be requested directly from the beneficiary owning the results. However, the beneficiary owning the results may agree to a different arrangement. Access to results for exploitation may be requested up to one year after the period set out in Article 3 — unless the beneficiaries agreed on another time limit. The agreement by the beneficiary owning the results (on the request for access) may be in any form (tacit, explicit, in writing or oral). In case of disagreement, the requesting beneficiary can better substantiate its request, withdraw it or resort to the conflict resolution procedures foreseen by the consortium (e.g. in the consortium agreement). If a conflict on access rights to results is likely to affect the action implementation, the beneficiaries must immediately inform the Commission/Agency (see Article 17.2). 2. Conditions for access: Royalty free — Fair and reasonable conditions Access must be given:  for the implementation of action tasks: royalty-free H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 229  for the exploitation of results: under fair and reasonable conditions ‘Fair and reasonable conditions’ means appropriate conditions, including possible financial terms (i.e. monetary compensation), non-financial terms or royalty-free conditions, taking into account the specific terms of the granted access. ‘Fair and reasonable conditions’ includes also royalty-free conditions ( new in Horizon 2020). Examples (monetary compensation): a lump sum, a royalty percentage, or a combination of both. Examples (non-financial terms): a requirement to grant access to technology it has, or to agree on cooperation in a different field or in a future project. Best practice: Beneficiaries must agree on what constitutes fair and reasonable conditions, preferably in writing. Royalty fees paid for access may be eligible costs (see Article 6.2.D.3). 3. Scope of access: Sublicencing/Licensing — Additional access rights — More favourable terms — Additional conditions The access rights set out in the GA cover only the access needed. Access rights do NOT automatically give the right to the requesting beneficiary to sub- licence. (If this were the case, access rights to results would be extended — without consent — to virtually any company in the world, including the beneficiary’s competitors). Sub-licensing is only allowed if the beneficiary owning the results agrees — although such agreement should not be unduly refused, if the sublicensing is necessary. In this case the sub-licensing does not have to be royalty-free (even if the access rights concerned are) and can itself be made subject to specific conditions. Examples: A university may need the right to sub-license access to results to third parties, to make it possible to derive value from its own results. In large industrial groups it is quite common that research is conducted by one affiliate and exploitation by one or several other affiliates. Access rights enjoyed by the ‘research affiliate’ but not by the ‘exploitation affiliate(s)’ would raise problems for them. Best practice: The beneficiaries should agree on the terms and conditions of the sub- licensing generally and in writing (in the consortium agreement or separately). Examples: In such an agreement, they could foresee that sub-licensing could apply to the results (or part of them), but not to the background; sub-licensing could apply to affiliates of (some of) the beneficiaries, but not to other third parties. The beneficiaries remain free to grant licenses (including quasi-exclusive licenses) to their own results, as long as they can guarantee that all the access rights can be exercised. They can even grant an exclusive licence, if the other beneficiaries have waived their access rights. Beneficiaries are free to grant additional access rights to results, beyond the rights foreseen in the GA. Examples: Additional access rights for third parties (e.g. affiliated entities not established in an EU Member State or H2020 associated country). Best practice: Such additional provisions may be included in the consortium agreement or in a separate agreement. Access may also be granted on more favourable terms (e.g. include the right to sub-licence) or be made subject to additional conditions (e.g. appropriate confidentiality obligations, obligations related to existing license agreements). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 230 Example: The beneficiary owning the results agrees that another beneficiary may sublicense its access rights to results to its affiliated entity. Best practice: For legal certainty, beneficiaries should to specify these terms or conditions in writing. Once obtained, access rights may be exercised as long as agreed by the concerned beneficiaries (e.g. until the patent expires). 4. Specific access rights for EU institutions, bodies, offices or agencies and EU Member States If the GA provides for this option, EU institutions, bodies, offices or agencies and/or EU Member States have specific access rights for policy purposes. 5. Specific access rights for Euratom and its joint undertakings If the GA provides for this option, Euratom and its joint undertakings (such as the Fusion for Energy joint undertaking) have royalty-free access, for:  developing, implementing and monitoring Euratom policies and programmes  complying with Euratom’s obligations under international research and cooperation agreements in the field of nuclear energy. These access rights include the right to sub-license (e.g. to third parties involved in such an international agreements) or to give the results for use in public procurement, as long as they are only used for non-commercial and non-competitive purposes. Example: Euratom is part of the ITER agreement and is committed to disseminating information on technological solutions developed in the context of ITER projects, and to sharing them on a non-discriminatory basis with other ITER members and ITER itself. It does this by giving ITER and ITER members royalty-free licences, including the right to sub-license, for the intellectual property produced, so that they can publicly sponsor fusion and research programmes. 6. Specific access rights for third parties If the GA provides for this option, there are specific access rights for third parties, i.e.:  for beneficiaries of complementary grants (depending on the case, royalty-free or under fair and reasonable conditions)  for third parties that need it for (cross-border) interoperability (depending on the case, royalty-free or under fair and reasonable conditions)  for users of a research infrastructure in actions with trans-national or virtual access to research infrastructure under Article 16 (royalty-free). These access rights are limited to the research work of the user under the grant (i.e. what he needs for his research work while he uses the research infrastructure). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 231 SECTION 4 OTHER RIGHTS AND OBLIGATIONS ARTICLE 32 — RECRUITMENT AND WORKING CONDITIONS FOR RESEARCHERS 1. European Charter and Code of Conduct for Researchers The beneficiaries must take all measures to implement the principles set out in the European Charter for Researchers52 and the Code of Conduct for their Recruitment.53 The Charter provides a framework for researchers’ activities and career management, and includes obligations for researchers, employers and funders. The Code of Conduct provides for transparency to the recruitment and selection process, ensuring the equal treatment of all applicants. It includes obligations for employers and funders. Beneficiaries should keep appropriate documentation about the steps taken and measures put in place (see Article 18). The Commission/Agency will verify compliance with this obligation, when monitoring the action implementation and in case of checks, reviews, audits and investigations (see Article 22). 52 Available at http://ec.europa.eu/euraxess/index.cfm/rights/europeanCharter 53 Available at http://ec.europa.eu/euraxess/index.cfm/rights/codeOfConduct This is a best effort obligation: The beneficiaries must be proactive and take specific steps to address conflicts between their policies and practices and the principles set out in the Charter and Code of Conduct. SECTION 4 OTHER RIGHTS AND OBLIGATIONS ARTICLE 32 — RECRUITMENT AND WORKING CONDITIONS FOR RESEARCHERS 32.1 Obligation to take measures to implement the European Charter for Researchers and Code of Conduct for the Recruitment of Researchers The beneficiary must take all measures to implement the principles set out in the Commission Recommendation on the European Charter for Researchers and the Code of Conduct for the Recruitment of Researchers 46 , in particular regarding: - working conditions; - transparent recruitment processes based on merit, and - career development. The beneficiary must ensure that researchers and third parties involved in the action are aware of them. 32.2 Consequences of non-compliance If the beneficiary breaches its obligations under this Article, the [Commission][Agency] may apply any of the measures described in Chapter 6. 46 Commission Recommendation 2005/251/EC of 11 March 2005 on the European Charter for Researchers and on a Code of Conduct for the Recruitment of Researchers (OJ L 75, 22.3.2005, p. 67). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 232 2. Recruitment, working conditions and career development — Rights for the researchers The beneficiaries must in particular implement the General Principles and Requirements of the Charter54 and of the Code of Conduct55 that relate to recruitment, working conditions and career development. List of principles (relating to working conditions):  Recruitment  Transparency  Judging merit  Selection  Variations in the chronological order of CVs  Recognition of mobility experience  Recognition of qualifications  Seniority  Postdoctoral appointments According to these principles, beneficiaries should have a clear policy for recruiting and selecting researchers, which is publicly available and ensures that:  all research vacancies and funding opportunities are publically advertised (e.g. via the EURAXESS Jobs Portal56)  vacancies and funding opportunities are also published in English  vacancy announcements include a clear job description  vacancy announcements include the requirements for the position or the funding opportunity, and the selection criteria;  there is an appropriate time period left between publication and the deadline for applications  there are clear rules for the composition of the selection panels (e.g. number and role of members, inclusion of experts from other (foreign) institutions, gender balance)  adequate feedback is given to applicants  there is a complaint mechanism  the selection criteria adequately value mobility, qualifications and experience, including qualifications and experience obtained in non-standard or informal ways. These principles also apply to selection procedures that do not lead to formal employment relationship (e.g. award of a research fellowship). List of principles (relating to working conditions): 54 Available at http://ec.europa.eu/euraxess/index.cfm/rights/europeanCharter 55 Available at http://ec.europa.eu/euraxess/index.cfm/rights/codeOfConduct 56 Available at http://ec.europa.eu/euraxess/jobs For guidance, see the ‘Human Resources Strategy for Researchers’ tool developed by the Commission. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 233  Research freedom  Accountability  Non-discrimination  Working conditions  Research environment  Funding and salaries (in particular, adequate social security)  Stability and permanence of employment  Gender balance  Intellectual Property Rights  Complaints/appeals and  Participation in decision-making bodies. List of principles (relating to career development):  Career development  Access to research training and continuous development (independently of the researcher’s status)  Value of mobility  Access to career advice  Supervision  Evaluation/appraisal systems. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 234 ARTICLE 33 — GENDER EQUALITY 1. Gender equality — Equal opportunities The beneficiaries must aim — to the extent possible — for a gender balance at all levels of personnel assigned to the action, including at the supervisory and managerial levels. Examples (measures to promote equal opportunities): transparency of recruitment and advancement processes, including gender-sensitive language in vacancies and job-descriptions; plans and conditions for career advancement; transparent wage classification and grading of jobs; development of leadership opportunities; gender planning and budgeting; gender impact assessment of new policies; climate surveys of institutions; adoption of family-friendly policies; promotion of mobility and dual-career couples. Beneficiaries should keep appropriate documentation about the steps taken and measures put in place (see Article 18). If a beneficiary cannot achieve the balanced participation of women and men in its team despite active recruitment efforts, the reasons should moreover be explained in the first periodic technical report and in the final report (see Articles 20.3 and 20.4). The Commission/Agency will verify compliance with this obligation, when monitoring the action implementation and in case of checks, reviews, audits and investigations (see Article 22). This is a best effort obligation: The beneficiaries must:  aim for the balanced participation of women and men in their research teams  be proactive in ensuring gender balance among the individuals who are primarily responsible for carrying out the work (in accordance with the categories defined in the monitoring system). ARTICLE 33 — GENDER EQUALITY 33.1 Obligation to aim for gender equality The beneficiaries must take all measures to promote equal opportunities between men and women in the implementation of the action. They must aim, to the extent possible, for a gender balance at all levels of personnel assigned to the action, including at supervisory and managerial level. 33.2 Consequences of non-compliance If a beneficiary breaches its obligations under this Article, the [Commission][Agency] may apply any of the measures described in Chapter 6. For more information on gender in research, see the Online Manual. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 235 ARTICLE 34 — ETHICS ARTICLE 34 — ETHICS 34.1 Obligation to comply with ethical principles The beneficiaries must carry out the action in compliance with: (a) ethical principles (including the highest standards of research integrity — as set out, for instance, in the European Code of Conduct for Research Integrity 47 — and including, in particular, avoiding fabrication, falsification, plagiarism or other research misconduct) and (b) applicable international, EU and national law. Funding will not be granted for activities carried out outside the EU if they are prohibited in all Member States. The beneficiaries must ensure that the activities under the action have an exclusive focus on civil applications. The beneficiaries must ensure that the activities under the action do not: (a) aim at human cloning for reproductive purposes; (b) intend to modify the genetic heritage of human beings which could make such changes heritable (with the exception of research relating to cancer treatment of the gonads, which may be financed), or (c) intend to create human embryos solely for the purpose of research or for the purpose of stem cell procurement, including by means of somatic cell nuclear transfer. 34.2 Activities raising ethical issues Activities raising ethical issues must comply with the ‘ethics requirements’ set out in Annex 1. Before the beginning of an activity raising an ethical issue, the coordinator must submit (see Article 52) to the [Commission][Agency] copy of: (a) any ethics committee opinion required under national law and (b) any notification or authorisation for activities raising ethical issues required under national law. If these documents are not in English, the coordinator must also submit an English summary of the submitted opinions, notifications and authorisations (containing, if available, the conclusions of the committee or authority concerned). If these documents are specifically requested for the action, the request must contain an explicit reference to the action title. The coordinator must submit a declaration by each beneficiary concerned that all the submitted documents cover the action tasks. 34.3 Activities involving human embryos or human embryonic stem cells Activities involving research on human embryos or human embryonic stem cells may be carried out only if: - they are set out in Annex 1 or - the coordinator has obtained explicit approval (in writing) from the [Commission][Agency] (see Article 52). - H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 236 1. Ethical principles The beneficiaries must carry out the action:  in compliance with ethical principles and  respecting applicable international, EU and national law. Main ethical principles:  Respecting human dignity and integrity  Ensuring honesty and transparency towards research subjects and notably getting free and informed consent (as well as assent whenever relevant)  Protecting vulnerable persons  Ensuring privacy and confidentiality  Promoting justice and inclusiveness  Minimising harm and maximising benefit  Sharing the benefits with disadvantaged populations, especially if the research is being carried out in developing countries  Maximising animal welfare, in particular by ensuring replacement, reduction and refinement (‘3Rs’) in animal research  Respecting and protecting the environment and future generations  Following the highest standards of research integrity (i.e. avoiding any kind of fabrication, falsification, plagiarism, unjustified double funding or other type of research misconduct; see also the European Code of Conduct for Research Integrity57). The key sources of EU and international law are the Charter of Fundamental Rights of the European Union and the European Convention on Human Rights (ECHR) and its Supplementary Protocols (for other texts, see the Science in Society e-library58). Other important sources include the UN Convention on the Rights of Persons with Disabilities (UN CRPD). Compliance to the ethical principles and legislation is ensured by the Commission’s ‘H2020 ethics appraisal scheme’ (i.e. the European Commission’s general approach on ethics issues in research), which includes all of the following: 57 Available at http://www.esf.org/fileadmin/Public_documents/Publications/Code_Conduct_ResearchIntegrity.pdf 58 Available at http://ec.europa.eu/research/science-society/index.cfm?fuseaction=public.topic&id=1407 34.4 Consequences of non-compliance If a beneficiary breaches any of its obligations under this Article, the grant may be reduced (see Article 43) and the Agreement or participation of the beneficiary may be terminated (see Article 50). Such breaches may also lead to any of the other measures described in Chapter 6. 47 The European Code of Conduct for Research Integrity of ALLEA (All European Academies) and ESF (European Science Foundation) of March 2011. http://www.esf.org/fileadmin/Public_documents/Publications/Code_Conduct_ResearchIntegrity.pdf H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 237  ‘ethics self-assessment’ (by the applicants, in their proposal; see the proposal templates and the Guidance — How to complete your ethics self-assessment)  two-stage ‘ethics review’, with an ethics screening and, if necessary, an ‘ethics assessment’ (by the Commission/Agency, during the selection procedure)  if necessary, ethics checks, reviews and audits (during the implementation of the action and up to two years afterwards; see Article 22). 2. Activities carried out outside the EU For activities carried out outside the EU, it is not sufficient that the activity is accepted and complies with the legal obligations of a third country; the activities must ALSO be allowed in at least one Member State. The beneficiaries must confirm in the ‘ethics self-assessment’ section of their proposal that this condition is met. 3. Exclusive focus on civil applications Activities under the action must have an exclusive focus on civil applications. This does not mean that peripherally, the research results cannot be useful in a military context. Research related to dual-use products or technologies (usually used for civilian purposes but with possible military applications) is not banned. However, activities focusing on military applications will not be funded. 4. Activities raising ethical issues If the ethics review (carried out by the Commission/Agency during the selection procedure) identifies an ethics issue, the Commission/Agency will define ‘ethics requirements’ and include them in Annex 1 of the GA (in addition to requirements that the consortium must already fulfil before the GA is signed). Examples (ethics issues): involvement of patients, volunteers, children or vulnerable populations; use of human (embryonic) stem cells; implication of developing countries; collecting and processing of personal data; use of animals; risk of environmental impact; risk of malevolent use or misuse of research results. In this case, the beneficiaries must comply with the ethics requirements. Examples (ethics requirements): the obligation to appoint a data protection officer, an independent ethics advisor or ethics advisory board. Moreover, the coordinator must — before the activity starts — submit copies of the following,:  any opinion(s) issued by an ethics committee; and  any notification(s) or authorisation(s) for activities that raise ethical issues (e.g. to ethics committees, data protection authorities, dual-use authorities, etc.). Best practice: When preparing the documents, beneficiaries should request the assistance of ethics experts, research ethics departments/committees and of their organisation’s data protection officer (DPO). For more information on ethics in research, see the Online Manual. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 238 For new opinions, authorisations or notifications: the beneficiaries must include the EU action’s title in their requests. For existing opinions, authorisations or notifications: the beneficiaries must confirm that all the documents submitted cover all the tasks to be undertaken in the context of the action. If the documents are not in English, the coordinator must submit an English summary that allows the efficient and timely review of the proposal. This summary should contain the conclusions, recommendations and, if applicable, the conditions imposed. It is expected that the translation will be made by the beneficiaries. If, exceptionally, there should be translation costs, they will be considered eligible (see Article 6.2.D.3) — at the rate of non-official translations. There is NO need to submit copies of requests for opinions or authorisations; the Commission/Agency only needs a copy of the opinion or authorisation. The Commission/Agency may carry out ethics checks, reviews or audits, to ensure that the beneficiaries have properly implemented the ethics requirements (see Article 22). 5. Activities involving human embryos or human embryonic stem cells Activities that involve human embryos or human embryonic stem cells can only be funded, if:  they comply with the terms outlined in the Statement of the Commission related to research activities involving human embryonic stem cells59 and  they are set out in Annex 1 or the coordinator has obtained explicit approval by the Commission/Agency. If they are retained for funding, these activities will be considered as ‘activities raising ethical issues’ (and must comply with the rules above, including ‘ethics requirements’ that will be set out in Annex 1; see point 4). 59 Available at http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2013:373:0012:0015:EN:PDF H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 239 ARTICLE 35 — CONFLICT OF INTERESTS 1. Conflicts of interests The beneficiaries (and linked third parties) must ensure that the action is implemented impartially and objectively, as described in the GA. They must do their best to avoid conflicts of interest. A ‘conflict of interests’ exists if shared interests:  influenced the contract’s/subcontract’s selection/award procedure  influenced the contract’s/subcontract’s price and this does not correspond to the market price or  affected the action’s performance, as measured by the appropriate quality standards. These interests may be:  economic interests (e.g. unjustified and preferential contracts or subcontracts with connected companies (not based on best value for money, technical merit, etc.)) Examples: A beneficiary subcontracts work to another legal entity at above the market prices because it is a shareholder or has economic interests in this other legal entity. A university subcontracts work to a consultancy firm owned by a professor carrying out part of the work for the project in which the university participates. A university gives a preferential subcontract to its spin-off company: the contract is not based on the best value for money principle (i.e. the price is higher than the general market price for the same type of service).  political or national affinity (e.g. beneficiaries or third parties are chosen, or research-related decisions are adopted, based on political considerations, connections or national affinity) Example: The choice of an action’s demonstration site is based on national affinities, not on the site’s merits. ARTICLE 35 — CONFLICT OF INTERESTS 35.1 Obligation to avoid a conflict of interests The beneficiaries must take all measures to prevent any situation where the impartial and objective implementation of the action is compromised for reasons involving economic interest, political or national affinity, family or emotional ties or any other shared interest (‘conflict of interests’). They must formally notify to the [Commission][Agency] without delay any situation constituting or likely to lead to a conflict of interests and immediately take all the necessary steps to rectify this situation. The [Commission][Agency] may verify that the measures taken are appropriate and may require additional measures to be taken by a specified deadline. 35.2 Consequences of non-compliance If a beneficiary breaches any of its obligations under this Article, the grant may be reduced (see Article 43) and the Agreement or participation of the beneficiary may be terminated (see Article 50). Such breaches may also lead to any of the other measures described in Chapter 6. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 240  family or emotional ties (e.g. contracts or subcontracts made with family members for their benefit) Example: A husband works for a beneficiary who subcontracts work to an SME owned by his wife.  other shared interests. Examples: If a beneficiary or third party participates in the action not because of its technical capacity and objective merits, but because it has a close relationship with someone else working for the action, and this affects the action’s implementation. If decisions made in the context of the action are taken not according to objective and impartial criteria, but because of these shared interests. If entities with close ties create a professional relationship with the intention of being part of the action in order to satisfy other interests, and as a result, the quality of the implementation is (or is likely to be) compromised. If there is a (risk of) a conflict of interests, the beneficiary must inform the Commission/Agency (via the electronic exchange system, see Article 52), so that steps can be taken to resolve or avoid it. This may result in the Commission/Agency putting in place certain measures. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 241 ARTICLE 36 — CONFIDENTIALITY ARTICLE 36 — CONFIDENTIALITY 36.1 General obligation to maintain confidentiality During implementation of the action and for four years after the period set out in Article 3, the parties must keep confidential any data, documents or other material (in any form) that is identified as confidential at the time it is disclosed (‘confidential information’). If a beneficiary requests, the [Commission][Agency] may agree to keep such information confidential for an additional period beyond the initial four years. If information has been identified as confidential only orally, it will be considered to be confidential only if this is confirmed in writing within 15 days of the oral disclosure. Unless otherwise agreed between the parties, they may use confidential information only to implement the Agreement. The beneficiaries may disclose confidential information to their personnel or third parties involved in the action only if they: (a) need to know to implement the Agreement and (b) are bound by an obligation of confidentiality. This does not change the security obligations in Article 37, which still apply. The [Commission][Agency] may disclose confidential information to its staff, other EU institutions and bodies or third parties, if: (a) this is necessary to implement the Agreement or safeguard the EU’s financial interests and (b) the recipients of the information are bound by an obligation of confidentiality. Under the conditions set out in Article 4 of the Rules for Participation Regulation No 1290/2013 48 , the Commission must moreover make available information on the results to other EU institutions, bodies, offices or agencies as well as Member States or associated countries. The confidentiality obligations no longer apply if: (a) the disclosing party agrees to release the other party; (b) the information was already known by the recipient or is given to him without obligation of confidentiality by a third party that was not bound by any obligation of confidentiality; (c) the recipient proves that the information was developed without the use of confidential information; (d) the information becomes generally and publicly available, without breaching any confidentiality obligation, or (e) the disclosure of the information is required by EU or national law. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 242 1. Confidentiality The beneficiaries (and also the Commission/Agency) must — during the action and for four years afterwards — keep confidential any data, documents or other material (in any form) that is identified as confidential at the time it is disclosed. Best practice: Beneficiaries should inform each other (and the Commission/Agency) about any laws that require disclosing confidential information (and to work together to minimise any negative effects). A beneficiary may ask the Commission/Agency to extend the period. This request must explain why and clearly identify the confidential information. Stricter confidentiality obligations apply for information that is ‘EU-classified’ or subject to a ‘security recommendation’ in Annex 1 of the GA (see Article 37). The Commission/Agency will exchange confidential information with the European Court of Auditors (ECA), the European Anti-Fraud Office (OLAF) and other Agencies and H2020 funding bodies, to check double funding, pursue fraud and avoid plagiarism. (This is part of safeguarding the EU’s financial interests). This is a minimum obligation: Beneficiaries may extend the period and agree to additional confidentiality-related obligations among themselves (for example, for access rights or third parties involved in the action). 36.2 Consequences of non-compliance If a beneficiary breaches any of its obligations under this Article, the grant may be reduced (see Article 43). Such breaches may also lead to any of the other measures described in Chapter 6. 48 Regulation (EU) No 1290/2013 of the European Parliament and of the Council of 11 of December 2013 laying down the rules for the participation and dissemination in "Horizon 2020 – the Framework Programme for Research and Innovation (2014-2020)" (OJ L 347, 20.12.2013, p.81). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 243 ARTICLE 37 — SECURITY-RELATED OBLIGATIONS 1. Results with a security recommendation — Classified results If the GA provides for (one of these) options, the beneficiaries must comply with the specific security-related obligations set out in this Article, in Annex 1 (via a ‘Security Aspect Letter (SAL)’ and ‘Security Classification Guide (SCG)’) and in the other provisions of the GA (see Articles 13 and 19). ARTICLE 37 — SECURITY-RELATED OBLIGATIONS 37.1 Results with a security recommendation [OPTION if applicable to the grant: ‘Results with a security recommendation’ (see Annex 1) may be disclosed or disseminated only under the conditions set out in Annex 1. Before disclosing such results to a third party (including linked third parties, such as affiliated entities), a beneficiary must inform the coordinator — which must request written approval from the [Commission][Agency].] [OPTION: Not applicable] 37.2 Classified results [OPTION if applicable to the grant: Activities related to ‘classified results’ (see Annex 1) must comply with the ‘security requirements’ (Security Aspect Letter (SAL) and the Security Classification Guide (SCG)) set out in Annex 1 until they are declassified. Action tasks related to classified results may not be subcontracted without prior explicit written approval from the [Commission][Agency]. The beneficiaries must inform the coordinator — which must immediately inform the [Commission][Agency] — of any changes in the security context and — if necessary —request for Annex 1 to be amended (see Article 55).] [OPTION: Not applicable] 37.3 Activities involving dual-use goods or dangerous materials and substances [OPTION: Activities involving dual-use goods or dangerous materials and substances must comply with applicable EU, national and international law. Before the beginning of the activity, the coordinator must submit to the [Commission][Agency] (see Article 52) a copy of any export or transfer licences required under EU, national or international law.] [OPTION: Not applicable] 37.4 Consequences of non-compliance [OPTION to be used if 37.1, 37.2 and/or 37.3 are applicable: If a beneficiary breaches any of its obligations under this Article, the grant may be reduced (see Article 43). Such breaches may also lead to any of the other measures described in Chapter 6.] [OPTION: Not applicable] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 244 The options will be inserted if the Commission/Agency finds during the selection procedure (‘security scrutiny’) that the action raises security issues and must be subject to a security recommendation and/or security classification of information under Commission Decision No 2015/54460. 2. Activities involving dual-use goods Beneficiaries that carry out activities involving dual-use goods must comply with applicable EU, national and international law, and in particular Regulation No 428/200961. Moreover, the coordinator must — before the action starts — submit a copy of:  any export or transfer licence. 60 Commission Decision 2015/444/EC,Euratom of 13 March 2015 on the security rules for protecting EU classified information (OJ L 72, 17.3.2015, p.53). 61 Council Regulation (EC) No 428/2009 of 5 May 2009 setting up a Community regime for the control of exports, transfer, brokering and transit of dual-use items (OJ L 134, 29.5.2009, p. 1). For more information on dual use goods, see the Guidance — How to complete your ethics self-assessment and the Guidance note — Research involving dual use items. For more information, see the Guidance — How to complete your ethics self-assessment, the Guidance note — Research focusing exclusively on civil applications and the Guidance note — Potential misuse of research results. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 245 ARTICLE 38 — PROMOTING THE ACTION — VISIBILITY OF EU FUNDING ARTICLE 38 — PROMOTING THE ACTION – VISIBILITY OF EU FUNDING 38.1 Communication activities by beneficiaries 38.1.1 Obligation to promote the action and its results The beneficiaries must promote the action and its results, by providing targeted information to multiple audiences (including the media and the public) in a strategic and effective manner. This does not change the dissemination obligations in Article 29, the confidentiality obligations in Article 36 or the security obligations in Article 37, all of which still apply. Before engaging in a communication activity expected to have a major media impact, the beneficiaries must inform the [Commission][Agency] (see Article 52). 38.1.2 Information on EU funding — Obligation and right to use the EU emblem Unless the [Commission][Agency] requests or agrees otherwise or unless it is impossible, any communication activity related to the action (including in electronic form, via social media, etc.) and any infrastructure, equipment and major results funded by the grant must: (a) display the EU emblem and (b) include the following text: For communication activities: “This project has received funding from the [European Union’s Horizon 2020 research and innovation programme][Euratom research and training programme 2014-2018] under grant agreement No [number].” For infrastructure, equipment and major results: “This [infrastructure][equipment][insert type of result] is part of a project that has received funding from the [European Union’s Horizon 2020 research and innovation programme][Euratom research and training programme 2014-2018] under grant agreement No [number].” When displayed together with another logo, the EU emblem must have appropriate prominence. For the purposes of their obligations under this Article, the beneficiaries may use the EU emblem without first obtaining approval from the [Commission][Agency]. This does not, however, give them the right to exclusive use. Moreover, they may not appropriate the EU emblem or any similar trademark or logo, either by registration or by any other means. 38.1.3 Disclaimer excluding [Commission][Agency] responsibility Any communication activity related to the action must indicate that it reflects only the author’s view and that the [Commission][Agency] is not responsible for any use that may be made of the information it contains. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 246 1. Communication activities (by the beneficiaries) — Promoting the action and its results The beneficiaries must promote the action and its result, with a comprehensive communication plan that defines clear objectives (adapted to various relevant target audiences) and sets out a concrete planning for the communication activities (including a description and timing for each activity — throughout the action duration). ‘Promoting the action’ means providing targeted information to multiple audiences (including the media and the public), in a strategic and effective manner and possibly engaging in a two- way exchange The beneficiaries are free to choose the type of communication activities62. Examples: a press release for the general public at the start of the action; an interview in the local radio station after a major achievement of the action; an event in a shopping mall that shows how the outcomes of the action are relevant to our everyday lives; organising local workshops about the action, targeted at audiences for which the action is of interest; producing a brochure to explain the action’s work to school or university students to show how interesting this specific research topic can be. The activities must however:  be effective (i.e. suited to achieving the action’s communication goals)  be proportionate to the scale of the action (e.g. activities carried out by a large- scale action with beneficiaries coming from several different countries and a large budget must be more ambitious than those of a sole participant of a mono- beneficiary grant)  address audiences that go beyond the action’s own community (including the media and the public). Ad hoc efforts or mere dissemination of results are NOT sufficient. (Dissemination of results (see Article 29) cannot replace communication activities (or vice-versa); both provisions must be complied with.) Moreover, the activities must make the research activities known to multiple audiences (in a way that they can be understood by non-specialists) and include the public policy perspective of EU research and innovation funding, by addressing aspects such as:  transnational cooperation in a European consortium (i.e. how working together has allowed to achieve more than otherwise possible)  scientific excellence  contributing to competitiveness and to solving societal challenges  impact on everyday lives (e.g. creation of jobs, development of new technologies, better quality products, more convenience, improved life-style, etc.)  better use of results and spill-over to policy-makers, industry and the scientific community. Any communication activity that is expected to have a ‘major media impact’ (i.e. media coverage (online and printed press, broadcast media, social media, etc.) that will go beyond having a local impact and which could have the potential for national and international outreach) must be first notified to the Commission/Agency. Information given may NOT include classified (or otherwise restricted) results (see Article 37). 62 For the definition of ‘communication activities’, see the Glossary. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 247 The communication activities during the action must already be part of the proposal (either as a specific work package for communication or by including them in another work package; see the proposal templates) and be included in Annex 1 and 2. 2. Visibility of EU funding The beneficiaries must — during the action and afterwards — ensure the visibility of EU funding for any communication activity related to the action (including in electronic form, via social media, etc.) and on any infrastructure, equipment or major result (including prototypes) funded by the grant, by:  displaying the EU emblem AND  including the reference to EU funding set out in the GA. Best practice: Where possible, beneficiaries should make this reference in the language of the communication activity (or, for infrastructure, equipment or major results, the official language(s) of the country where they are located). Where relevant, beneficiaries should use the wording from the corresponding translation of the MGA that is available on the Participant Portal Reference documents page). The EU emblem and reference to EU funding must be displayed in a way that is easily visible for the public and with sufficient prominence (taking also into account the nature of the activity or object). Examples: a sticker or poster for equipment and major results, a plaque or billboard for infrastructure. For more information on promoting the action, see the Online Manual.  For guidance on using the EU emblem, see the Guide to using the EU emblem.  H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 248 38.2 Communication activities by the [Commission][Agency] 38.2.1 Right to use beneficiaries’ materials, documents or information The [Commission][Agency] may use, for its communication and publicising activities, information relating to the action, documents notably summaries for publication and public deliverables as well as any other material, such as pictures or audio-visual material that it receives from any beneficiary (including in electronic form). This does not change the confidentiality obligations in Article 36 and the security obligations in Article 37, all of which still apply. However, if the [Commission’s][Agency’s] use of these materials, documents or information would risk compromising legitimate interests, the beneficiary concerned may request the [Commission][Agency] not to use it (see Article 52). The right to use a beneficiary’s materials, documents and information includes: (a) use for its own purposes (in particular, making them available to persons working for the [Commission][Agency] or any other EU institution, body, office or agency or body or institutions in EU Member States; and copying or reproducing them in whole or in part, in unlimited numbers); (b) distribution to the public (in particular, publication as hard copies and in electronic or digital format, publication on the internet, as a downloadable or non-downloadable file, broadcasting by any channel, public display or presentation, communicating through press information services, or inclusion in widely accessible databases or indexes); (c) editing or redrafting for communication and publicising activities (including shortening, summarising, inserting other elements (such as meta-data, legends, other graphic, visual, audio or text elements), extracting parts (e.g. audio or video files), dividing into parts, use in a compilation); (d) translation; (e) giving access in response to individual requests under Regulation No 1049/200149, without the right to reproduce or exploit; (f) storage in paper, electronic or other form; (g) archiving, in line with applicable document-management rules, and (h) the right to authorise third parties to act on its behalf or sub-license the modes of use set out in Points (b), (c), (d) and (f) to third parties if needed for the communication and publicising activities of the [Commission][Agency]. If the right of use is subject to rights of a third party (including personnel of the beneficiary), the beneficiary must ensure that it complies with its obligations under this Agreement (in particular, by obtaining the necessary approval from the third parties concerned). Where applicable (and if provided by the beneficiaries), the [Commission][Agency] will insert the following information: ‘© — [year] — [name of the copyright owner]. All rights reserved. Licensed to the [European Union (EU)][Euratom][insert the name of the Agency] under conditions.’ H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 249 1. Communication activities (by the Commission/Agency) The Commission/Agency may use (free of charge) any (non-confidential and non-classified) information, documents and materials received from the beneficiaries, for its own communication and publicising activities. Examples (material): summaries for publication (submitted as part of the reports), public deliverables and any other material, such as pictures or audio-visual material, provided by beneficiaries Examples (communication activities): using a picture or the publishable summary included in the final report submitted by the action to write a story about a particularly successful action for a Commission publication (e.g. Horizon - The EU Research & Innovation Magazine), or for speeches, etc. Examples (publicising activities): providing on an Commission/Agency website general information about the action such as its name, a project summary, the participating partners, the EU funding, etc. If the use would risk compromising legitimate interests, the beneficiary may request that the material is not used. This request must explain why and include the information, documents or material concerned. If the Commission/Agency needs to edit or redraft the material, it will be careful not to distort any content. Beneficiaries may ask the Commission/Agency to include a copyright notice (e.g. by including such a notice in the material). The beneficiaries must ensure that the Commission/Agency can use the documents or materials by making arrangements with any third parties that could claim rights to them. 38.3 Consequences of non-compliance If a beneficiary breaches any of its obligations under this Article, the grant may be reduced (see Article 43). 49 Regulation (EC) No 1049/2001 of the European Parliament and of the Council of 30 May 2001 regarding public access to European Parliament, Council and Commission documents, OJ L 145, 31.5.2001, p. 43. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 250 ARTICLE 39 — PROCESSING OF PERSONAL DATA 1. Processing of personal data (by the Commission/Agency) The Commission/Agency will process personal data in compliance with Regulation No 45/2001 and as set out in its privacy statements on the Participant Portal. Personal data will be processed only for the purpose of implementing, managing and monitoring the GA or protecting EU/Euratom financial interests (including controls on eligible costs, proper implementation of the action and compliance with other obligations). The level of detail of the data requested will be determined case-by-case and will be limited to what is necessary (for implementing, managing, monitoring and controlling the GA or protecting the financial interests). The processing of personal data under the GA (manual or electronic) will be first notified (by the data controller) to the Commission/Agency Data Protection Officer (DPO). The notifications are available via the Register of the DPO63 (and describe the processing operations, legal basis, security safeguards, retention period, possible data transfer, etc.). In addition, for processing that implies specific risks to the rights and freedoms of the data subjects (e.g. processing of data relating to health), the European Data Protection Supervisor (EDPS) will be consulted. 63 Available at http://ec.europa.eu/dpo-register/search.htm. ARTICLE 39 — PROCESSING OF PERSONAL DATA 39.1 Processing of personal data by the [Agency and the] Commission Any personal data under the Agreement will be processed by the [Agency or the] Commission under Regulation No 45/2001 50 and according to the ‘notifications of the processing operations’ to the Data Protection Officer (DPO) of the [Agency or the] Commission (publicly accessible in the DPO register). Such data will be processed by the ‘data controller’ of the [Agency or the] Commission for the purposes of implementing, managing and monitoring the Agreement or protecting the financial interests of the EU or Euratom (including checks, reviews, audits and investigations; see Article 22). The persons whose personal data are processed have the right to access and correct their own personal data. For this purpose, they must send any queries about the processing of their personal data to the data controller, via the contact point indicated in the ‘service specific privacy statements (SSPS)’ that are published on the [Agency and] Commission websites. They also have the right to have recourse at any time to the European Data Protection Supervisor (EDPS). 50 Regulation (EC) No 45/2001 of the European Parliament and of 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 (OJ L 8, 12.01.2001, p. 1). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 251 2. Right to access and correct personal data Persons whose data is being processed (‘data subjects’) can contact the data controller or the DPO (via the contact information in the SSPS), to:  correct errors in the data, block access or delete their data  complain about the data collection and use, and claim compensation for any damage. 3. Complaints to the EDPS Persons whose data is being processed by the Commission/Agency can lodge a complaint with the European Data Protection Supervisor (EDPS) (i.e. the independent supervisory authority for data processing by EU institutions). Best practice: The beneficiaries should first contact the data controller (via the contact information in the privacy statement), since s/he might be able to solve the problem quickly. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 252 1. Processing of personal data (by the beneficiaries) The beneficiaries must process personal data under the GA in accordance with EU and national law on data protection (in particular, Directive 95/46/EC64 — or any EU legislation that replaces this Directive — and the corresponding national law). ‘Personal data’ means any information, private or professional, which relates to an identified or identifiable natural person (for the full definition, see Article 2(a) of Directive 95/46/EC). Examples (personal data): name, address, identification number, e-mail, CV, bank account number, phone number, medical records. There are various potential identifiers, including full name, pseudonyms, occupation, address or any combination of these. Individuals are considered NOT ‘identifiable’, if identifying them requires excessive effort. Certain categories of data are more ‘sensitive’ than others, and these may only be processed according to specific rules. 65 Examples (sensitive data): racial or ethnic origin, political opinions, religious or philosophical beliefs, trade-union membership, health, sexual orientation, etc. ‘Processing of personal data’ means any operation (or set of operations) which is performed on personal data, either manually or by automatic means. This includes:  collection  recording  organisation and storage  adaptation or alteration  retrieval and consultation  use 64 Directive 95/46/EC on the protection of individuals with regard to the processing of personal data and on the free movement of such data (OJ L 281, 23.11.1995, p. 31). 65 See Article 8 of Directive 95/46/EC. 39.2 Processing of personal data by the beneficiaries The beneficiaries must process personal data under the Agreement in compliance with applicable EU and national law on data protection (including authorisations or notification requirements). The beneficiaries may grant their personnel access only to data that is strictly necessary for implementing, managing and monitoring the Agreement. The beneficiaries must inform the personnel whose personal data are collected and processed by the [Agency or the] Commission]. For this purpose, they must provide them with the service specific privacy statements (SSPS) (see above), before transmitting their data to the [Agency or the]Commission. 39.3 Consequences of non-compliance If a beneficiary breaches any of its obligations under Article 39.2, the [Commission][Agency] may apply any of the measures described in Chapter 6. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 253  disclosure by transmission, dissemination or otherwise making available  alignment or combination  blocking, deleting or destruction. Examples (processing of personal data): creating a mailing list or a list of participants; managing a database; accounting records on personnel costs; time-sheets; project planning with names. Under these laws, personal data must be processed according to certain principles and conditions that aim to ensure data quality and confidentiality.66 The beneficiaries must give their staff access to the personal data ONLY on a need to know basis, for carrying out their functions under the GA. This means that the beneficiaries must put in place adequate access controls and retention policies for the various categories of data they hold. The beneficiaries must inform their staff (whose personal data are collected and processed by the Commission/Agency) about the disclosure of their data to the Commission/Agency (by providing them with the SSPS). Examples: Before encoding its staff’s personal data in the Beneficiary Register or into a proposal, the beneficiary must provide the staff concerned with the SSPS. If in an ex-post audit, the Commission requests the names, CVs, time-sheets and salaries of the beneficiary’s staff (to check the eligibility of personnel costs), the beneficiary must inform the staff concerned and provide them with the relevant SSPS. Processing of personal data is also part of the ethics obligations (see Article 34). Both provisions must be complied with. 66 See Articles 6, 16, 17 of Directive 95/46/EC. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 254 ARTICLE 40 — ASSIGNMENTS OF CLAIMS FOR PAYMENT AGAINST THE [COMMISSION][AGENCY] 1. Assignment of claims for payment What? The beneficiaries may assign (i.e. transfer, sell or give) claims for payment (for work carried out under the action) to a third party, if the Commission/Agency has explicitly agreed in writing. Only actual (i.e. existing) claims for payment may be assigned (including pre-financing). Assignment is NOT possible for future claims. How? Assignment of payment claims must be requested. The request for approval must come from the coordinator, on behalf of the beneficiary concerned. It must be in writing and must explain the reasons for the assignment. The Commission/Agency will assess the reasons given and approve or reject the request in writing. Examples (reasonable requests for assignment): Assignment of a claim for payment for work carried out by a research laboratory sold after the end of the action (but before payment of the balance) by a beneficiary to another legal entity. Assignment for the benefit of creditors in a bankruptcy procedure. If the assignment is linked to bankruptcy, the approval will be subject to compliance with national law. Assignments of rights under this Article are limited to claims for payment under Article 21. Transfers of other rights or obligations (e.g. replacement of a beneficiary by the entity that bought it) are governed by other provisions (e.g. amendments; see Article 55). Assignment has NO effect on the beneficiary’s obligations under the GA; it remains fully bound by them. . ARTICLE 40 — ASSIGNMENTS OF CLAIMS FOR PAYMENT AGAINST THE [COMMISSION] [AGENCY] The beneficiaries may not assign any of their claims for payment against the [Commission][Agency] to any third party, except if approved by the [Commission][Agency] on the basis of a reasoned, written request by the coordinator (on behalf of the beneficiary concerned). If the [Commission][Agency] has not accepted the assignment or the terms of it are not observed, the assignment will have no effect on it. In no circumstances will an assignment release the beneficiaries from their obligations towards the [Commission][Agency]. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 255 CHAPTER 5 DIVISION OF BENEFICIARIES’ ROLES AND RESPONSIBILITIES — RELATIONSHIP WITH COMPLEMENTARY BENEFICIARIES — RELATIONSHIP WITH PARTNERS OF A JOINT ACTION ARTICLE 41 — DIVISION OF BENEFICIARIES’ ROLES AND RESPONSIBILITIES — RELATIONSHIP WITH COMPLEMENTARY BENEFICIARIES — RELATIONSHIP WITH PARTNERS OF A JOINT ACTION CHAPTER 5 DIVISION OF BENEFICIARIES’ ROLES AND RESPONSIBILITIES [— RELATIONSHIP WITH COMPLEMENTARY BENEFICIARIES] [— RELATIONSHIP WITH PARTNERS OF A JOINT ACTION] MULTI-BENEFICIARY: ARTICLE 41 — DIVISION OF BENEFICIARIES’ ROLES AND RESPONSIBILITIES [— RELATIONSHIP WITH COMPLEMENTARY BENEFICIARIES] [— RELATIONSHIP WITH PARTNERS OF A JOINT ACTION] 41.1 Roles and responsibilities towards the [Commission][Agency] The beneficiaries have full responsibility for implementing the action and complying with the Agreement. The beneficiaries are jointly and severally liable for the technical implementation of the action as described in Annex 1. If a beneficiary fails to implement its part of the action, the other beneficiaries become responsible for implementing this part (without being entitled to any additional EU funding for doing so), unless the [Commission][Agency] expressly relieves them of this obligation. The financial responsibility of each beneficiary is governed by Articles 44, 45 and 46. MONO-BENEFICIARY: ARTICLE 41 — DIVISION OF THE BENEFICIARY’S ROLES AND RESPONSIBILITIES — RELATIONSHIP WITH COMPLEMENTARY BENEFICIARIES — RELATIONSHIP WITH PARTNERS OF A JOINT ACTION 41.1 Role and responsibility towards the [Commission][Agency] The beneficiary has full responsibility for implementing the action and complying with the Agreement. The beneficiary is itself responsible for: (a) monitoring that the action is implemented properly (see Article 7); (b) informing the [Commission][Agency] immediately of any events or circumstances likely to affect significantly or delay the implementation of the action (see Article 17); (c) submitting the deliverables and reports to the [Commission][Agency] (see Articles 19 and 20); (d) submitting to the [Commission][Agency] in good time any documents or information required by it and may not subcontract these tasks to any third party. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 256 1. Division of roles and responsibilities — Responsibilities towards the Commission/Agency The beneficiaries have full responsibility for implementing the action (see Article 7) and for complying with the GA. This means that:  each beneficiary must ensure that it complies with its obligations under the GA  each beneficiary must ensure swift and proper implementation of the action (i.e. that there are no delays which can be attributed to it)  each beneficiary is responsible (towards the Commission/Agency) for the tasks performed by its subcontractors and linked third parties  the Commission/Agency is not responsible for the implementation of the action and has no responsibility for the way in which the action is conducted (or any adverse consequences). The beneficiaries are jointly and severally liable for the technical implementation of the action. This means that the beneficiaries — including any new beneficiary introduced through an amendment — accept that they are together responsible for fully implementing the whole action — even if one of them withdraws. If one of them withdraws, the remaining members of the consortium must carry out the action as set out in the GA — including the part that the defaulting beneficiary was supposed to carry out — unless, for specific reasons, the Commission/Agency expressly renounces it. They will have to do this without any additional EU contribution (even if — in case of termination — the Guarantee Fund may provide additional funds to compensate the debt of a withdrawing beneficiary not paid back to the remaining members of the consortium). Example: Legal entities A, B and C are members of a consortium that signed a GA with the Commission in order to carry out a research action. One year later, beneficiary C goes bankrupt. Beneficiaries A and B (or even only A or B) must carry out the entire action as described in Annex 1. The remaining beneficiaries may later take legal action against the defaulting beneficiary, in order to obtain compensation. Moreover, the GA will have to be amended, in order to redistribute the tasks, terminate the beneficiary’s participation, and/or add a new beneficiary (see Article 50). In case of recovery, each beneficiary’s financial responsibility is in principle limited to its own debt and undue amounts paid for costs declared by its linked third parties. It is only for the 5% retained from the pre-financing for the Guarantee Fund that financial responsibility is shared; see Article 21.4). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 257 MULTI-BENEFICIARY: 41.2 Internal division of roles and responsibilities The internal roles and responsibilities of the beneficiaries are divided as follows: (a) Each beneficiary must: (i) keep information stored in the Beneficiary Register (via the electronic exchange system) up to date (see Article 17); (ii) inform the coordinator immediately of any events or circumstances likely to affect significantly or delay the implementation of the action (see Article 17); (iii) submit to the coordinator in good time: - individual financial statements for itself [and its linked third parties] and, if required, certificates on the financial statements (see Article 20); - the data needed to draw up the technical reports (see Article 20); - ethics committee opinions and notifications or authorisations for activities raising ethical issues (see Article 34); - any other documents or information required by the [Agency or the] Commission under the Agreement, unless the Agreement requires the beneficiary to submit this information directly to the [Agency or the] Commission. (b) The coordinator must: (i) monitor that the action is implemented properly (see Article 7); (ii) act as the intermediary for all communications between the beneficiaries and the [Commission][Agency] (in particular, providing the [Commission][Agency] with the information described in Article 17), unless the Agreement specifies otherwise; (iii) request and review any documents or information required by the [Commission][Agency] and verify their completeness and correctness before passing them on to the [Commission][Agency]; (iv) submit the deliverables and reports to the [Commission][Agency] (see Articles 19 and 20); (v) ensure that all payments are made to the other beneficiaries without unjustified delay (see Article 21); (vi) inform the [Commission][Agency] of the amounts paid to each beneficiary, when required under the Agreement (see Articles 44 and 50) or requested by the [Commission][Agency]. The coordinator may not delegate the above-mentioned tasks to any other beneficiary or subcontract them to any third party. [OPTION to be used when the coordinator is a secondary or higher education establishment or public body and there is an ‘authorisation to administer’ given to a third party created, controlled or affiliated to the coordinator: As an exception, the coordinator delegates the tasks set out in Point 2(b)(v) and (vi) above to [insert name of third party with an authorisation to administer]. The coordinator retains sole responsibility for the EU contribution and for compliance with the obligations under the Agreement.] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 258 41.3 Internal arrangements between beneficiaries — Consortium agreement [OPTION to be used, unless the work programme specifies that there is no need for a consortium agreement: The beneficiaries must have internal arrangements regarding their operation and coordination to ensure that the action is implemented properly. These internal arrangements must be set out in a written ‘consortium agreement’ between the beneficiaries, which may cover: - internal organisation of the consortium; - management of access to the electronic exchange system; - distribution of EU funding; - additional rules on rights and obligations related to background and results (including whether access rights remain or not, if a beneficiary is in breach of its obligations) (see Section 3 of Chapter 4); - settlement of internal disputes; - liability, indemnification and confidentiality arrangements between the beneficiaries. The consortium agreement must not contain any provision contrary to the Agreement. [OPTION: Not applicable] 41.4 Relationship with complementary beneficiaries — Collaboration agreement [OPTION for complementary grants if foreseen in the work programme: The beneficiaries must conclude a written ‘collaboration agreement’ with the complementary beneficiaries to coordinate the work under the Agreement and the complementary grant agreement(s) (see Article 2), covering for instance: - efficient decision making processes and - settlement of disputes. The collaboration agreement must not contain any provision contrary to the Agreement. The beneficiaries and complementary beneficiaries must create and participate in common boards and advisory structures to decide on collaboration and synchronisation of activities, including on management of outcomes, common approaches towards standardisation, SME involvement, links with regulatory and policy activities, and commonly shared dissemination and awareness raising activities. The beneficiaries must give access to their results to the complementary beneficiaries, for the purposes of the complementary grant agreement(s) (see Article 31.6). The beneficiaries must share the technical reports (see Article 20.3 and 20.4). The confidentiality obligations in Article 36 apply.] [OPTION: Not applicable] 41.5 Relationship with partners of a joint action — Coordination agreement [OPTION for joint actions (joint call with a third country or an international organisation): The beneficiaries must conclude a ‘coordination agreement’ with the partners of the third country or international organisation action (see Article 2), covering for instance: - the internal organisation of the beneficiaries in both actions, including the decision making procedures; - rules on intellectual property rights (for example regarding protection, dissemination, use and access rights); H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 259 1. Division of roles and responsibilities — Roles and responsibilities within the consortium The general division of roles and responsibilities within the consortium is as follows:  the coordinator must coordinate and manage the grant and is the central contact point for the Commission/Agency  the beneficiaries must all together contribute to a smooth and successful implementation of the grant (i.e. contribute to the proper implementation of the action, comply with their own obligations under the GA and support the coordinator in his obligations). The beneficiaries must send all documents/information via the coordinator — unless, for specific cases, the Commission/Agency requests them to provide such information directly to it (see Article 22). Example: in case of an audit, the beneficiaries must submit the documents requested directly to the auditors, if requested so. 2. The coordinator’s roles and responsibilities The coordinator is the central contact point for the Commission/Agency and represents the consortium (towards the Commission/Agency). MONO-BENEFICIARY: 41.2 Internal division of roles and responsibilities Not applicable 41.3 Internal arrangements between beneficiaries — Consortium agreement Not applicable 41.4 Relationship with complementary beneficiaries — Collaboration agreement [...] 41.5 Relationship with partners of a joint action — Coordination agreement […] - the settlement of internal disputes; - liability, indemnification and confidentiality arrangements between the beneficiaries in both actions. The coordination agreement must not contain any provision contrary to the Agreement.] [OPTION: Not applicable] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 260 For this purpose, the GA imposes a number of specific coordination tasks. Main coordination tasks:  Monitor that the action is implemented properly  Act as the intermediary for all communications — unless the Agreement specifies otherwise  Request and review any documents or information required and verify their completeness and correctness The coordinator must check the quality of the documents submitted by the beneficiaries, including:  reviewing the individual financial statements from each beneficiary to verify consistency with the action tasks, as well as their completeness and correctness (e.g. that the addition of the different costs declared by the beneficiary corresponds to the total amount declared, or that the 25% flat-rate for indirect costs is correctly calculated) The coordinator is not, however, obliged to verify the eligibility of these costs (under Article 6) or to request justifications. Each beneficiary remains responsible for the cost it declares (both as regards eligibility and as regards sufficient records and supporting documents to substantiate them).  verifying that all the requested documents are submitted by the beneficiary (e.g. the summary, the questionnaire etc.)  verifying that the beneficiary submits the documents in the requested format  verifying that the technical information submitted by a beneficiary concerns its action tasks as described in Annex 1 (and not something unrelated to the action).  Submit the deliverables and reports  Distribute payments to the other beneficiaries, without unjustified delay  Inform the Commission/Agency of the amounts paid to each beneficiary, if requested to do so (see Article 44.1.2) The coordination tasks listed in Article 41.2 can NOT be subcontracted or outsourced to a third party. They can NOT be carried out by other beneficiaries. (By contrast, the coordinator remains free — like any other beneficiary — to subcontract or use in-kind contributions for other tasks; see Articles 11, 12, 13). Specific cases (coordinator): Authorisation to administer — Coordinators that are secondary or higher education establishments and public bodies may exceptionally delegate the administration of the payments to another legal entity (third party), in most cases a foundation. .The third party must fulfil the following conditions:  they have must have been granted the ‘authorisation to administer’ AND  it must be affiliated, controlled or set up by the coordinator in order to handle its administrative affairs, including receiving and administering EU funds. Coordination and administration tasks are considered action tasks. Coordinators using a third party with authorisation to administer remain fully responsible for it under the GA. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 261 In this case, the bank account number to be provided under Article 21.8 must be that of the entity and the payments will be transferred directly to it. The entity must therefore be registered in the Beneficiary Register and validated by the Commission/Agency. It will get its own PIC — although it is not a beneficiary. The costs of the entity may be declared by the coordinator as in-kind contributions (free of charge or against payment; see Articles 6, 11 and 12). Scientific coordinator — Non-administrative coordination tasks (i.e. tasks not listed in this Article) can in principle be carried out by another beneficiary (e.g. scientific coordination of the action). Such a beneficiary may internally (i.e. within the consortium) be called ‘scientific coordinator’. In the relationship with the Commission/Agency, it remains however one of the ‘other beneficiaries’ of the GA; it will not be considered the action’s coordinator. Costs for scientific coordination can be eligible, if they comply with the eligibility conditions set out in Article 6. 3. Internal arrangements between beneficiaries — Consortium agreement The beneficiaries must conclude a consortium agreement to ensure a smooth and successful project implementation — unless exceptionally provided otherwise in the work programme/call. Best practice: In view of their importance for avoiding disputes and ensuring a smooth implementation of the grant, the Commission/Agencies strongly recommend that every consortium sets up a consortium agreement, even if not mandatory. The ‘consortium agreement’ is an agreement between members of the consortium, to set out their internal arrangements for implementing the grant. It is purely internal; the EU/Euratom is not party and has NO responsibility for it (nor for any adverse consequences). The consortium agreement should complement the GA and must NOT contain any provision contrary to it (or to the Rules for Participation Regulation No 1290/2013 or the Financial Regulation No 966/2012). The consortium agreement should in principle be negotiated and concluded before the signature of the GA (i.e. each beneficiary should sign the consortium agreement before acceding to the GA). Otherwise, there is usually a serious risk that prolonged disagreement jeopardises the action. Of course, the consortium agreement does not have to remain the same during the lifetime of the action, it can be modified by the consortium at any moment. The consortium agreement must be in writing. It may be a simple written agreement or take some other form (e.g. a notarial deed or part of the statutes of a separate legal entity, such as a European Economic Interest Grouping, association or joint venture). Best practice: The beneficiaries should carefully consider the advantages and disadvantages of the different legal forms, and choose the one that best fits the consortium’s specific needs. 4. Relationship with complementary beneficiaries — Collaboration agreement If the GA provides for this option, the beneficiaries must conclude a collaboration agreement to ensure a smooth and successful project implementation. The option will be inserted for ‘complementary actions’ (see Article 2). For guidance on consortium agreements, see the Online Manual and the Guidance — How to draw up your consortium agreement. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 262 A ‘collaboration agreement’ is an agreement between the consortium and the beneficiaries of another complementary H2020 grant, to coordinate their work under the different GAs. It is purely internal; the EU/Euratom is not party and has NO responsibility for them (nor for any adverse consequences). 5. Relationship with participants of a joint action — Coordination agreement If the GA provides for this option, the beneficiaries must conclude a coordination agreement, to ensure a smooth and successful project implementation. The option will be inserted for ‘jointly funded actions’ (see Article 2). A ‘coordination agreement’ is an agreement between the consortium and the participants of the third country/international organisation (IO) action (see Article 2). It is purely internal; the EU/Euratom is not party and has NO responsibility for it (or for any adverse consequences). The coordination agreement should complement the grant agreements and must NOT contain any provision contrary to them (or to the Rules for Participation Regulation No 1290/2013 or the Financial Regulation No 966/2012). Moreover, it must be in line with the consortium agreement. It can NOT replace the consortium agreement (and vice versa).The coordination agreement should in principle be negotiated and concluded before any work is begun. The work programme/call may require that proposals include a draft coordination agreement. The coordination agreement can take various forms, but a standard written agreement is most common. For guidance on coordination agreements, see the Online Manual and the Guidance — How to draw up your coordination agreement. the Guidance — How to draw up your coordination agreement. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 263 CHAPTER 6 REJECTION OF COSTS — REDUCTION OF THE GRANT — RECOVERY — PENALTIES — DAMAGES — SUSPENSION — TERMINATION — FORCE MAJEURE SECTION 1 REJECTION OF COSTS — REDUCTION OF THE GRANT — RECOVERY — PENALTIES ARTICLE 42 — REJECTION OF INELIGIBLE COSTS CHAPTER 6 REJECTION OF COSTS — REDUCTION OF THE GRANT — RECOVERY — PENALTIES — DAMAGES — SUSPENSION — TERMINATION — FORCE MAJEURE SECTION 1 REJECTION OF COSTS — REDUCTION OF THE GRANT — RECOVERY — PENALTIES ARTICLE 42 — REJECTION OF INELIGIBLE COSTS 42.1 Conditions 42.1.1 The [Commission][Agency] will — at the time of an interim payment, at the payment of the balance or afterwards — reject any costs which are ineligible (see Article 6), in particular following checks, reviews, audits or investigations (see Article 22). 42.1.2 The rejection may also be based on the extension of findings from other grants to this grant, under the conditions set out in Article 22.5.2. 42.2 Ineligible costs to be rejected — Calculation — Procedure Ineligible costs will be rejected in full [OPTION if lump sum foreseen in Article 5.2:, except for lump sum costs, which will be rejected proportionally to the tasks or parts of the action not implemented]. If the [Commission][Agency] rejects costs without reduction of the grant (see Article 43) or recovery of undue amounts (see Article 44), it will formally notify the coordinator or beneficiary concerned the rejection of costs, the amounts and the reasons why (if applicable, together with the notification of amounts due; see Article 21.5). The coordinator or beneficiary concerned may — within 30 days of receiving notification — formally notify the [Commission][Agency] of its disagreement and the reasons why. If the [Commission][Agency] rejects costs with reduction of the grant or recovery of undue amounts, it will formally notify the rejection in the ‘pre-information letter’ on reduction or recovery set out in Articles 43 and 44. 42.3 Effects If the [Commission][Agency] rejects costs at the time of an interim payment or the payment of the balance, it will deduct them from the total eligible costs declared, for the action, in the periodic or final summary financial statement (see Articles 20.3 and 20.4). It will then calculate the interim payment or payment of the balance as set out in Articles 21.3 or 21.4. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 264 1. Rejection of ineligible costs If the Commission/Agency finds ineligible costs (in particular, following a check, audit, extension of audit findings, review or OLAF investigation), it will reject these costs (— in full, i.e. for the amount that is ineligible). Rejection of costs can take place at any moment — at the time of an interim payment, of the payment of the balance or afterwards. 2. Procedure The procedure differs according to the situation:  if rejection of costs is combined with a reduction of the grant or a recovery: there will be an ex ante ‘contradictory procedure’  if there is only rejection of costs: there will be NO ex ante contradictory procedure, but the possibility to object ex post to the rejection (‘review procedure’). In both cases, the Commission/Agency will explain which costs were rejected and why they were rejected. In both cases, beneficiaries can object and bring forward their arguments for disagreeing. The switch to the ex post review procedure allows the Commission/Agency however to pay promptly within the payment deadlines (by postponing the discussion on the disputed costs). Basic contradictory procedure: Step 1 — The Commission/Agency informs the coordinator/beneficiary concerned of its intention (and the reasons why), in a pre-information letter (sent via the electronic exchange system, see Article 52). Step 2 — The coordinator/beneficiary concerned has 30 days to submit observations. (An extension may be granted on justified request by the coordinator/beneficiary concerned — if submitted within the 30 days.) Step 3 — The Commission/Agency analyses the observations and either stops the procedure or confirms it. If necessary, this procedure will be combined with a procedure on the reduction of the grant and/or recovery (see Articles 43 and 44). In this case, there will be one single pre- A rejection of costs will be made for any violation of cost eligibility rules (see Articles 6, 8-16) and will correspond to the amount that is ineligible. . If the [Commission][Agency] — after an interim payment but before the payment of the balance — rejects costs declared in a periodic summary financial statement, it will deduct them from the total eligible costs declared, for the action, in the next periodic summary financial statement or in the final summary financial statement. It will then calculate the interim payment or payment of the balance as set out in Articles 21.3 or 21.4. If the [Commission][Agency] rejects costs after the payment of the balance, it will deduct the amount rejected from the total eligible costs declared, by the beneficiary, in the final summary financial statement. It will then calculate the revised final grant amount as set out in Article 5.4. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 265 information letter for all procedures and one single reply (i.e. beneficiaries are expected to submit one single set of observations that address the different aspects). Review procedure: Step 1 — The Commission/Agency informs the coordinator about the rejection of costs and notifies the amounts that will be paid out (‘notification of amounts due’; see Article 21.5). Step 2 — If the beneficiaries disagree, the coordinator/beneficiary concerned has 30 days to inform the Commission/Agency of its objections (using the ‘formal notifications box’ in electronic exchange system). Step 3 — The Commission/Agency analyses the request for review and informs the coordinator of its outcome. Depending on the moment when costs are rejected, this procedure will be directed either at the coordinator or the beneficiary concerned:  for rejections the time of an interim payment or the payment of the balance: normally the coordinator  for rejections after payment of the balance: normally the beneficiary concerned. If it is directed at the coordinator, the coordinator must immediately inform the beneficiary concerned offline, via its usual communication channels (e.g. e-mail, registered letters with proof of delivery, etc.) and ask for its comments. It must also inform the other beneficiaries. 3. Rejection of costs at the time of an interim payment or the payment of the balance If the Commission/Agency rejects costs (declared in the periodic or final report) at the moment of an interim payment or the payment of the balance, it will deduct them and calculate the amount to be paid accordingly. If the Commission/Agency finds ineligible costs (declared in a previous report and already paid for) in-between payments, it will reject the costs at the next payment (i.e. deduct the amount rejected from the costs declared in the next summary financial statement and calculate the amount to be paid accordingly). Example for calculating a rejection at an interim payment/payment of the balance: Case 1: Action with three beneficiaries (A, B and C) and a reimbursement rate of 100 %. Maximum grant amount: EUR 500 000. Pre-financing: EUR 200 000. Costs declared by beneficiary A at the end of the first reporting period: EUR 95 000 (direct costs) + EUR 23 750 (indirect costs 25 %) = EUR 118 750. Costs declared by beneficiary B at the end of the first reporting period: EUR 115 000 (direct costs) +EUR 28 750 (indirect costs 25 %) = EUR 143 750. Costs declared by beneficiary C at the end of the first reporting period: EUR 90 000 (direct costs) +EUR 22 500 (indirect costs 25 %) = EUR 112 500. Total costs declared for the action at the end of the first reporting period: EUR 118 750 + EUR 143 750 + EUR 112 500 = EUR 375 000. Some direct costs declared by beneficiary A are rejected for an amount of EUR 10 000 + EUR 2 500 (25 % flat rate for indirect costs) = EUR 12 500. Total declared eligible costs approved by the Commission at the end of the first reporting period: EUR 375 000 — EUR 12 500 = EUR 362 500. Interim payment: Application of the reimbursement rate: 100%: EUR 362 500 Limit to 90 % of the maximum grant amount minus pre-financing: EUR 450 000— EUR 200 000 = EUR 250 000. Amount due as interim payment: EUR 250 000 Case 2 (in between payments): Total costs declared for the action in the 1st periodic report: = EUR 375 000 H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 266 Interim payment for the 1st periodic report = EUR 375 000 Cost rejected after interim payment or 1st periodic report: EUR 12 500 Total costs declared and accepted for the action in 2nd periodic report: = EUR 100 000 Total eligible costs to be considered for the 2nd interim payment: EUR 100 000 — EUR 12 500 = EUR 87 500 4. Rejection of costs after payment of the balance If the Commission/Agency rejects costs (declared in a periodic or final report) after the payment of the balance, it will deduct the amount rejected from the costs declared by the beneficiary in the final summary financial statement and calculate a revised grant amount for this beneficiary (see Article 5.4). If the revised grant amount for the beneficiary is lower than its share in the final grant amount, the Commission/Agency will recover the difference (see Article 44). Example for calculating a rejection after the payment of the balance: Action with three beneficiaries (A, B and C) and a reimbursement rate of 100 %. Maximum grant amount: EUR 500 000 Eligible costs accepted for beneficiary A at payment of the balance: EUR 150 000 (direct costs) + EUR 37 500 (25 % flat rate for indirect costs) = EUR 187 500 Eligible costs accepted for beneficiary B at payment of the balance: EUR 125 000 (direct costs) + EUR 31 250 (25 % flat rate for indirect costs) = EUR 156 250 Eligible costs accepted for beneficiary C at payment of the balance: EUR 120 000 (direct costs) + EUR 30 000 (25 % flat rate for indirect costs) = EUR 150 000 Final grant amount at payment of the balance (action properly implemented, no receipt): EUR 187 500 + EUR 156 250 + EUR 150 000 = EUR 493 750 An audit concluded that the direct costs of beneficiary A were not eligible for an amount of EUR 30 000 Revised grant amount for beneficiary A: EUR 150 000 — EUR 30 000 = EUR 120 000 + EUR 30 000 (25 % flat rate for indirect costs) = EUR 150 000. The share of beneficiary A in the final grant amount = EUR 187 500. The EU contribution that will be recovered from beneficiary A: EUR 187 500 — EUR 150 000 = EUR 37 500. The EU contributions of the other beneficiaries are unchanged. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 267 ARTICLE 43 — REDUCTION OF THE GRANT 1. Reduction of the grant If the Commission/Agency finds (in particular, following a check, audit, extension of audit findings, review or OLAF investigation) that the action has not been properly implemented or that other obligations have been breached, it may reduce the maximum grant amount set out in Article 5.1 (— in proportion to the improper implementation of the action or the seriousness of the breach). ARTICLE 43 — REDUCTION OF THE GRANT 43.1 Conditions 43.1.1 The [Commission][Agency] may — at the payment of the balance or afterwards — reduce the maximum grant amount (see Article 5.1), if the action has not been implemented properly as described in Annex 1 or another obligation under the Agreement has been breached. 43.1.2 The [Commission][Agency] may also reduce the maximum grant amount on the basis of the extension of findings from other grants to this grant, under the conditions set out in Article 22.5.2. 43.2 Amount to be reduced — Calculation — Procedure The amount of the reduction will be proportionate to the improper implementation of the action or to the seriousness of the breach. Before reduction of the grant, the [Commission][Agency] will formally notify a ‘pre-information letter’ to the coordinator or beneficiary concerned: - informing it of its intention to reduce the grant, the amount it intends to reduce and the reasons why and - inviting it to submit observations within 30 days of receiving notification. If the [Commission][Agency] does not receive any observations or decides to pursue reduction despite the observations it has received, it will formally notify confirmation of the reduction (if applicable, together with the notification of amounts due; see Article 21). 43.3 Effects If the [Commission][Agency] reduces the grant at the time of the payment of the balance, it will calculate the reduced grant amount for the action and then determine the amount due as payment of the balance (see Articles 5.3.4 and 21.4). If the [Commission][Agency] reduces the grant after the payment of the balance, it will calculate the revised final grant amount for the beneficiary concerned (see Article 5.4). If the revised final grant amount for the beneficiary concerned is lower than its share of the final grant amount, the [Commission][Agency] will recover the difference (see Article 44). A reduction of the grant is possible for any breach of obligation (under the GA or applicable EU, international and national law; see Article 7) and it will be made in proportion to the seriousness of that breach (e.g. in case of fraud, systemic irregularities or submission of false information — in the award procedure or during action implementation the reduction may be up to a 100%). . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 268 Reduction of the grant can take place at or after the payment of the balance, NOT before. If improper implementation (e.g. delays) or a breach of obligations is found before the end of the action, the beneficiaries must take all possible corrective steps to bring the action implementation back into line with the GA. A reduction can also be due to a beneficiary not receiving EU funding (i.e. improper implementation or breach of obligations by that beneficiary; see Article 9). 2. Procedure The Commission/Agency will follow a contradictory procedure (for the basic contradictory procedure, see Article 42). Depending on the moment the reduction takes place, this procedure will be directed either at the coordinator or the beneficiary concerned:  for reductions at payment of the balance: normally the coordinator  for reductions after payment of the balance:  normally the beneficiary concerned, if the finding of improper implementation or breach concerns a beneficiary  normally the coordinator, if the finding cannot be linked to one (or more) specific beneficiaries (and therefore concerns the consortium). If it is directed at the coordinator, the coordinator must immediately inform the beneficiaries concerned offline, via its usual communication channels (e.g. e-mail, registered letters with proof of delivery, etc.) and ask for their comments. It must also inform the other beneficiaries. 3. Reduction of the grant at the payment of the balance If the Commission/Agency reduces the grant at the payment of the balance, it will make the reduction at the level of the action and calculate the balance to be paid (i.e. final grant amount) accordingly. Example for calculating a reduction at the payment of the balance: Consortium with a maximum grant amount of EUR 3 000 000 (100 %.reimbursement rate) Pre-financing: EUR 750 000 Interim payments: EUR 1 500 000 Eligible costs accepted at the time of payment of the balance: EUR 2 900 000 The Commission carries out a review which demonstrates that some work packages were not carried out and only 80% of the action was carried out. Following the review, the Commission reduces the maximum grant amount by 20 % (EUR 600 000) because of improper implementation and notifies the consortium via a pre-information letter notified to the coordinator. Reduced maximum grant amount at the payment of the balance: EUR 3 000 000- EUR 600 000 = EUR 2 400 000. Final grant amount: Lower between EUR 2 900 000 and EUR 2 400 000 = 2 400 000 Payments already made (pre-financing + interim) EUR 2 250 000= EUR 750 000 + EUR 1 500 000 Amount due as payment of the balance: EUR 150 000 (EUR 2 400 000 – EUR 2 250 000). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 269 4. Reduction of the grant after payment of the balance The financial consequences of a reduction of the grant after the payment of the balance will be calculated at beneficiary level for each beneficiary concerned. The ‘beneficiaries concerned’ are those who have breached their obligations or improperly implemented the action resulting in the reduction. Procedure for reduction of the grant after payment of the balance: The Commission/Agency: Step 1 — Determines the amount to be reduced (in proportion to the improper implementation or seriousness of the breach). Step 2 — Identifies the beneficiaries in fault and allocates that amount among them according to their responsibility in the improper implementation or breach of obligation. If the improper implementation or breach of obligation cannot be linked to one or more specific beneficiaries (and therefore concerns the whole consortium) each beneficiary will have to bear a pro-rata share of the reduction. For each of those beneficiaries (the ‘beneficiaries concerned’): Step 3 — Determines the beneficiary’s share in the final grant amount’, as follows: {{total accepted eligible costs for the beneficiary x reimbursement rate}67 divided by {sum of total accepted eligible costs x reimbursement rate, for each beneficiary}68 multiplied by the final grant amount before the reduction (see Article 5.3)} Step 4 — Calculates the beneficiary’s revised final grant amount as follows: {total accepted eligible costs for the beneficiary x reimbursement rate}69 – amount of reduction allocated to the beneficiary under step 2 Step 5 — If revised final grant amount < share in the final grant amount, the Commission / Agency will recover the difference from the beneficiary. Example for calculating a reduction linked to (one or more) specific beneficiaries: Innovation action with beneficiaries: X, Y and Z. Beneficiaries X and Z are non-profit legal entities with a 100% reimbursement rate. Maximum grant amount = EUR 2 900 000. Situation at payment of the balance: Data source Beneficiary X Beneficiary Y Beneficiary Z Total Annex 2 (estimated budget) Estimated costs budgeted 700 000 2 000 000 800 000 3 500 000 A Reimbursement rate (%) 100 70 100 67 Plus the same formula applied to third parties linked to the beneficiary (if any). 68 Including linked third parties. 69 Plus the same formula applied to third parties linked to the beneficiary (if any). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 270 B Maximum grant amount according to costs budgeted 2 900 000 C Final financial statements Beneficiary's total accepted eligible costs 825 000 1 850 000 800 000 3 475 000 D First step for the calculation of the "Final Grant Amount (Article 5.3.1) Beneficiary’s total accepted costs x reimbursement rate (C x A) 825 000 1 295 000 800 000 2 920 000* * The final grant amount is capped at EUR 2 900 000 (maximum grant amount). Even if D results in a higher amount, the Commission/Agency can never pay more than the maximum grant amount set in the grant agreement. Following a review after the payment of the balance, the Commission decides to reduce the grant due to improper implementation because some of the action tasks were not carried out. Step 1 Reduction of the maximum grant amount: The Commission decides on the amount to be reduced in proportion to the improper implementation identified Example: the Commission decides to reduce the maximum grant amount by EUR 300 000. Step 2 Identification of the beneficiaries concerned and allocation of the amount to be reduced: The review concluded that the improper implementation was due to the fact that beneficiary X carried out only part of its tasks as set out in Annex 1. Therefore, the reduction is allocated in full to beneficiary X (see F below). Step 3 Beneficiary’s share in the final grant amount: E Beneficiary’s share in final grant amount 819 349** 1 286 130 794 521 2 900 000 ** Calculation: [(825 000 x 100 %) / 2 920 000] X 2 900 000 Step 4 Calculation of the revised final grant amount: Beneficiary X Beneficiary Y Beneficiary Z Total F Part of the reduction allocated to the beneficiary 300 000 0 0 300.000 G Beneficiary’s revised final grant amount (D - F) 525 000 1 295 000 800 000 2 620 000 Step 5 Calculation of the recovery: Amount to be recovered (E – G) 294 349 0 0 294 349 The amount to be recovered is less than the amount reduced because of the overspending (eligible costs that were declared but not taken into account at payment of the balance because of the capping at maximum grant amount). For recovery (see Article 44.1.3) H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 271 Example for calculating a reduction NOT linked to (one or more) specific beneficiaries: Same example as above except that the reduction is not linked to specific beneficiaries. The review concluded that the improper implementation was due to the consortium as a whole and cannot be attributed to (one or more) specific beneficiaries. The amount to be reduced is therefore allocated evenly among the beneficiaries (300 000 / 3 = 100 000; see F below). Step 3 Beneficiary’s share in the final grant amount: E Beneficiary’s share in final grant amount 819 349** 1 286 130 794 521 2 900 000 ** Calculation: [(825 000 x 100 %) / 2 920 000] X 2 900 000 Step 4 Calculation of the revised final grant amount: Beneficiary X Beneficiary Y Beneficiary Z Total F Part of the reduction allocated to the beneficiary 100 000 100 000 100 000 300 000 G Beneficiary’s revised final grant amount (D - F) 725 000 1 195 000 700 000 2 620 000 Step 5 Calculation of the recovery: Amount to be recovered (E – G) 94 349,32 91 130,14 94 520,55 280 000 For recovery (see Article 44.1.3) H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 272 ARTICLE 44 — RECOVERY OF UNDUE AMOUNTS ARTICLE 44 — RECOVERY OF UNDUE AMOUNTS 44.1 Amount to be recovered — Calculation — Procedure The [Commission][Agency] will — after termination of the participation of a beneficiary, at the payment of the balance or afterwards — claim back any amount that was paid but is not due under the Agreement. Each beneficiary’s financial responsibility in case of recovery is limited to its own debt [OPTION if Article 14 applies: (including undue amounts paid by the [Commission][Agency] for costs declared by its linked third parties)], except for the amount retained for the Guarantee Fund (see Article 21.4). MULTI-BENEFICIARY: 44.1.1 Recovery after termination of a beneficiary’s participation If recovery takes place after termination of a beneficiary’s participation (including the coordinator), the [Commission][Agency] will claim back the undue amount from the beneficiary concerned by formally notifying it a debit note (see Article 50.2 and 50.3). This note will specify the amount to be recovered, the terms and the date for payment. If payment is not made by the date specified in the debit note, the [Agency or the] Commission] will recover the amount: (a) by ‘offsetting’ it — without the beneficiary’s consent — against any amounts owed to the beneficiary concerned by the [Agency, the] Commission or an[other] executive agency (from the EU or Euratom budget). In exceptional circumstances, to safeguard the EU’s financial interests, the [Commission][Agency] may offset before the payment date specified in the debit note; (b) [OPTION if Article 14 applies and joint and several liability has been requested by the [Commission][Agency]: if a linked third party has accepted joint and several liability (see Article 14), by holding the third party liable up to the maximum EU contribution indicated, for the linked third party, in the estimated budget (see Annex 2) and/or][OPTION: not applicable;] (c) by taking legal action (see Article 57) or by adopting an enforceable decision under Article 299 of the Treaty on the Functioning of the EU (TFEU) and Article 79(2) of the Financial Regulation No 966/2012. If payment is not made by the date specified in the debit note, the amount to be recovered (see above) will be increased by late-payment interest at the rate set out in Article 21.11, from the day following the payment date in the debit note, up to and including the date the [Agency or the] Commission receives full payment of the amount. Partial payments will be first credited against expenses, charges and late-payment interest and then against the principal. Bank charges incurred in the recovery process will be borne by the beneficiary, unless Directive 2007/64/EC 51 applies. 44.1.2 Recovery at payment of the balance If the payment of the balance takes the form of a recovery (see Article 21.4), the [Commission][Agency] will formally notify a ‘pre-information letter’ to the coordinator: - informing it of its intention to recover, the amount due as the balance and the reasons why; 51 Directive 2007/64/EC of the European Parliament and of the Council of 13 November 2007 on payment services in the internal market amending Directives 97/7/EC, 2002/65/EC, 2005/60/EC and 2006/48/EC and repealing Directive 97/5/EC (OJ L 319, 05.12.2007, p. 1). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 273 - specifying that it intends to deduct the amount to be recovered from the amount retained for the Guarantee Fund; - requesting the coordinator to submit a report on the distribution of payments to the beneficiaries within 30 days of receiving notification, and - inviting the coordinator to submit observations within 30 days of receiving notification. If no observations are submitted or the [Commission][Agency] decides to pursue recovery despite the observations it has received, it will confirm recovery (together with the notification of amounts due; see Article 21.5) and: - pay the difference between the amount to be recovered and the amount retained for the Guarantee Fund, if the difference is positive or - formally notify to the coordinator a debit note for the difference between the amount to be recovered and the amount retained for the Guarantee Fund, if the difference is negative. This note will also specify the terms and the date for payment. If the coordinator does not repay the [Commission][Agency] by the date in the debit note and has not submitted the report on the distribution of payments: the [Agency or the] Commission will recover the amount set out in the debit note from the coordinator (see below). If the coordinator does not repay the [Commission][Agency] by the date in the debit note, but has submitted the report on the distribution of payments: the [Commission][Agency] will: (a) identify the beneficiaries for which the amount calculated as follows is negative: {{{{beneficiary’s costs declared in the final summary financial statement and approved by the [Commission][Agency] multiplied by the reimbursement rate set out in Article 5.2 for the beneficiary concerned [plus its linked third parties’ costs declared in the final summary financial statement and approved by the [Commission][Agency] multiplied by the reimbursement rate set out in Article 5.2 for each linked third party concerned]} divided by the EU contribution for the action calculated according to Article 5.3.1} multiplied by the final grant amount (see Article 5.3)}, minus {pre-financing and interim payments received by the beneficiary}}. (b) formally notify to each beneficiary identified according to point (a) a debit note specifying the terms and date for payment. The amount of the debit note is calculated as follows: {{amount calculated according to point (a) for the beneficiary concerned divided by the sum of the amounts calculated according to point (a) for all the beneficiaries identified according to point (a)} multiplied by the amount set out in the debit note formally notified to the coordinator}. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 274 If payment is not made by the date specified in the debit note, the [Commission][Agency] will recover the amount: (a) by offsetting it — without the beneficiary’s consent — against any amounts owed to the beneficiary concerned by the [Agency, the] Commission or an[other] executive agency (from the EU or Euratom budget). In exceptional circumstances, to safeguard the EU’s financial interests, the [Commission][Agency] may offset before the payment date specified in the debit note; (b) by drawing on the Guarantee Fund. The [Agency or the] Commission will formally notify the beneficiary concerned the debit note on behalf of the Guarantee Fund and recover the amount: (i) [OPTION if Article 14 applies and joint and several liability has been requested by the [Commission][Agency]: if a linked third party has accepted joint and several liability (see Article 14), by holding the third party liable up to the maximum EU contribution indicated, for the linked third party, in the estimated budget (see Annex 2) and/or][OPTION: not applicable] (ii) by taking legal action (see Article 57) or by adopting an enforceable decision under Article 299 of the Treaty on the Functioning of the EU (TFEU) [Article 106a of the Euratom Treaty] and Article 79(2) of the Financial Regulation No 966/2012. If payment is not made by the date in the debit note, the amount to be recovered (see above) will be increased by late-payment interest at the rate set out in Article 21.11, from the day following the payment date in the debit note, up to and including the date the [Agency or the] Commission] receives full payment of the amount. Partial payments will be first credited against expenses, charges and late-payment interest and then against the principal. Bank charges incurred in the recovery process will be borne by the beneficiary, unless Directive 2007/64/EC applies. MULTI-BENEFICIARY: 44.1.3 Recovery of amounts after payment of the balance If, for a beneficiary, the revised final grant amount (see Article 5.4) is lower than its share of the final grant amount, it must repay the difference to the [Commission][Agency]. The beneficiary’s share of the final grant amount is calculated as follows: {{{beneficiary’s costs declared in the final summary financial statement and approved by the [Commission][Agency] multiplied by the reimbursement rate set out in Article 5.2 for the beneficiary concerned [plus its linked third parties’ costs declared in the final summary financial statement and approved by the [Commission][Agency] multiplied by the reimbursement rate set out in Article 5.2 for each linked third party concerned]} divided by the EU contribution for the action calculated according to Article 5.3.1} multiplied by the final grant amount (see Article 5.3)}. If the coordinator has not distributed amounts received (see Article 21.7), the [Commission][Agency] will also recover these amounts. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 275 MONO-BENEFICIARY: 44.1.1 Recovery after termination of a beneficiary’s participation Not applicable MONO-BENEFICIARY: 44.1.2 Recovery at payment of the balance If the payment of the balance takes the form of a recovery (see Article 21.4), the [Commission][Agency] will formally notify a ‘pre-information letter’ to the beneficiary: […] MULTI-BENEFICIARY: 44.1.3 Recovery of amounts after payment of the balance If, the revised final grant amount (see Article 5.4) is lower than the final grant amount, the beneficiary must repay the difference to the [Commission][Agency]. […] The [Commission][Agency] will formally notify a pre-information letter to the beneficiary concerned: - informing it of its intention to recover, the due amount and the reasons why and - inviting it to submit observations within 30 days of receiving notification. If no observations are submitted or the [Commission][Agency] decides to pursue recovery despite the observations it has received, it will confirm the amount to be recovered and formally notify to the beneficiary concerned a debit note. This note will also specify the terms and the date for payment. If payment is not made by the date specified in the debit note, the [Commission][Agency] will recover the amount: (a) by offsetting it — without the beneficiary’s consent — against any amounts owed to the beneficiary concerned by the [Agency, the] Commission or an[other] executive agency (from the EU or Euratom budget). In exceptional circumstances, to safeguard the EU’s financial interests, the [Commission][Agency] may offset before the payment date specified in the debit note; (b) by drawing on the Guarantee Fund. The [Agency or the] Commission will formally notify the beneficiary concerned the debit note on behalf of the Guarantee Fund and recover the amount: (i) [OPTION if Article 14 applies and joint and several liability has been requested by the [Commission][Agency]: if a linked third party has accepted joint and several liability (see Article 14), by holding the third party liable up to the maximum EU contribution indicated, for the linked third party, in the estimated budget (see Annex 2) and/or] [OPTION: not applicable] (ii) by taking legal action (see Article 57) or by adopting an enforceable decision under Article 299 of the Treaty on the Functioning of the EU (TFEU) [Article 106a of the Euratom Treaty] and Article 79(2) of the Financial Regulation No 966/2012. If payment is not made by the date in the debit note, the amount to be recovered (see above) will be increased by late-payment interest at the rate set out in Article 21.11, from the day following the date for payment in the debit note, up to and including the date the [Agency or the] Commission receives full payment of the amount. Partial payments will be first credited against expenses, charges and late-payment interest and then against the principal. Bank charges incurred in the recovery process will be borne by the beneficiary, unless Directive 2007/64/EC applies H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 276 1. Recovery of undue amounts If it turns out that — due to a rejection of costs or a reduction of the grant (in particular, following a check, audit, extension of audit findings, review or OLAF investigation) — the Commission/Agency has paid too much, it will recover the amount that is undue. In addition, recovery may also take place in the context of the termination of the participation of a beneficiary. Recovery normally takes place only at payment of the balance or afterwards. Exceptionally, it can take place before, if a beneficiary’s participation is terminated. 2. Procedure The basic procedure for recovery is almost always the same: After a contradictory procedure, the Commission/Agency claims repayment of the amounts and then enforces recovery. Basic recovery procedure: Step 1 — Contradictory procedure The Commission/Agency informs the coordinator/beneficiary concerned of its intention to recover undue amounts (and their amount and the reasons why), in a pre-information letter. The coordinator/beneficiary concerned has 30 days to submit observations. Step 2 — Confirmation of recovery The Commission/Agency analyses the observations and either stops the procedure or confirms the recovery and issues a debit note against the coordinator/beneficiary concerned. The coordinator/beneficiary concerned must pay by the date specified in the debit note. Step 3 — Recovery If the coordinator/beneficiary concerned does not pay by this date, the Commission/Agency will recover the amount (with interest at the rate set out in Article 21.11), in one of the following ways:  by offsetting it70 ‘Offsetting’ means to deduct the amount the debtor owes to the Commission/Agency from another amount that the Commission/Agency owes to debtor. With the offsetting both amounts are considered ‘paid’. 70 See Article 80(1) of the Financial Regulation. The Commission/Agency will recover the undue amounts from the beneficiary that owes the money (i.e. with a debt towards the Commission/Agency). In case of recovery, each beneficiary’s financial responsibility is normally limited to its own debt (including undue amounts paid for costs declared by its linked third parties, if any). Only the responsibility for the amount retained for the Guarantee Fund (i.e. the 5% withheld from the pre- financing; see Article 21.4) is shared. If the Commission/Agency has requested joint and several liability of a linked third party (see Article 14), it may recover also from the linked third party. The linked third party’s financial responsibility (for the debt of the beneficiary) is limited to the maximum EU contribution specified for the third party in the estimated budget (Annex 2). . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 277 Normally, offsetting is carried out after the payment deadline has expired. However, in exceptional circumstances, the Commission/Agency may offset before this date, in order to safeguard the EU’s financial interests.71 If the offsetting takes place after the deadline for payment has expired, the interest must also be offset. (The interest is normally offset first, before the principal amount).  by drawing on the Guarantee Fund and then follow it with the debit note on behalf of the Guarantee Fund (to continue the recovery procedure):  if the Commission/Agency has requested joint and several liability from a linked third party: by holding the linked third party liable or  by either:  taking legal action in a national court or the Court of Justice of the EU (see Article 57.2) or  adopting a Commission decision that is enforceable within the meaning of Article 299 TFEU72.73 The decision taken by the Commission describes the claim and its grounds, notes that the debtor has not paid (despite having been sent a debit note and reminders) and indicates the amount of the debt. This decision — duly endorsed with the ‘order for enforcement’ issued by the competent authority in the Member State concerned — enables the Commission to have the debtor’s assets seized. 3. Recovery after termination of a beneficiary’s participation 71 See Article 87 of the Rules for Application. 72 See Article 299 TFEU: Acts of the Council, the Commission or the European Central Bank which impose a pecuniary obligation on persons other than States, shall be enforceable. Enforcement shall be governed by the rules of civil procedure in force in the State in the territory of which it is carried out. The order for its enforcement shall be appended to the decision, without other formality than verification of the authenticity of the decision, by the national authority which the government of each Member State shall designate for this purpose and shall make known to the Commission and to the Court of Justice of the European Union. When these formalities have been completed on application by the party concerned, the latter may proceed to enforcement in accordance with the national law, by bringing the matter directly before the competent authority. Enforcement may be suspended only by a decision of the Court. However, the courts of the country concerned shall have jurisdiction over complaints that enforcement is being carried out in an irregular manner. 73 See Article 79(2) of the Financial Regulation. Offsetting is normally implemented as a public law measure (i.e. directly on the basis of Article 80(1) of the the Financial Regulation No 966/2012). Therefore, the dispute settlement normally follows the public law remedies (i.e. Article 263 TFEU action; see Article 57.2). For the cases not covered by the Financial Regulation, offsetting will — exceptionally — be implemented as a purely contractual measure (e.g. offsetting with Commission and Agency claims, offsetting against international organisations). In this case, the normal contractual means for dispute settlement apply (i.e. Article 272 action, arbitration, etc; see Article 57.2). . Enforceable decisions are public law measures (i.e. taken directly on the basis of Article 79(2) of the Financial Regulation No 966/2012). Therefore, the dispute settlement normally follows the public law remedies (i.e. Article 263 TFEU action; see Article 57.2). . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 278 The Commission/Agency will recover after termination of a beneficiary’s participation, if that beneficiary did not pay back to the coordinator the amounts it received in excess and — following this — the Guarantee Fund had to intervene (see Article 50). 4. Recovery at the payment of the balance The Commission/Agency will recover at the payment of the balance, if the sum of the pre- financing and the interim payments exceeds the final grant amount (see Article 21.4). Procedure for recovery (at payment of the balance): Step 1 — Contradictory procedure with coordinator (see above point 2) and request to submit the ‘report on the distribution of payments’. Step 2 — Confirmation of recovery (see above point 2), together with notification of the amounts due (see Article 21.5) Step 3 — Release of the amounts retained for the PGF. The Commission/Agency will deduct the amount the consortium owes from the contribution to the Guarantee Fund that needs to be reimbursed to the consortium. If, after the debt is deducted, the difference is positive (i.e. part of the amount retained for the Guarantee Fund must be reimbursed) or if the result equals zero, the recovery process ends. Step 4 — If the difference is negative (i.e. if the amount retained for the Guarantee Fund was not sufficient to cover the consortium’s debt to the Commission/Agency and there is still an amount to be recovered), the Commission/Agency will send the coordinator a debit note for the amount still to be recovered. If the coordinator pays the debt by the date specified in the debit note the recovery process ends. Step 5a — If the coordinator does not repay the Commission/Agency by the date specified and if it has not submitted the report on the distribution of payments: the Commission/Agency will recover the amount from the coordinator exclusively. For the rest of the procedure, see point 2. Step 5b — If the coordinator does not repay the Commission/Agency by the date specified, but has submitted the report on the distribution of payments, the Commission/Agency will:  identify the beneficiaries that received funds in excess and  calculate the amount each beneficiary owes to the Commission/Agency. In order to identify the beneficiaries that received funds in excess, the amount each beneficiary actually received (as established on the basis of in the ‘report on the distribution of payments’) is compared to its share of the final grant amount (as established on the basis of the accepted eligible costs in the final summary financial statement). The share in the final grant amount is calculated by dividing the maximum EU contribution for the beneficiary (on the basis of the accepted eligible costs of the final summary financial statement) by the total maximum EU contribution for the consortium and by applying the percentage so obtained to the final grant amount. In order to calculate the amount each beneficiary owes (i.e. to distribute the debt towards the Commission/Agency among the beneficiaries that received funds in excess) the amount to be recovered will be split between the beneficiaries that have received payments in excess, in proportion to their relative share of the total payments in excess. Step 6 — The Commission/Agency will cancel the debit note sent to the coordinator and send a debit note to each beneficiary that received funds in excess, for its proportional share in the debt to the Commission/Agency. For the rest of the procedure, see point 2. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 279 Example for calculating a recovery at the payment of the balance: GA with a maximum grant amount of EUR 3 000 000 and with a reimbursement rate: 100 % Four beneficiaries: A (coordinator), B, C, D According to the estimated budget in Annex 2, the four beneficiaries were entitled to a maximum contribution for carrying out their part of the action set out in Annex 1 of EUR 800 000 (A); EUR 1200 000 (B); EUR 600 000 (C); EUR 400 000 (D) Total eligible costs approved by the Commission: EUR 2 430 000 Final grant amount: EUR 2 430 000 EU contribution per beneficiary based on the accepted eligible costs: A: EUR 600 000; B: EUR 1 100 000; C: EUR 400 000; D: EUR 330 000 Payments made by the Commission (pre-financing and interim payments): EUR 2 700 000 (limit of 90 % of the maximum grant amount). The Commission needs to recover EUR 2 700 000 minus EUR 2 430 000 = EUR 270 000. Amount retained for the Guarantee Fund (5 % of the maximum grant amount; see Article 21.2) = EUR 150 000. Payment effectively transferred to the coordinator: EUR 2 550 000 = EUR 2 700 000 - EUR 150 000 A pre-information letter is sent to the coordinator (beneficiary A) informing it that the Commission intends to recover EUR 270 000. No observations are made by the consortium, and the Commission confirms the amount. The Commission deducts the amount it needs to recover from the consortium from the amount retained for the Guarantee Fund that needs to be reimbursed to the consortium (EUR 150 000). The difference of EUR 120 000 needs to be recovered and the Commission sends a debit note for that amount. The coordinator does not reimburse the Commission and sends the report on the distribution of the payments among beneficiaries: A= EUR 400 000; B= EUR 1 200 000; C = EUR 600 000; D= EUR 350 000. Identification of the beneficiaries that received funds in excess: Coordinator A: share in the final grant: EUR 600 000; received EUR 400 000 (no payment in excess); Beneficiary B: share in the final grant: EUR 1 100 000; received EUR 1 200 000 (payment in excess of 100 000) Beneficiary C: share in the final grant: EUR 400 000; received EUR 600 000 (payment in excess of 200 000); Beneficiary D: share in the final grant: EUR 330 000; received EUR 350 000 (payment in excess of 20 000). Beneficiaries B, C and D received payments in excess of their EU contribution and will have to reimburse the Commission. Distribution of the debt to be reimbursed among the beneficiaries that have received payments in excess: The distribution of the final debt towards the Commission will be made in proportion to the payments in excess received by each beneficiary compared to the total payments made in excess. Total payments made in excess = 320 000. Beneficiary B’s share of the payments in excess: 100 000/320 000 = 31.25 %. Beneficiary C’s share of the payments in excess: 200 000/320 000 = 62.5 %. Beneficiary D’s share of the payments in excess: 20 000/320 000 = 6.25 %. The Commission will notify three debit notes for a cumulative amount of EUR 120,000 (270,000 – 150,000): beneficiary B with a debit note for the amount of 31.25 % x 120 000 = 37 500; beneficiary C for the amount of 62.5 % x 120 000 = 75 000; beneficiary D for the amount of 6.25 % x 120 000 = 7 500. Beneficiary A will have to recover the money owed to it from the other beneficiaries in the consortium. 5. Recovery after payment of the balance The Commission/Agency will recover after payment of the balance, if — due to a rejection of costs or a reduction of the grant (in particular, following a check, audit, extension of audit findings or OLAF investigation) — it finds out that it has paid too much (or that the coordinator has not distributed the payments received). Procedure for recovery after payment of the balance (due to a reduction of the grant): Step 1 — The Commission/Agency calculates a revised final grant amount for the beneficiary concerned (see Article 43) Step 2 — The Commission/Agency will calculate the amount to be recovered by comparing the revised final grant amount for the beneficiary concerned with its share of the final grant amount (see point 4). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 280 Step 3 — If revised final grant amount < share of the final grant amount, the Commission/Agency will recover the difference from the beneficiary. For the rest of the procedure, see point 2. Procedure for recovery after payment of the balance (due to a rejection of costs): Step 1 — The Commission/Agency calculates a revised final grant amount for the beneficiary concerned (see Article 42) Step 2 — The Commission/Agency calculates the amount to be recovered, by comparing the revised final grant amount for the beneficiary concerned with its share of the final grant amount (see point 4). The ‘share of the final grant amount’ is calculated as follows:  for an underspent GA: it equals the eligible costs declared by the beneficiary (and approved by the Commission) multiplied by its reimbursement rate ‘Underspent GA’ means a GA for which the EU contribution (calculated in accordance with Article 5.3.1) is lower than the maximum grant amount set out in Article 5.1. (In other words: a GA where the consortium declared less costs than could have been reimbursed.)  for an overspent GA: Each beneficiary’s maximum EU contribution must therefore be adjusted to bring it into line with the maximum grant amount. This adjustment is done in proportion to the eligible declared costs approved by the Commission/Agency (see the calculation in the example below). ‘Overspent GA’ means a GA for which the EU contribution calculated in accordance with Article 5.3.1 exceeds the maximum grant amount set out in Article 5.1. (In other words: a GA where the consortium declared more costs than could be reimbursed.) Step 3 — If revised final grant amount < share of the final grant amount, the Commission/Agency will recover the difference from the beneficiary. Example for calculating a recovery in an underspent GA: Action with three beneficiaries (A, B and C) and a reimbursement rate of 100 %. Maximum grant amount: EUR 500 000 Eligible costs accepted for beneficiary A at payment of the balance: EUR 150 000 (direct costs) + EUR 37 500 (25 % flat rate for indirect costs) = EUR 187 500 Eligible costs accepted for beneficiary B at payment of the balance: EUR 125 000 (direct costs) + EUR 31 250 (25 % flat rate for indirect costs) = EUR 156 250 Eligible costs accepted for beneficiary C at payment of the balance: EUR 120 000 (direct costs) + EUR 30 000 (25 % flat rate for indirect costs) = EUR 150 000 Final grant amount at payment of the balance: EUR 187 500 + EUR 156 250 + EUR 150 000 = EUR 493 750 An audit concluded that the direct costs of beneficiary A were not eligible for an amount of EUR 30 000. Revised grant amount for beneficiary A: (Revised direct costs: EUR 150 000 — EUR 30 000 = EUR 120 000) + EUR 30 000 (25 % flat rate for indirect costs) = EUR 150 000. The share of beneficiary A in the final grant amount = EUR 187 500. The EU contribution that will be recovered from beneficiary A: EUR 187 500 — EUR 150 000 = EUR 37 500. The EU contributions of the other beneficiaries remain unchanged. Example for calculating a recovery in an overspent GA: Maximum grant amount: EUR 500 000; Three beneficiaries A, B and C Estimated budget indicated in Annex 2: A: EUR 200 000; B: EUR 100 000; C: EUR 200 000 Reimbursement rate for all the beneficiaries: 100% Direct eligible costs approved for Beneficiary A at the payment of balance: EUR 160 000 (direct costs) + EUR 40 000 (indirect costs) =EUR 200 000 Direct eligible costs approved for Beneficiary B at the payment of balance: EUR 120 000 (direct costs) + EUR 30 000 (indirect costs) =EUR 150 000 H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 281 Direct eligible costs approved for Beneficiary C at the payment of balance: EUR 200 000 (direct costs) + EUR 50 000 (indirect costs) =EUR 250 000 Total eligible costs of the consortium approved by the Commission = EUR 600 000 Difference between the maximum grant amount and the approved eligible costs= EUR 600 000 - 500 000 = EUR 100 000 Limit to the maximum grant amount: Final grant amount = EUR 500 000 An audit after payment of the balance concluded that direct costs claimed by beneficiary A are not eligible for an amount of EUR 30 000. Another audit concluded that direct costs claimed by beneficiary C are not eligible for an amount of EUR 20 000. Calculation of each beneficiary's share in the final grant amount: Beneficiary approved costs multiplied by the reimbursement rate (100%) * final grant amount (500 000) EU contribution for the action according to 5.3.1 (EUR 600 000) Beneficiary A’s share in the final grant amount = (200 000/600 000) x 500 000 = EUR 166 667 Beneficiary B’s share in the final grant amount = (150 000/600 000) x 500 000 = EUR 125 000 Beneficiary C’s share in the final grant amount = (250 000/600 000) x 500 000 = EUR 208 333 Calculation of the revised grant amount after the audits: The revised final grant amount is calculated as follows: For beneficiary A: (Revised direct costs: 160 000 – 30 000 = 130 000) + 32 500 (indirect costs) = EUR 162 500 For beneficiary C: (Revised direct costs: 200 000 – 20 000 = 180 000) + 45 000 (indirect costs) = EUR 225 000 Calculation of the amount to be recovered: The amount to be recovered is calculated on the basis of the beneficiary’s share in the final grant amount and neither on the basis of the reported eligible costs nor on the basis of the amounts actually received from the coordinator. Amount to be recovered per beneficiary = share in the final grant amount - revised final grant amount For beneficiary A: EUR 166 667-162 500 = EUR 4 167 will be recovered For beneficiary C: EUR 208 333- EUR 225 000 = - EUR 16 667. Since for beneficiary C the revised final grant amount is greater than the share in the final grant amount (in other terms, the revised eligible costs still justify the share in the final grant amount), nothing will be recovered. Specific case (recoveries): International organisations — Enforceable decisions under Article 299 TFEU (and other public law decisions) will NOT be taken against international organisations, where this would be contrary to the privileges and immunities accorded by their constituent documents or international law (see Article 53.2). Offsetting is — by contrast — a measure that may be taken in relation to international organisations, however NOT as public law measure (i.e. not on the basis of Article 80(1) of the Financial Regulation No 966/2012), but as a purely contractual measure (i.e. on the basis of Article 44 of the GA). Offsetting for international organisations will therefore be subject to the contractual means for dispute settlement (i.e. arbitration; see Article 57.2). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 282 ARTICLE 45 — ADMINISTRATIVE AND FINANCIAL PENALTIES ARTICLE 45 — ADMINISTRATIVE AND FINANCIAL PENALTIES 45.1 Conditions Under Articles 109 and 131(4) of the Financial Regulation No 966/2012, the [Commission][Agency] may impose administrative and financial penalties if a beneficiary: (a) has committed substantial errors, irregularities or fraud or is in serious breach of its obligations under the Agreement or (b) has made false declarations about information required under the Agreement or for the submission of the proposal (or has not supplied such information). Each beneficiary is responsible for paying the financial penalties imposed on it. Under Article 109(3) of the Financial Regulation No 966/2012, the [Agency or the] Commission may — under certain conditions and limits — publish decisions imposing administrative or financial penalties. 45.2 Duration — Amount of penalty — Calculation Administrative penalties exclude the beneficiary from all contracts and grants financed from the EU or Euratom budget for a maximum of five years from the date the infringement is established by the [Commission][Agency]. If the beneficiary commits another infringement within five years of the date the first infringement is established, the [Commission][Agency] may extend the exclusion period up to 10 years. Financial penalties will be between 2% and 10% of the maximum EU contribution indicated, for the beneficiary concerned, in the estimated budget (see Annex 2). If the beneficiary commits another infringement within five years of the date the first infringement is established, the [Commission][Agency] may increase the rate of financial penalties to between 4% and 20%. 45.3 Procedure Before applying a penalty, the [Commission][Agency] will formally notify the beneficiary concerned: - informing it of its intention to impose a penalty, its duration or amount and the reasons why and - inviting it to submit observations within 30 days. If the [Commission][Agency] does not receive any observations or decides to impose the penalty despite of observations it has received, it will formally notify confirmation of the penalty to the beneficiary concerned and — in case of financial penalties — deduct the penalty from the payment of the balance or formally notify a debit note, specifying the amount to be recovered, the terms and the date for payment. If payment is not made by the date specified in the debit note, the [Agency or the] Commission] may recover the amount: (a) by offsetting it — without the beneficiary’s consent — against any amounts owed to the beneficiary concerned by the [Agency, the] Commission or an[other] executive agency (from the EU or Euratom budget). In exceptional circumstances, to safeguard the EU’s financial interests, the [Commission][Agency] may offset before the payment date in the debit note; H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 283 1. Administrative and financial penalties If the Commission/Agency finds (in particular, following a check, audit, review or OLAF investigation) that a beneficiary has committed substantial errors, irregularities or fraud, is in serious breach of its obligations under the GA or has made false declarations, it may impose administrative and/or financial penalties (— in proportion to the seriousness of the misconduct). The maximum penalties are as follows:  for administrative penalties: up to five years from the date on which the Commission/Agency establishes the infringement, i.e. confirms the penalty and formally notifies this to the beneficiary. If, in that time, the beneficiary commits the same infringement again (under the same GA or another EU or Euratom grant or contract), the exclusion period may be extended to 10 years.  for financial penalties: between 2% and 10% of the maximum EU contribution to the beneficiary concerned according to the estimated budget depending on the seriousness of the infringement. If, within five years of the first infringement being established, the beneficiary commits the same infringement again (under the same GA or another EU or Euratom grant or contract), the rate may be increased to between 4% and 20%. If the new infringement concerns the same GA, the rate will be increased in that GA (e.g. from 5 % to 15 %). If the infringement concerns a different GA, the new rate (e.g. 15 %) will apply in that GA and the original rate (e.g. 5 %) will be maintained in the GA concerned by the first infringement. The Commission/Agency may publish the decision to apply penalties on their websites (— together with the name of the person responsible for the misconduct, information on the misconduct and the duration of the exclusion and/or amount of the financial penalty). Financial and/or administrative penalties are public law measures (i.e. taken directly on the basis of Articles 109 and 131(4) of the Financial Regulation No 966/2012) that may be applied in addition to the contractual measures (i.e. cost rejection, grant reduction, recovery, suspension and termination), for serious misconducts (substantial errors, irregularities or fraud, serious breach of obligations or false declarations). Examples: plagiarism; absence of time recording systems (although required); false declaration concerning SME status. . (b) by taking legal action (see Article 57) or by adopting an enforceable decision under Article 299 of the Treaty on the Functioning of the EU (TFEU) [Article 106a of the Euratom Treaty] and Article 79(2) of the Financial Regulation no 966/2012. If payment is not made by the date in the debit note, the amount to be recovered (see above) will be increased by late-payment interest at the rate set out in Article 21.11, from the day following the payment date in the debit note, up to and including the date the [Agency or the] Commission receives full payment of the amount. Partial payments will be first credited against expenses, charges and late-payment interest and then against the principal. Bank charges incurred in the recovery process will be borne by the beneficiary, unless Directive 2007/64/EC applies. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 284 When deciding on publishing this information or not, the Commission/Agency will take into account, in particular:  the seriousness of the misconduct (including impact on the EU’s financial interest and image)  the time that has elapsed since it took place  the duration and recurrence of the misconduct  the intention or degree of negligence and  the measures taken by the beneficiary to remedy the situation. 2. Procedure Before applying a penalty, the Commission/Agency will follow a contradictory procedure with the beneficiary concerned (for the basic contradictory procedure, see Article 42). If the Commission/Agency confirms a financial penalty, it will issue a debit note to recover the amount The basic recovery procedure (see Article 44) applies. However, there is no:  separate contradictory procedure on recovery  intervention of the Guarantee Fund  joint and several liability of linked third parties. If the penalty is not paid by the date set out in the debit note, late-payment interest will be added to the amount to be recovered. Example for calculating a financial penalty: GA with a maximum grant amount of EUR 2 500 000. The estimated EU contribution for beneficiary A in Annex 2 is EUR 600 000. During an audit of the first reporting period, the Commission finds that beneficiary A has over-declared its personnel costs by 20 % and has falsely certified that the information on the time spent on the action set out in the report was true. Following the contradictory procedure, the Commission imposes a financial penalty of 5 % of beneficiary A’s estimated budget and asks the beneficiary to amend its practice. Financial penalty/amount to recover: 5 % of EUR 600 000 = EUR 30 000. Case 1: A year after the action ends and the balance is paid, the Commission decides to verify the situation and carries out another audit (of the same GA). It finds that beneficiary A has maintained its practice and over-declared its personnel costs also in the second and final reporting periods of that grant. Following the contradictory procedure, the Commission imposes an increased rate of 15 %. New financial penalty: 15 % of EUR 600 000 = EUR 90 000; additional amount to recover: EUR 60 000 Case 2: Six months after the first infringement was established, the Commission audits another GA of the same beneficiary, with an estimated EU contribution in Annex 2 of EUR 450 000. It finds that the beneficiary also over- declared its personnel costs in this other GA. Following the contradictory procedure, the Commission imposes an increased rate of 15 %, given that it is the beneficiary’s second infringement of the same rule under an EU contract/grant. Financial penalty in second GA: 15 % of 450 000 = EUR 67 500. Financial penalty in first GA: 5 % (no change). Additional amount to recover after the second audit: EUR 67 500 H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 285 Specific case (administrative and financial penalties): International organisations — Decisions on administrative or financial penalties (and other public law decisions) will not be taken against international organisations, where this would be contrary to the privileges and immunities accorded by their constituent documents or international law (see Article 53.2). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 286 SECTION 2 LIABILITY FOR DAMAGES ARTICLE 46 — LIABILITY FOR DAMAGES 1. Liability (of the Commission/Agency) for damages The Commission/Agency cannot be held liable for any damages where — in implementing the GA — a beneficiary:  causes damage to a third party (including another beneficiary) Example: An experiment carried out by a beneficiary in a GA which leads to an accidental escape of pollutants into the local river.  suffers damage. Example: A fire breaks out in a beneficiary’s laboratory in the course of an experiment for the GA. Subsidiary (secondary) liability is also excluded. Non-liability extends to damages caused by third party involved in the action (i.e. linked third parties, third parties providing in-kind contributions, subcontractors etc.; see Article 8). SECTION 2 LIABILITY FOR DAMAGES ARTICLE 46 — LIABILITY FOR DAMAGES 46.1 Liability of the [Commission][Agency] The [Commission][Agency] cannot be held liable for any damage caused to the beneficiaries or to third parties as a consequence of implementing the Agreement, including for gross negligence. The [Commission][Agency] cannot be held liable for any damage caused by any of the beneficiaries or third parties involved in the action, as a consequence of implementing the Agreement. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 287 46.2 Liability of the beneficiaries 46.2.1 Conditions Except in case of force majeure (see Article 51), the beneficiaries must compensate the [Commission][Agency] for any damage it sustains as a result of the implementation of the action or because the action was not implemented in full compliance with the Agreement. Each beneficiary is responsible for paying the damages claimed from it. 46.2.2 Amount of damages — Calculation The amount the [Commission][Agency] can claim from a beneficiary will correspond to the damage caused by that beneficiary. 46.2.3 Procedure Before claiming damages, the [Commission][Agency] will formally notify the beneficiary concerned: - informing it of its intention to claim damages, the amount and the reasons why and - inviting it to submit observations within 30 days. If the [Commission][Agency] does not receive any observations or decides to claim damages despite the observations it has received, it will formally notify confirmation of the claim for damages and a debit note, specifying the amount to be recovered, the terms and the date for payment. If payment is not made by the date specified in the debit note, the [Agency or the] Commission may recover the amount: (a) by offsetting it — without the beneficiary’s consent — against any amounts owed to the beneficiary concerned by the [Agency, the] Commission or an[other] executive agency (from the EU or Euratom budget). In exceptional circumstances, to safeguard the EU’s financial interests, the [Commission][Agency] may offset before the payment date in the debit note; (b) by taking legal action (see Article 57) or by adopting an enforceable decision under Article 299 of the Treaty on the Functioning of the EU (TFEU) [Article 106a of the Euratom Treaty] and Article 79(2) of the Financial Regulation No 966/2012. If payment is not made by the date in the debit note, the amount to be recovered (see above) will be increased by late-payment interest at the rate set out in Article 21.11, from the day following the payment date in the debit note, up to and including the date the [Agency or the] Commission receives full payment of the amount. Partial payments will be first credited against expenses, charges and late-payment interest and then against the principal. Bank charges incurred in the recovery process will be borne by the beneficiary, unless Directive 2007/64/EC applies. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 288 1. Liability (of the beneficiaries) for damages If a beneficiary causes damage to the Commission/Agency (in implementing the action), it must compensate the Commission/Agency (— for the amount of damage caused). Examples: Costs of legal proceedings borne by the Commission. At a meeting on Commission premises, a beneficiary smokes and causes a fire. 2. Procedure Before claiming damages, the Commission/Agency will follow a contradictory procedure with the beneficiary concerned (for the basic contradictory procedure, see Article 42). If the Commission/Agency confirms the claim, it will issue a debit note to recover the amount. The basic recovery procedure (see Article 44) applies. However, there is no:  separate contradictory procedure on recovery  intervention of the Guarantee Fund  joint and several liability of linked third parties. If the damages are not paid by the date set out in the debit note, late-payment interest will be added to the amount to be recovered. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 289 SECTION 3 SUSPENSION AND TERMINATION ARTICLE 47 — SUSPENSION OF PAYMENT DEADLINE 1. Suspension of the payment deadline (by the Commission/Agency) The Commission/Agency may ‘stop the clock’ (suspend the deadline) if a payment request cannot be immediately approved, on the grounds listed in this Article. The payment deadline (i.e. the number of days within which the Commission/Agency has to pay the consortium — after having received the payment request) depends on the type of payment (see Article 21):  for pre-financing: 30 days Suspension of the payment deadline must be distinguished from ‘suspension of payments’ (see Article 48). Suspension of the payment deadline is an ad hoc measure regarding the request for payment. Suspension of payments is a measure to avoid making payments to a beneficiary that is, for example, suspected of serious misconducts. . SECTION 3 SUSPENSION AND TERMINATION ARTICLE 47 — SUSPENSION OF PAYMENT DEADLINE 47.1 Conditions The [Commission][Agency] may — at any moment — suspend the payment deadline (see Article 21.2 to 21.4) if a request for payment (see Article 20) cannot be approved because: (a) it does not comply with the provisions of the Agreement (see Article 20); (b) the technical reports or financial reports have not been submitted or are not complete or additional information is needed, or (c) there is doubt about the eligibility of the costs declared in the financial statements and additional checks, reviews, audits or investigations are necessary. 47.2 Procedure The [Commission][Agency] will formally notify the coordinator of the suspension and the reasons why. The suspension will take effect the day notification is sent by the [Commission][Agency] (see Article 52). If the conditions for suspending the payment deadline are no longer met, the suspension will be lifted — and the remaining period will resume. If the suspension exceeds two months, the coordinator may request the [Commission][Agency] if the suspension will continue. If the payment deadline has been suspended due to the non-compliance of the technical or financial reports (see Article 20) and the revised report or statement is not submitted or was submitted but is also rejected, the [Commission][Agency] may also terminate the Agreement or the participation of the beneficiary (see Article 50.3.1(l)). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 290  for interim payments and payment of the balance: 90 days. Before paying, the Commission/Agency will:  analyse the technical reports and financial statements  check the eligibility of the claimed costs This is not an in-depth verification and can therefore not guarantee their eligibility or correctness. The costs may therefore still be rejected later on, if the Commission/Agency finds — in a more in-depth verification — that they are ineligible.  calculate the amount to be paid  approve the payment request and authorise the payment. Late payment by the Commission/Agency gives rise to late-payment interest (see Article 21.11). Grounds for suspension of the payment deadline:  Payment request does not comply with the provisions of the GA The Commission/Agency may suspend the payment deadline, if the reports (or any of their documents) do not fulfil the requirements set out in Article 20. Examples: the certificate on the financial statements does not comply with the template; inconsistencies in the technical report (meaning that the action cannot be assessed); the financial statement contains errors.  Payment request is incomplete or requires clarification The Commission/Agency may suspend the payment deadline, if the reports (or any of their documents) are incomplete or it needs additional information. Examples: the reports, the certificate on the financial statement or other supporting documents are missing; the information in the periodic technical report is incomplete; additional information on the coordinator's new bank account is needed  Doubts on the eligibility of costs in the financial statements that require additional verifications The Commission/Agency may suspend the payment deadline, if it has doubts (e.g. due to audit findings in other grants) on the eligibility of the costs in the financial statements and additional checks, reviews, audits or investigations are needed. Example: The costs claimed in the financial statements are not consistent with the action tasks described in the technical report. Suspension starts on the day the notification (announcing suspension) is sent to the coordinator (and ends on the day it is lifted). 2. Procedure The Commission/Agency will immediately formally notify the coordinator of the suspension of the payment deadline and explain the reasons why (via the electronic exchange system; see Article 52). There is NO ex ante contradictory procedure. However, if the suspension exceeds two months, the coordinator may ask the Commission/Agency if the suspension is to be continued (i.e. ask to confirm it or lift it). 3. Effects H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 291 If the issues have been resolved satisfactorily (e.g. the coordinator sent the requested information or re-submitted the report) or the Commission/Agency has finished the necessary verifications (e.g. an audit), it will lift the suspension and formally notify the coordinator. With the lifting of the suspension, the remaining payment period starts to run again. If a deadline has been suspended for several reasons, it will be lifted only when the consortium has satisfactorily addressed ALL the reasons. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 292 ARTICLE 48 — SUSPENSION OF PAYMENTS 1. Suspension of payments (by the Commission/Agency) The Commission/Agency may suspend pre-financing, interim payments or the final payment (for one or more beneficiaries), on the grounds listed in this Article. Suspension of payments has NO impact on the action implementation. The consortium must continue to work on the action, while addressing the issues that have led to suspension of the payment; costs incurred during suspension of payments are in principle eligible. . ARTICLE 48 — SUSPENSION OF PAYMENTS 48.1 Conditions The [Commission][Agency] may — at any moment — suspend, in whole or in part, the pre-financing payment and interim payments for one or more beneficiaries or the payment of the balance for all beneficiaries, if a beneficiary: (a) has committed or is suspected of having committed substantial errors, irregularities, fraud or serious breach of obligations in the award procedure or under this Agreement or (b) has committed — in other EU or Euratom grants awarded to it under similar conditions — systemic or recurrent errors, irregularities, fraud or serious breach of obligations that have a material impact on this grant (extension of findings from other grants to this grant; see Article 22.5.2). 48.2 Procedure Before suspending payments, the [Commission][Agency] will formally notify the coordinator: - informing it of its intention to suspend payments and the reasons why and - inviting it to submit observations within 30 days of receiving notification. If the [Commission][Agency] does not receive observations or decides to pursue the procedure despite the observations it has received, it will formally notify confirmation of the suspension. Otherwise, it will formally notify that the suspension procedure is not continued. The suspension will take effect the day the confirmation notification is sent by the [Commission][Agency]. If the conditions for resuming payments are met, the suspension will be lifted. The [Commission][Agency] will formally notify the coordinator. During the suspension, the periodic report(s) (see Article 20.3) must not contain any individual financial statements from the beneficiary concerned [and its linked third parties]. When the [Commission][Agency] resumes payments, the coordinator may include them in the next periodic report. The beneficiaries may suspend implementation of the action (see Article 49.1) or terminate the Agreement or the participation of the beneficiary concerned (see Article 50.1 and 50.2). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 293 Grounds for suspension of payments:  Substantial errors, irregularities, fraud or serious breach of obligations (in this grant) The Commission/Agency may suspend payments, if a beneficiary has committed or is suspected of having committed substantial errors, irregularities, fraud or serious breach of obligations (see also Article 50.3) — either during the award procedure or under the GA. Example: statements made by the beneficiary in the declaration form are found to be false.  Substantial errors, irregularities, fraud or serious breach of obligations (in other grants) The Commission/Agency may also suspend payments, if such substantial errors, irregularities, fraud or serious breach of obligations were found in other award procedures or GAs (‘extension of findings from other grants to this grant’), if  the other grants were awarded under similar conditions and  the substantial errors, irregularities, fraud or serious breach of obligations are:  systemic or recurrent and  have a material impact on this grant. Example: During an audit of other grants, the Commission detects systemic substantial errors in the calculation of personnel costs of a beneficiary participating in several H2020 actions. Since these errors stem from the beneficiary’s methodology for declaring personnel costs, they also affect this GA. For the ongoing GAs of the beneficiary, the Commission may suspend:  outstanding pre-financing and/or interim payments to the beneficiary in question  (if necessary) outstanding payment of the balance for all beneficiaries. until the beneficiary submits revised cost statements or the Commission implements the correction for extrapolation (see Article 22.5.3). Suspension starts on the day the notification (confirming suspension) is sent to the coordinator (and ends on the day it is lifted). If necessary, the consortium may decide to:  suspend action implementation (see Article 49)  terminate the GA or the participation of the beneficiary concerned (see Article 50). 2. Procedure Before suspending payments, the Commission/Agency will follow a contradictory procedure with the coordinator (for the basic contradictory procedure, see Article 42). The contradictory procedure will be made using the electronic exchange system (see Article 52). The coordinator must immediately inform the beneficiary concerned offline, via its usual communication channels (e.g. e-mail, registered letters with proof of delivery, etc.) and ask for its comments. It must also inform the other beneficiaries. If the Commission/Agency simultaneously suspends payments for a beneficiary in several actions (e.g. for errors or irregularities having a material impact on several grants), it will make a separate contradictory procedure with each coordinator individually. 3. Effects During suspension, NO individual financial statements may be submitted for the beneficiary (or beneficiaries) concerned. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 294 Costs incurred (for continuing to implement the action during suspension) are eligible and may be included in the next financial report, after suspension has been lifted. Technical reports submitted during suspension must include the work of the beneficiaries concerned. Example: 1 May: the Commission informs the coordinator of its intention to suspend interim payments for beneficiary B because an audit for other H2020 grants has detected systematic substantial errors in the calculation of its personnel costs. 15 May: the coordinator comments that beneficiary B was not aware of its obligations in this respect. 1 June: the Commission rejects the comments and confirms the suspension of payments for beneficiary B. 1 July: the coordinator submits all reports except the individual financial statement for beneficiary B (covering an amount of EUR 75 000). 10 August: the Commission pays for all beneficiaries except B. 25 October: the Commission approves remedial measures taken by beneficiary B (correcting the substantial errors and submitting revised financial statements) and lifts the suspension. The costs of beneficiary B will be submitted in the next reporting period. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 295 ARTICLE 49 — SUSPENSION OF THE ACTION IMPLEMENTATION 1. Suspension of the action implementation (by the beneficiaries) The beneficiaries may suspend the action implementation (in full or in part), on the ground set out in this Article. Ground for suspension of the action implementation (by the beneficiaries):  Action can no longer be implemented (or becomes excessively difficult). The beneficiaries may suspend the action implementation (in full or in part), if implementation becomes impossible or excessively difficult. Example: A fire devastates a beneficiary’s laboratory, with most of the technical equipment and computers used for the action and containing the research results. The beneficiaries therefore request that the part of the action that is affected by this is suspended until the laboratory is restored. Suspension starts on the day the Commission/Agency receives the notification (and ends on the resumption date specified in the amendment signed by the Commission/Agency). Suspension of the action implementation may be used exceptionally if it is necessary to stop the implementation, to fix specific problems. It should NOT be used in situations that cannot be resolved through a temporary interruption; in these cases, it may be better to terminate the GA (see Article 50). . ARTICLE 49 — SUSPENSION OF THE ACTION IMPLEMENTATION 49.1 Suspension of the action implementation, by the beneficiaries 49.1.1 Conditions The beneficiaries may suspend implementation of the action or any part of it, if exceptional circumstances — in particular force majeure (see Article 51) — make implementation impossible or excessively difficult. 49.1.2 Procedure The coordinator must immediately formally notify to the [Commission][Agency] the suspension (see Article 52), stating: - the reasons why and - the expected date of resumption. The suspension will take effect the day this notification is received by the [Commission][Agency]. Once circumstances allow for implementation to resume, the coordinator must immediately formally notify the [Commission][Agency] and request an amendment of the Agreement to set the date on which the action will be resumed, extend the duration of the action and make other changes necessary to adapt the action to the new situation (see Article 55) — unless the Agreement or the participation of a beneficiary has been terminated (see Article 50). The suspension will be lifted with effect from the resumption date set out in the amendment. This date may be before the date on which the amendment enters into force. Costs incurred during suspension of the action implementation are not eligible (see Article 6). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 296 Depending on the reasons for suspension, the beneficiaries may also have to take other measures under the GA (e.g. inform the Commission/Agency under Article 17.2; notify a situation of ‘force majeure’ under Article 51). 2. Procedure The coordinator must immediately formally notify the Commission/Agency (through the electronic exchange system; see Article 52) 3. Effects The beneficiaries must immediately take all the necessary steps to limit the damage and do their best to resume (i.e. continue) implementing the action as soon as possible. During suspension, costs incurred (for implementing the suspended part of the action) are NOT eligible (see Article 6.5). Costs may again be incurred for the action, once action implementation is resumed. If the action can be continued (resumed), the coordinator must:  immediately formally notify the Commission/Agency of the date from which the action will start again  request an amendment to the GA, to adapt it to the new situation (e.g. by extending the action’s duration, modifying Annexes 1 and 2, updating the reporting periods). The amendment must be requested in accordance with Article 55 (e.g. it must be signed by the coordinator’s LSIGN). The suspension is lifted (as from the ‘resumption date’ set out in the amendment), if the Commission/Agency approves the amendment. Example: The action was suspended on 24.03.2016. The consortium notifies the Commission that they wish to lift the suspension after 60 days, on 22.05.2016. Therefore, in accordance with Article 54 of the GA, the suspension will be lifted as from 23.05.2016. If the suspension is lifted and the action continues, the action’s remaining budget can be used for action implementation. (Although it may be that the Commission/Agency has set a lower budget in the amendment, to adapt the action to the new situation). Example: After the suspension, it is decided that not all the tasks described in Annex 1 will be implemented. If the action (or part of it) cannot be continued (or the Commission does not approve the amendment; see Article 55), the GA (or the participation of one or more beneficiaries) may be terminated. If the suspension leads to termination, NO further costs (incurred after the date of suspension) can be declared, except the costs for the reports (see Article 6.1). Example: The action starts on 1.1.2015 and is to last 36 months. The action’s implementation is suspended for four months, from the date after the Commission is notified, 1.12.2015 to 31.3.2016 and the suspension leads to the termination of the GA. The eligible costs are:  costs incurred from the action’s start (1.1.2015) until the date of notification (30.11.2015)  costs incurred for the submission of the first periodic report and the final report. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 297 1. Suspension of the action implementation (by the Commission/Agency) The Commission/Agency may suspend the action implementation (in full or in part), on the grounds listed in this Article. 49.2 Suspension of the action implementation, by the [Commission][Agency] 49.2.1 Conditions The [Commission][Agency] may suspend implementation of the action or any part of it: (a) if a beneficiary has committed or is suspected of having committed substantial errors, irregularities, fraud or serious breach of obligations in the award procedure or under this Agreement; (b) if a beneficiary has committed — in other EU or Euratom grants awarded to it under similar conditions — systemic or recurrent errors, irregularities, fraud or serious breach of obligations that have a material impact on this grant (extension of findings from other grants to this grant; see Article 22.5.2), or (c) if the action is suspected of having lost its scientific or technological relevance. 49.2.2 Procedure Before suspending implementation of the action, the [Commission][Agency] will formally notify the coordinator: - informing it of its intention to suspend the implementation and the reasons why and - inviting it to submit observations within 30 days of receiving notification. If the [Commission][Agency] does not receive observations or decides to pursue the procedure despite the observations it has received, it will formally notify confirmation of the suspension. Otherwise, it will formally notify that the procedure is not continued. The suspension will take effect five days after confirmation notification is received by the coordinator (or on a later date specified in the notification). It will be lifted if the conditions for resuming implementation of the action are met. The coordinator will be formally notified of the lifting and the Agreement will be amended to set the date on which the action will be resumed, extend the duration of the action and make other changes necessary to adapt the action to the new situation (see Article 55) — unless the Agreement has already been terminated (see Article 50). The suspension will be lifted with effect from the resumption date set out in the amendment. This date may be before the date on which the amendment enters into force. Costs incurred during suspension are not eligible (see Article 6). The beneficiaries may not claim damages due to suspension by the [Commission][Agency] (see Article 46). Suspension of the action implementation does not affect the [Commission’s][Agency’s] right to terminate the Agreement or participation of a beneficiary (see Article 50), reduce the grant or recover amounts unduly paid (see Articles 43 and 44). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 298 Grounds for suspension of the action implementation (by the Commission/Agency):  Substantial errors, irregularities, fraud or serious breach of obligations (in this grant) The Commission/Agency may suspend the action implementation, if a beneficiary has committed or is suspected of having committed substantial errors, irregularities, fraud or serious breach of obligations (see also Article 50.3) — either during the award procedure or under the GA Example: A beneficiary is suspected to have provided false documents in order to participate in the EU action.  Substantial errors, irregularities, fraud or serious breach of obligations (in other grants) The Commission/Agency may also suspend the action implementation if such substantial errors, irregularities, fraud or serious breach of obligations were found in other award procedures or GAs (‘extension of findings from other grants to this grant’), if  the other grants were awarded under similar conditions and  the substantial errors, irregularities, fraud or serious breach of obligations are:  systemic or recurrent and  have a material impact on this grant. Example: During an audit of a beneficiary participating in several H2020 actions, the Commission detected systematic substantial errors in the calculation of personnel costs (which mainly include costs of personnel employed by another company). These errors are not limited to the GA audited, but also affect all other GAs signed by the audited beneficiary. The Commission may suspend the part of the implementation of the action concerned by the audit findings (i.e. the part of the action to be implemented by the beneficiary audited) until the error is corrected for the on-going action.  Loss of scientific or technological relevance The Commission/Agency may suspend the action implementation, if it needs time to assess whether the action has lost scientific or technological relevance. This may in particular be the case:  if a complete revision of Annex 1 is necessary to assess the impact of a request for amendment  if work has significantly deviated from the original work plan  if a key beneficiary leaves the action and the consortium needs time to find a replacement  after a check, audit or review of the action. Example: There are technical problems with implementing the work under an action as described in Annex 1, so the consortium proposes changes to the work to be carried out. This may jeopardise its technological relevance and the Commission decides to suspend its implementation and to carry out a review. Suspension starts five days after it is notified to the coordinator (or on a later date specified in the notification) and ends on the resumption date specified in the amendment signed by the Commission/Agency). 2. Procedure Before suspending the action implementation, the Commission/Agency will follow a contradictory procedure (for the basic contradictory procedure, see Article 42). If possible, the Commission/Agency will give an estimation of the length of the suspension period. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 299 The contradictory procedure will be made using the electronic exchange system (see Article 52). The coordinator must inform the other beneficiaries offline, via its usual communication channels (e.g. e-mail, registered letters with proof of delivery, etc.). If the Commission/Agency simultaneously suspends a beneficiary’s participation in several actions (e.g. for irregularities having a material impact on several grants), it will make a separate contradictory procedure with each coordinator individually. 3. Effects During suspension, costs incurred (for implementing the suspended part of the action) are NOT eligible (see Article 6.5). Costs may again be declared for the action, once action implementation is resumed. If the action can be continued, the Commission/Agency will lift the suspension and formally notify the coordinator. The coordinator (or the Commission/Agency) must then request an amendment to the GA, to adapt it to the new situation (e.g. by extending the action’s duration modifying Annexes 1 and 2, updating the reporting periods). The amendment must be requested in accordance with Article 55 (e.g. it must be signed by the coordinator’s LSIGN). The suspension is lifted (as from the resumption date set out in the amendment), if the Commission/Agency approves the amendment. If the action (or part of it) cannot be continued, the GA (or the participation of a beneficiary) may be terminated. If the suspension leads to the termination, NO further costs (incurred after the date of suspension) can be declared, except the costs for the reports (see Article 6.1). Example: A key beneficiary is suspected of having declared as eligible personnel costs under the GA the costs of personnel employed by another company. The Commission suspends the implementation of the action in order to carry out checks. During that period of suspension, the beneficiary withdraws from the action. The consortium cannot find a replacement for this beneficiary and terminates the GA in accordance with Article 50.1. The GA starts on 1.5.2015 and lasts 42 months. The Commission suspends its implementation. The coordinator confirms having received notification of the suspension on 18.3.2017. The suspension takes effect on 23.3.2017. On 23.6.2017, the consortium formally notifies the termination of the GA. Only costs incurred from 1.5.2015 to 23.3.2017 and the costs of submitting the periodic report for the last reporting period and the final report are eligible. The Commission will reject the ineligible personnel costs. Ineligible costs will be rejected. The grant may be reduced, if the termination is based on substantial errors, irregularities, fraud or serious breach of obligations (for instance if the action has not been implemented properly; see Articles 5.3 and 43). In certain cases, the Commission/Agency may also impose administrative and/or financial penalties (see Article 45). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 300 ARTICLE 50 — TERMINATION OF THE AGREEMENT OR OF THE PARTICIPATION OF ONE OR MORE BENEFICIARIES 1. Termination of the GA (by the beneficiaries) The beneficiaries have the right to terminate the GA. ARTICLE 50 — TERMINATION OF THE AGREEMENT OR OF PARTICIPATION FOR ONE OR MORE BENEFICIARIES 50.1 Termination of the Agreement, by the beneficiaries 50.1.1 Conditions and procedure The beneficiaries may terminate the Agreement. The coordinator must formally notify termination to the [Commission][Agency] (see Article 52), stating: - the reasons why and - the date the termination will take effect. This date must be after the notification. If no reasons are given or if the [Commission][Agency] considers the reasons do not justify termination, the Agreement will be considered to have been ‘terminated improperly’ The termination will take effect on the day specified in the notification. 50.1.2 Effects The coordinator must — within 60 days from when termination takes effect — submit: (i) a periodic report (for the open reporting period until termination; see Article 20.3) and (ii) the final report (see Article 20.4). If the [Commission][Agency] does not receive the reports within the deadline (see above), only costs which are included in an approved periodic report will be taken into account. The [Commission][Agency] will calculate the final grant amount (see Article 5.3) and the balance (see Article 21.4) on the basis of the reports submitted. Only costs incurred until termination are eligible (see Article 6). Costs relating to contracts due for execution only after termination are not eligible. Improper termination may lead to a reduction of the grant (see Article 43). After termination, the beneficiaries’ obligations (in particular Articles 20, 22, 23, Section 3 of Chapter 4, 36, 37, 38 and 40) continue to apply. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 301 Termination may in principle be based on any ground (e.g. circumstances make its implementation impossible or excessively difficult; loss of the action’s scientific or technological relevance; force majeure). Example: The consortium decides to terminate the GA due to technical difficulties that result in the action no longer being viable. The Commission/Agency cannot oppose, but termination will be considered ‘improper’ if there are no legitimate reasons for discontinuing the action. This will be the case, for instance, if:  the implementation of the action has become impossible or excessively difficult due to the beneficiaries’ wilful misconduct or gross negligence  the reasons provided are based on changes in the strategic choices of the beneficiaries, not linked to any specific economic or operational difficulties  implementation would have been possible if the beneficiaries had made more (but still reasonable) efforts. Example: The beneficiaries decide to terminate the GA due to internal communication and decision- making problems within the consortium, and notify the Commission via the coordinator. The Commission considers that these internal problems have jeopardised the action’s implementation, but do not justify terminating the GA because they could have been solved within the consortium on the basis of the consortium agreement. This improper termination may lead to a reduction of the grant. 2. Procedure The coordinator must formally notify the Commission/Agency (directly through the Participant Portal; see Article 52) of the termination — on behalf of the beneficiaries. Best practice: Beneficiaries should contact the Commission/Agency beforehand, to discuss the termination. The notification must specify the date on which termination will take effect (‘termination date’). This date must be a date after the notification: Terminations cannot be retroactive (notably to ensure the fulfilment of obligations and deadlines arising from termination — see Point 3 Effects). 3. Effects The coordinator must — within 60 days — submit the necessary reports (i.e. a periodic report for the open reporting period until termination and the final report). Termination of the GA should be a last resort measure, if all efforts to continue the action fail. If action implementation just becomes temporarily impossible or excessively difficult, it may be better not to terminate the GA but to suspend it (see Article 49). In this case, the GA would only be terminated if it turns out later that implementation cannot be resumed anymore. Example: A fire devastates a laboratory where most of the technical equipment and computers used in the action are stored. If the beneficiaries consider that the laboratory can be replaced and the action will still be correctly implemented, they may suspend implementation and resume it when the new laboratory is operational. However, if the action has been suspended and it is not possible to find a new laboratory and therefore it is impossible to resume the action, the beneficiaries may terminate the GA. . Improper termination of the GA may lead to a reduction of the grant (see (see Articles 5.3 and 43). . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 302 The Commission/Agency will calculate the final grant amount and the payment of the balance (see Articles 5.3 and 21.4). If the total amount of earlier payments (pre-financing payment and interim payments, if any) received before termination:  is greater than the final grant amount, the balance is negative and will take the form of a recovery (see Article 21.4 and 44.1.2).  is lower than the final grant amount, the Commission/Agency will pay the balance (see Article 21.4). Only costs incurred before termination (i.e. before the termination date) are eligible — except for the:  costs for the reports (see Article 6.1) Example: The action’s duration is 36 months. The starting date is 1.1.2016. The notified termination date is 1.5.2017. Therefore, only costs incurred in connection with the action from 1.1.2016 to 1.5.2017 (16 months) and the costs related to submission of the periodic report for the last reporting period and the final report are eligible  costs for (the part of) contracts or subcontracts delivered before termination (see Article 6.1). Example: One of the beneficiaries of the GA has a contract to carry out 8 tests during the action’s duration. However, only three tests out of 8 are carried out before the GA is terminated. Therefore, only the costs related to these 3 tests carried out before termination may be eligible for the action. If the coordinator fails to submit the reports (within the 60 calendar days of the date on which termination takes effect), the costs that are not included in an approved periodic financial report will NOT be taken into account when the final grant amount is calculated. (The Commission/Agency will not send a reminder and will not extend the deadline.) Termination has no effect on the provisions that normally continue to apply after the end of the action. Obligations that continue to apply after the GA is terminated:  Keeping records and other supporting documentation (Article 18.1)  Submitting the periodic report (for the open reporting period until termination) and the final report (see Article 50.1.1 and 20)  Providing requested information and allow access to their sites and premises (for checks, reviews, audits, investigations or evaluations of the action’s impact; see Articles 22 and 23)  Complying with the rules on management of intellectual property, background and results (see Section 3 of Chapter 4 of the GA)  Maintaining confidentiality (see Article 36)  Complying with the obligations concerning security-related issues (if applicable) (see Article 37)  Promoting the action and giving visibility to the EU funding (see Article 38)  No assignment of claims for payment (see Article 40) H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 303 MULTI-BENEFICIARY: 50.2 Termination of the participation of one or more beneficiaries, by the beneficiaries 50.2.1 Conditions and procedure The participation of one or more beneficiaries may be terminated by the coordinator, on request of the beneficiary concerned or on behalf of the other beneficiaries. The coordinator must formally notify termination to the [Commission][Agency] (see Article 52) and inform the beneficiary concerned. If the coordinator’s participation is terminated without its agreement, the formal notification must be done by another beneficiary (acting on behalf of the other beneficiaries). The notification must include: - the reasons why; - the opinion of the beneficiary concerned (or proof that this opinion has been requested in writing); - the date the termination takes effect. This date must be after the notification, and - a request for amendment (see Article 55), with a proposal for reallocation of the tasks and the estimated budget of the beneficiary concerned (see Annexes 1 and 2) and, if necessary, the addition of one or more new beneficiaries (see Article 56). If termination takes effect after the period set out in Article 3, no request for amendment must be included unless the beneficiary concerned is the coordinator. In this case, the request for amendment must propose a new coordinator. If this information is not given or if the [Commission][Agency] considers that the reasons do not justify termination, the participation will be considered to have been terminated improperly. The termination will take effect on the day specified in the notification. 50.2.2 Effects The coordinator must — within 30 days from when termination takes effect — submit: (i) a report on the distribution of payments to the beneficiary concerned and (ii) if termination takes effect during the period set out in Article 3, a ‘termination report’ from the beneficiary concerned, for the open reporting period until termination, containing an overview of the progress of the work, an overview of the use of resources, the individual financial statement and, if applicable, the certificate on the financial statement (see Article 20.3 and 20.4). The information in the termination report must also be included in the periodic report for the next reporting period (see Article 20.3). If the request for amendment is rejected by the [Commission][Agency] (because it calls into question the decision awarding the grant or breaches the principle of equal treatment of applicants), the Agreement may be terminated according to Article 50.3.1(c). If the request for amendment is accepted by the [Commission][Agency], the Agreement is amended to introduce the necessary changes (see Article 55). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 304 The [Commission][Agency] will calculate — on the basis of the periodic reports, the termination report and the report on the distribution of payments — if the (pre-financing and interim) payments received by the beneficiary concerned exceed the beneficiary’s EU contribution (calculated by applying the reimbursement rate(s) to the eligible costs declared by the beneficiary [and its linked third parties] and approved by the [Commission][Agency]). Only costs incurred by the beneficiary concerned until termination takes effect are eligible (see Article 6). Costs relating to contracts due for execution only after termination are not eligible.  If the payments received exceed the amounts due: - if termination takes effect during the period set out in Article 3 and the request for amendment is accepted, the beneficiary concerned must repay to the coordinator the amount unduly received. The [Commission][Agency] will formally notify the amount unduly received and request the beneficiary concerned to repay it to the coordinator within 30 days of receiving notification. If it does not repay the coordinator, the [Commission][Agency] will draw upon the Guarantee Fund to pay the coordinator and then notify a debit note on behalf draw upon the Guarantee Fund to the beneficiary concerned (see Article 44); - in all other cases (in particular if termination takes effect after the period set out in Article 3), the [Commission][Agency] will formally notify a debit note to the beneficiary concerned. If payment is not made by the date in the debit note, the Guarantee Fund will pay to the [Commission][Agency] the amount due and the [Commission][Agency] will notify a debit note on behalf of the Guarantee Fund to the beneficiary concerned (see Article 44); - if the beneficiary concerned is the former coordinator, it must repay the new coordinator the amount unduly received, unless: - termination takes effect after an interim payment and - the former coordinator has not distributed amounts received as pre-financing or interim payments (see Article 21.7). In this case, the [Commission][Agency] will formally notify a debit note to the former coordinator. If payment is not made by the date in the debit note, the Guarantee Fund will pay to the [Commission][Agency] the amount due. The [Commission][Agency] will then pay the new coordinator and notify a debit note on behalf of the Guarantee Fund to the former coordinator (see Article 44).  If the payments received do not exceed the amounts due: amounts owed to the beneficiary concerned will be included in the next interim or final payment. If the [Commission][Agency] does not receive the termination report within the deadline (see above), only costs included in an approved periodic report will be taken into account. If the [Commission][Agency] does not receive the report on the distribution of payments within the deadline (see above), it will consider that: - the coordinator did not distribute any payment to the beneficiary concerned and that - the beneficiary concerned must not repay any amount to the coordinator. Improper termination may lead to a reduction of the grant (see Article 43) or termination of the Agreement (see Article 50). After termination, the concerned beneficiary’s obligations (in particular Articles 20, 22, 23, Section 3 of Chapter 4, 36, 37, 38 and 40) continue to apply. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 305 1. Termination of the participation of one or more beneficiaries (by the beneficiaries) The beneficiaries may terminate the participation of a beneficiary (or of several beneficiaries), if: - the beneficiary concerned requests it or - the consortium decides to terminate the beneficiary’s participation (using its internal decision-making procedures). In this case, the consortium must ask for the beneficiary’s opinion (and provide it if obtained or — if the beneficiary didn’t reply — the request to the Commission/Agency). Termination may in principle be based on any ground. If a beneficiary has good reasons, it may withdraw from the GA. If a beneficiary goes bankrupt or is wound up, it or the coordinator must inform the Commission/Agency and notify the termination of its participation — without delay. Late notification will be considered as a breach of the information obligation under the GA (see Article 17.2). Termination extends to linked third parties. Terminating a beneficiary’s participation implies that its linked third parties’ may NOT implement part of the action either. The Commission/Agency cannot oppose the termination of a beneficiary’s participation, but termination will be considered ‘improper’ if there are no legitimate reasons. 2. Procedure The coordinator must formally notify the Commission/Agency (directly through the Participant Portal; see Article 52 of the termination. At the same time, the coordinator must inform the beneficiary concerned (through the usual communication channels — in writing and offline, i.e. not via the Participant Portal). Notification can only be made by a person authorised to do so in the Participant Portal electronic exchange system (authorisation is linked certain roles (i.e. functions); see the Online Manual). Improper termination of the participation of a beneficiary may lead to the termination of the GA (see Article 50.3.1(c)) and/or to a reduction of the grant at the payment of the balance (see Articles 5.3 and 43). . MONO-BENEFICIARY: 50.2 Termination of the participation of one or more beneficiaries, by the beneficiaries Not applicable For a beneficiary involved in several EU GAs, withdrawal from one GA does not necessarily imply that it has to also withdraw from the others. . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 306 The notification must include all the information set out in this Article (including the date the termination takes effect) and a request for an amendment. NO amendment is needed, if the termination takes effect after the end of the action — unless it concerns the coordinator (since the new coordinator has many obligations also after the end of the action, e.g. submit the reports, receive the payment of the balance and distribute the payment among the beneficiaries). The amendment must be requested in accordance with Article 55. If it is accepted, the GA will be amended to introduce the necessary changes (including, if necessary, the addition of new beneficiaries). If it is rejected, the beneficiaries will have to make another proposal to the Commission/Agency. If a satisfactory solution cannot be found (i.e. the request for an amendment calls into question the decision awarding the grant or breaches the principle of the equal treatment of applicants), the GA may be terminated. Example: A key beneficiary terminates its participation in the GA. The consortium cannot find a replacement and cannot continue implementing the action without one. The notification must specify the date on which termination will take effect (‘termination date’). This date must be a date after the notification: Terminations cannot be retroactive (notably to ensure the fulfilment of obligations and deadlines arising from termination — see Point 3 Effects). 3. Effects If the GA continues (i.e. it is amended), the remaining members of the consortium (and any new beneficiaries) have the responsibility for fully implementing the action as described in Annex 1 (see Article 41.1). They must carry out the action (including the part that the defaulting beneficiary was supposed to carry out and without any additional EU contribution to do so) — unless the Commission/Agency expressly renounces it. The (new) coordinator must — within 30 days — submit the necessary reports (i.e. a report on the distribution of payments to the beneficiary concerned and a termination report). The information contained in the beneficiary’s termination report must also be included in the periodic report for the next reporting period. The Commission/Agency will calculate the amount due to the beneficiary whose participation is terminated:  if the Commission/Agency owes amounts to the beneficiary, those amounts will be paid with the following payment to the consortium (interim or final)  if the beneficiary owes amounts to the Commission/Agency, those amounts must be repaid by it. Only costs incurred before termination (i.e. before the notified date on which termination takes effect) are eligible— except for the:  costs for the termination report (see Article 6.1)  costs for (the part of) contracts or subcontracts delivered before termination (see Article 6.1). If the coordinator fails to submit the termination report (within the 30 calendar days of the date on which termination takes effect), costs that are not included in an approved periodic financial report will NOT be taken into account when the contribution is calculated. (The Commission/Agency will not send a written reminder and will not extend the deadline.) If the coordinator fails to submit the report on the distribution of payments, the beneficiary whose participation was terminated will NOT have to repay any amounts. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 307 Termination has no effect on the provisions that normally continue to apply after the end of the action (see Article 50.1). Specific cases (termination): Termination of the coordinator without its agreement — The decision to terminate the coordinator must be made by the rest of the consortium (according to its internal decision-making procedures). The notification and amendment request must be made by one of the beneficiaries (acting on behalf of the other beneficiaries). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 308 MULTI-BENEFICIARY: 50.3 Termination of the Agreement or the participation of one or more beneficiaries, by the [Commission][Agency] 50.3.1 Conditions The [Commission][Agency] may terminate the Agreement or the participation of one or more beneficiaries, if: (a) one or more beneficiaries do not accede to the Agreement (see Article 56); (b) a change to their legal, financial, technical, organisational or ownership situation [(or those of its linked third parties)] is likely to substantially affect or delay the implementation of the action or calls into question the decision to award the grant; (c) following termination of participation for one or more beneficiaries (see above), the necessary changes to the Agreement would call into question the decision awarding the grant or breach the principle of equal treatment of applicants (see Article 55); (d) implementation of the action is prevented by force majeure (see Article 51) or suspended by the coordinator (see Article 49.1) and either: (i) resumption is impossible, or (ii) the necessary changes to the Agreement would call into question the decision awarding the grant or breach the principle of equal treatment of applicants; (e) a beneficiary is declared bankrupt, being wound up, having its affairs administered by the courts, has entered into an arrangement with creditors, has suspended business activities, or is subject to any other similar proceedings or procedures under national law; (f) a beneficiary (or a natural person who has the power to represent or take decisions on its behalf) has been found guilty of professional misconduct, proven by any means; (g) a beneficiary does not comply with the applicable national law on taxes and social security; (h) the action has lost scientific or technological relevance; (i) [OPTION for joint actions (joint call with a third country or an international organisation): the third country or international organisation action (see Article 2) has not started by the date specified in Annex 1][OPTION: not applicable]; (j) [OPTION for joint actions (joint call with a third country or an international organisation): the third country or international organisation action (see Article 2) is terminated or can no longer contribute to the action][OPTION: not applicable]; (k) a beneficiary (or a natural person who has the power to represent or take decisions on its behalf) has committed fraud, corruption, or is involved in a criminal organisation, money laundering or any other illegal activity affecting the EU’s financial interests; (l) a beneficiary (or a natural person who has the power to represent or take decisions on its behalf) has — in the award procedure or under the Agreement — committed: (i) substantial errors, irregularities, fraud or (ii) serious breach of obligations, including improper implementation of the action, submission of false information, failure to provide required information, breach of ethical principles; H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 309 (m) a beneficiary has committed — in other EU or Euratom grants awarded to it under similar conditions — systemic or recurrent errors, irregularities, fraud or serious breach of obligations that have a material impact on this grant (‘extension of findings from other grants to this grant’). 50.3.2 Procedure Before terminating the Agreement or participation of one or more beneficiaries, the [Commission][Agency] will formally notify the coordinator: - informing it of its intention to terminate and the reasons why and - inviting it, within 30 days of receiving notification, to submit observations and — in case of Point (l.ii) above — to inform the [Commission][Agency] of the measures to ensure compliance with the obligations under the Agreement. If the [Commission][Agency] does not receive observations or decides to pursue the procedure despite the observations it has received, it will formally notify to the coordinator confirmation of the termination and the date it will take effect. Otherwise, it will formally notify that the procedure is not continued. The termination will take effect: - for terminations under Points (b), (c), (e), (g), (h), (j), and (l.ii) above: on the day specified in the notification of the confirmation (see above); - for terminations under Points (a), (d), (f), (i), (k), (l.i) and (m) above: on the day after the notification of the confirmation is received by the coordinator. 50.3.3 Effects (a) for termination of the Agreement: The coordinator must — within 60 days from when termination takes effect — submit: (i) a periodic report (for the last open reporting period until termination; see Article 20.3) and (ii) a final report (see Article 20.4). If the Agreement is terminated for breach of the obligation to submit the reports (see Articles 20.8 and 50.3.1(l)), the coordinator may not submit any reports after termination. If the [Commission][Agency] does not receive the reports within the deadline (see above), only costs which are included in an approved periodic report will be taken into account. The [Commission][Agency] will calculate the final grant amount (see Article 5.3) and the balance (see Article 21.4) on the basis of the reports submitted. Only costs incurred until termination takes effect are eligible (see Article 6). Costs relating to contracts due for execution only after termination are not eligible. This does not affect the [Commission’s][Agency’s] right to reduce the grant (see Article 43) or to impose administrative and financial penalties (Article 45). The beneficiaries may not claim damages due to termination by the [Commission][Agency] (see Article 46). After termination, the beneficiaries’ obligations (in particular Articles 20, 22, 23, Section 3 of Chapter 4, 36, 37, 38 and 40) continue to apply. (b) for termination of the participation of one or more beneficiaries: The coordinator must — within 60 days from when termination takes effect — submit: H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 310 (i) a report on the distribution of payments to the beneficiary concerned; (ii) a request for amendment (see Article 55), with a proposal for reallocation of the tasks and estimated budget of the beneficiary concerned (see Annexes 1 and 2) and, if necessary, the addition of one or more new beneficiaries (see Article 56). If termination is notified after the period set out in Article 3, no request for amendment must be submitted unless the beneficiary concerned is the coordinator. In this case the request for amendment must propose a new coordinator, and (iii) if termination takes effect during the period set out in Article 3, a termination report from the beneficiary concerned, for the open reporting period until termination, containing an overview of the progress of the work, an overview of the use of resources, the individual financial statement and, if applicable, the certificate on the financial statement (see Article 20). The information in the termination report must also be included in the periodic report for the next reporting period (see Article 20.3). If the request for amendment is rejected by the [Commission][Agency] (because it calls into question the decision awarding the grant or breaches the principle of equal treatment of applicants), the Agreement may be terminated according to Article 50.3.1(c). If the request for amendment is accepted by the [Commission][Agency], the Agreement is amended to introduce the necessary changes (see Article 55). The [Commission][Agency] will calculate — on the basis of the periodic reports, the termination report and the report on the distribution of payments — if the (pre-financing and interim) payments received by the beneficiary concerned exceed the beneficiary’s EU contribution (calculated by applying the reimbursement rate(s) to the eligible costs declared by the beneficiary [and its linked third parties] and approved by the [Commission][Agency]). Only costs incurred by the beneficiary concerned until termination takes effect are eligible (see Article 6). Costs relating to contracts due for execution only after termination are not eligible.  If the payments received exceed the amounts due: - if termination takes effect during the period set out in Article 3 and the request for amendment is accepted, the beneficiary concerned must repay to the coordinator the amount unduly received. The [Commission][Agency] will formally notify the amount unduly received and request the beneficiary concerned to repay it to the coordinator within 30 days of receiving notification. If it does not repay the coordinator, the [Commission][Agency] will draw upon the Guarantee Fund to pay the coordinator and then notify a debit note on behalf of the Guarantee Fund to the beneficiary concerned (see Article 44); - in all other cases, in particular if termination takes effect after the period set out in Article 3, the [Commission][Agency] will formally notify a debit note to the beneficiary concerned. If payment is not made by the date in the debit note, the Guarantee Fund will pay to the [Commission][Agency] the amount due and the [Commission][Agency] will notify a debit note on behalf of the Guarantee Fund to the beneficiary concerned (see Article 44); - if the beneficiary concerned is the former coordinator, it must repay the new coordinator the amount unduly received, unless: - termination takes effect after an interim payment and - the former coordinator has not distributed amounts received as pre-financing or interim payments (see Article 21.7) H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 311 1. Termination of the GA or of the participation for one or more beneficiaries (by the Commission/Agency) The Commission/Agency may terminate the GA or the participation of one (or more) of the beneficiaries, on the grounds listed in this Article. Grounds for termination (by the Commission/Agency):  Non-accession to the GA The Commission/Agency may terminate the GA, if one (or more) beneficiaries did not accede to the GA (i.e. did not sign the Accession Form within 30 days after the entry into force of the GA or did not provide the requested declaration on joint and several liability). Non-accession of a beneficiary does NOT automatically lead to the termination of the GA; the consortium can find an alternative solution that ensures the proper implementation of the action without the beneficiary (and request an amendment; see Article 55). In this case, the Commission/Agency will terminate the GA only if it considers the solution inappropriate or the consortium no longer complies with the eligibility criteria MONO-BENEFICIARY: 50.3 Termination of the Agreement, by the [Commission][Agency] […] In this case, the [Commission][Agency] will formally notify a debit note to the former coordinator. If payment is not made by the date in the debit note, the Guarantee Fund will pay to the [Commission][Agency] the amount due. The [Commission][Agency] will then pay the new coordinator and notify a debit note on behalf of the Guarantee Fund to the former coordinator (see Article 44).  If the payments received do not exceed the amounts due: amounts owed to the beneficiary concerned will be included in the next interim or final payment. If the [Commission][Agency] does not receive the termination report within the deadline (see above), only costs included in an approved periodic report will be taken into account. If the [Commission][Agency] does not receive the report on the distribution of payments within the deadline (see above), it will consider that: - the coordinator did not distribute any payment to the beneficiary concerned, and that - the beneficiary concerned must not repay any amount to the coordinator. After termination, the concerned beneficiary’s obligations (in particular Articles 20, 22, 23, Section 3 of Chapter 4, 36, 37, 38 and 40) continue to apply. Termination of the participation of a beneficiary may lead to termination of the GA, if the Commission/Agency considers that the GA can NOT be continued (see Article 50.3.1(c)). . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 312 set out General Annexes A and C to the Main Work Programme (e.g. the rules regarding the number of participants, their legal situation, or their place of establishment). 74 Examples: 1. Three entities from Poland, Portugal and France, are going to participate in a GA. The French beneficiary does not accede to the GA, and the other two beneficiaries fail to find a solution to this. The Commission terminates the GA because the conditions set out in the work programme/call are not met (i.e. the rule that three legal entities must take part). 2. A key beneficiary does not take part in the action after all; the assessment of the action based on the award criteria announced in the call for proposals would have had a different result.  Change in a beneficiary’s situation The Commission/Agency may terminate the participation of a beneficiary, if there was a change to its (or one of its linked third parties’) legal, financial, technical, organisational or ownership situation, that is likely to substantially affect or delay the action’s implementation or calls into question the decision to award the grant. Example: An action’s key beneficiary is taken over by a non-European company (not entitled to participate due to security reasons). This substantially affects the action’s implementation and the ownership, protection, exploitation and dissemination of the results. The Commission decides to terminate the beneficiary’s participation in the GA, or the GA if the other beneficiaries fail to find a solution to this.  GA cannot be amended after termination of a beneficiary’s participation The Commission/Agency may terminate the GA, if it cannot be amended after the termination of a beneficiary’s participation (because the necessary changes to the GA would call into question the decision awarding the grant or breach the principle of the equal treatment of applicants; see Article 55). Example: A beneficiary that has the necessary background to work on the action and owns the installations where most of the work would be implemented decides to terminate its participation. The Commission decides to terminate the GA because continuing implementing the action without this beneficiary calls into question the decision awarding the grant.  Action can no longer be implemented The Commission/Agency may terminate the GA, if action implementation is prevented by force majeure or the action implementation is suspended and resumption is not possible or the necessary amendment is not acceptable (see Articles 49 and 55). Example: A fire devastates a laboratory where most of the technical equipment and computers with the action’s research data are stored. The coordinator suspends the action’s implementation to rebuild the laboratory. The Commission carries out a review after the force majeure takes place and concludes that the consortium can no longer implement the action. It therefore decides to terminate the GA.  Bankruptcy, winding-up, administration, arrangement with creditors, suspension of business activities or other similar proceedings The Commission/Agency may terminate the participation of a beneficiary, if it is declared bankrupt, being wound up, having its affairs administered by the courts, has entered into an arrangement with creditors, has suspended business activities, or is subject to any other similar proceedings or procedures under national law (since this normally implies that the beneficiary cannot carry out the work properly). Example: A coordinator informs the Commission that a beneficiary participating in a GA is insolvent. It does not notify termination of the participation of the beneficiary because it thinks that the beneficiary may continue implementing the action. The Commission considers that the beneficiary has not sufficient means to pursue implementation and terminates the beneficiary’s participation. The beneficiaries must inform the Commission/Agency immediately of any such proceedings (see Article 17.2).  Professional misconduct The Commission/Agency may terminate the participation of a beneficiary, if it (or one of its representatives) has been found guilty of professional misconduct (proven by any means). 74 See also Article 8 of the Rules for Participation. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 313 Example: A legal entity’s participation in a GA is terminated when an investigation uncovers that it has falsified the results of clinical studies.  Non-compliance with tax or social security obligations The Commission/Agency may terminate the participation of a beneficiary, if it has not fulfilled its obligations to pay social security contributions or taxes under national law (i.e. the law of the country in which it is established and those of the country where the action is to be implemented; see Article 7). Example: A national administration notifies to the Commission/Agency that a beneficiary did not pay social security contribution for its employees. If this beneficiary cannot prove that it paid these contributions or clarify the situation within a given deadline, the Commission may terminate its participation in the GA.  Loss of scientific or technological relevance The Commission/Agency may terminate the GA, if the action has lost scientific or technological relevance. Example: A proposal on research on a new system based on recently discovered material is selected. After the action starts, a European scientific publication demonstrates that this material contains a chemical substance that irremediably harms human health. Therefore, the action cannot continue and the Commission decides to terminate the GA.  Specific grounds for joint actions For joint actions (i.e. actions funded following a joint or coordinated call with a third country or international organisation (IO); see Article 2), the Commission/Agency may terminate the GA, if:  the third country/IO action does not start by the date specified in Annex 1 In this case, NO costs incurred by the consortium will be accepted. Any pre- financing provided to the consortium must be returned to the Commission in full.  the third country/IO action is terminated  the third country/IO action can no longer contribute to the subject of the GA. Example: if the coordination agreement is not signed.  Fraud, corruption or other criminal activities The Commission/Agency may terminate the participation of a beneficiary, if it (or one of its representatives) has committed fraud, corruption, or is involved in a criminal organisation, money laundering or any other illegal activity affecting the EU’s financial interests. Example: A legal entity’s participation in several EU projects is terminated when its owner is convicted by national courts to have falsified documents to illicitly obtain European funds.  Substantial errors, irregularities, fraud or serious breach of obligations (in this grant or other grants) The Commission/Agency may terminate the GA or the participation of a beneficiary, if it (or one of its representatives) has committed — either during the award procedure or under the GA — substantial errors, irregularities, fraud or a serious breach of obligations (including improper implementation of the action, submission of false information, failure to provide required information or breach of ethical principles). An ‘irregularity’ means a violation of the applicable rules (i.e. GA or applicable international, EU or national law) that may result from an act or omission and has (or would have) a negative effect on the EU budget (through unjustified expenditure). ‘Serious breach of obligations’ may refer to any of the consortium’s or beneficiaries’ obligations under the GA. It is normally also considered an irregularity. Examples: The coordinator of the GA failed to transfer EUR 200.000 to the other beneficiaries and used these funds to pursue its own aims. The Commission therefore decides to terminate the participation of the coordinator in the GA. The beneficiaries failed to submit the reports required for the action and the request for payment within the given deadlines, despite the reminders sent by the project officer. The Agency therefore decides to terminate the GA. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 314 ‘Improper implementation of the action’ is specifically linked to the implementation of the action tasks (as described in Annex 1). Example: The Commission reviews an action and concludes that it failed to achieve its critical objectives and is absolutely not on schedule. It then requires the consortium to provide a short-term implementation plan to be carried out in the second half of the year to solve the situation. The consortium submits the short-term implementation plan. The Commission/Agency concludes that the plan provided is not acceptable and decides to terminate the GA. Submission of false information Example: The Commission may decide to terminate a beneficiary’s participation if an audit reveals that the beneficiary declared costs in its financial statement that did not correspond to the services rendered and they were based on fake invoices. ‘Failure to provide required information’ normally happens if a beneficiary refuses — in the context of a check, review, audit or investigation (see Article 22) — to provide the requested information or allow access to its premises. Example: The Commission decides to carry an on-the-spot audit of a beneficiary that is participating in a GA. It requests the beneficiary to provide certain information, including its accounts. The beneficiary refuses to provide this information. After this refusal, the Commission may in writing request this information within a given deadline. If it does this and the beneficiary again fails to provide the information required, the Commission may terminate the beneficiary’s participation in the GA. ‘Breach of ethical principles’ means breach of the obligations under Article 34.1 and 34.3 or of the ethics requirements set out in Annex 1 (see Article 34.2). Example: The Agency decides to terminate a GA after discovering that the scientific reports submitted by the consortium were almost entirely copied from the web (plagiarism). The Commission/Agency may also terminate the GA or the participation of the concerned beneficiary, if such substantial errors, irregularities, fraud or serious breach of obligations were found in other award procedures or GAs (‘extension of findings from other grants to this grant’), if:  the other grants were awarded under similar conditions and  the substantial errors, irregularities, fraud or serious breach of obligations are:  systemic or recurrent and,  have a material impact on this grant. Before terminating (the GA or the participation of a beneficiary), the Commission/Agency may first suspend the action implementation (see Article 49.2) to try to fix the problems and re-establish compliance with the GA. In this case, it will only terminate (the GA or a beneficiary) if the action cannot be resumed. 2. Procedure Before terminating a GA or the participation of one or more beneficiaries, the Commission/Agency will follow a contradictory procedure (for the basic contradictory procedure, see Article 42). The contradictory procedure will be made using the Participant Portal (see Article 52). The coordinator must immediately inform the beneficiaries concerned offline, via its usual communication channels (e.g. e-mail, registered letters with proof of delivery, etc.) and ask for their comments. It must also inform the other beneficiaries. If the Commission/Agency simultaneously terminates a beneficiary’s participation in several actions (e.g. for irregularities having a material impact on several grants), it will make a separate contradictory procedure with each coordinator individually. If a beneficiary’s participation is terminated on the basis of Article 50.3.1(e) (i.e. bankruptcy, winding-up, administration, etc.), the Commission/Agency will also contact the liquidator/administrator. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 315 If it confirms termination, the Commission/Agency will specify the date on which termination will take effect. This date will be a date after the notification: Terminations can NOT be retroactive (notably to ensure the fulfilment of obligations and deadlines arising from termination — see Point 3 Effects). For some cases, the Commission/Agency may choose a future date (in order to give the beneficiaries the possibility to close the action). For the other cases (e.g. termination under points (a), (d), (f), (i), (k), (l.i) and (m)), the termination will take effect immediately, i.e. on the day after the coordinator receives the notification of the confirmation (see Article 50.3.2). 3. Effects The effects of terminating the GA are the same as when the beneficiaries terminate the GA (see Article 50.1.2). Only costs incurred before termination (i.e. before the date on which termination takes effect) are eligible. Costs relating to contracts due for execution only after termination are not eligible. Ineligible costs will be rejected. The grant may be reduced, if the termination is based on substantial errors, irregularities, fraud or serious breach of obligations (for instance if the action has not been implemented properly; see Articles 5.3 and 43). In certain cases, the Commission/Agency may also impose administrative and/or financial penalties (see Article 45). The effects of terminating the participation of one (or more) of the beneficiaries are the same as when the beneficiaries terminate the participation of another beneficiary (see Article 50.2.2). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 316 SECTION 4 FORCE MAJEURE ARTICLE 51 — FORCE MAJEURE 1. Force majeure What? In case of force majeure, a party will be excused from not fulfilling its obligations (i.e. there will be no breach of obligations under the GA and none of the adverse measures for breach of contract will be applied). ‘Force majeure’ relates to an extraordinary event or situation that is beyond the party’s control and that prevents it from fulfilling its obligations under the GA. Examples (force majeure): An earthquake, terrorist attack or volcanic eruption; delay in delivering equipment due to floods in the region/country. Examples (not force majeure): machine malfunctions, robberies; a subcontractor building a test site went bankrupt. SECTION 4 FORCE MAJEURE ARTICLE 51 — FORCE MAJEURE 51.1 Force majeure ‘Force majeure’ means any situation or event that: - prevents either party from fulfilling their obligations under the Agreement, - was unforeseeable, exceptional situation and beyond the parties’ control, - was not due to error or negligence on their part (or on the part of third parties involved in the action), and - proves to be inevitable in spite of exercising all due diligence. The following cannot be invoked as force majeure: - any default of a service, defect in equipment or material or delays in making them available, unless they stem directly from a relevant case of force majeure, - labour disputes or strikes, or - financial difficulties. Any situation constituting force majeure must be formally notified to the other party without delay, stating the nature, likely duration and foreseeable effects. The parties must immediately take all the necessary steps to limit any damage due to force majeure and do their best to resume implementation of the action as soon as possible. The party prevented by force majeure from fulfilling its obligations under the Agreement cannot be considered in breach of them. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 317 The event or situation must be inevitable (despite the beneficiary’s due diligence, i.e. level of care that can reasonably be expected from a beneficiary, in order to ensure the fulfilment of its obligations under the GA) and unforeseeable. Force majeure can NOT be used to justify situations caused by a beneficiary’s negligence or by events that could reasonably have been anticipated. The following cases are explicitly NOT considered force majeure:  default of a service, defect in equipment or material or delays in making them available — unless they stem directly from a relevant case of force majeure  labour disputes or strikes  financial difficulties. Force majeure normally has no specific effects on the eligibility of costs. Costs are eligible, if they fulfil the conditions set out in Article 6 — like any other costs incurred under the action. However, if force majeure entails extra costs for the implementation of the action, it will normally be the beneficiaries that must bear them (since they were not budgeted and the maximum grant amount set out in Article 5.1 cannot be increased). Example: Airline tickets bought for a beneficiary to attend a meeting related to the action. The flight is cancelled due to a volcano eruption, making it impossible for the beneficiary to travel to the meeting. If the ticket costs fulfil the eligibility conditions set out under Article 6 of the GA, they are eligible, even if the beneficiary did not travel and did not take part in the meeting. New in Horizon 2020: This is different from FP7, where only costs for tasks that had actually been executed up to the date of the force majeure were eligible. Force majeure may lead to suspension of the action implementation (see Article 49) or termination of the GA (see Article 50). How? The party concerned by force majeure must immediately formally notify the other party (via the coordinator, via the Participant Portal, see Article 52). The coordinator must inform the other beneficiaries offline. The party concerned must quickly put in place all possible measures to limit the damage caused by the force majeure, including measures to limit related costs. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 318 CHAPTER 7 FINAL PROVISIONS ARTICLE 52 — COMMUNICATION BETWEEN THE PARTIES CHAPTER 7 FINAL PROVISIONS ARTICLE 52 — COMMUNICATION BETWEEN THE PARTIES 52.1 Form and means of communication Communication under the Agreement (information, requests, submissions, ‘formal notifications’, etc.) must: - be made in writing and - bear the number of the Agreement. Until the payment of the balance: all communication must be made through the electronic exchange system and using the forms and templates provided there. After the payment of the balance: formal notifications must be made by registered post with proof of delivery (‘formal notification on paper’). Communications in the electronic exchange system must be made by persons authorised according to the ‘Terms and Conditions of Use of the electronic exchange system’. For naming the authorised persons, each beneficiary must have designated — before the signature of this Agreement — a ‘Legal Entity Appointed Representative (LEAR)’. The role and tasks of the LEAR are stipulated in his/her appointment letter (see Terms and Conditions of Use of the electronic exchange system). If the electronic exchange system is temporarily unavailable, instructions will be given on the [the Agency and] Commission websites. 52.2 Date of communication Communications are considered to have been made when they are sent by the sending party (i.e. on the date and time they are sent through the electronic exchange system). Formal notifications through the electronic exchange system are considered to have been made when they are received by the receiving party (i.e. on the date and time of acceptance by the receiving party, as indicated by the time stamp). A formal notification that has not been accepted within 10 days after sending is considered to have been accepted. Formal notifications on paper sent by registered post with proof of delivery (only after the payment of the balance) are considered to have been made on either: - the delivery date registered by the postal service or - the deadline for collection at the post office. If the electronic exchange system is temporarily unavailable, the sending party cannot be considered in breach of its obligation to send a communication within a specified deadline. 52.3 Addresses for communication The electronic exchange system must be accessed via the following URL: [insert URL] The [Commission][Agency] will formally notify the coordinator and beneficiaries in advance any changes to this URL. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 319 1. Communication between the parties — Participant Portal electronic exchange system All communication between the consortium and the Commission/Agency (except for formal notifications after payment of the balance) must be in electronic form via the Participant Portal electronic exchange system. This system offers different functions:  viewing and changing the legal entity data in the Beneficiary Register  direct access to the necessary forms and electronic submission for reporting, deliverables and amendments  contacting the Commission/Agency, via the messages function  formal notifications (i.e. when the GA refers to ‘formal notifications’ or ‘formally notify’), via the formal notifications function  where necessary, secured electronic signatures (for instance, for signing the GA, accession to the GA, amendments and financial statements). It keeps logs of all communication and allows for delivery of formal notifications with proof of receipt. All messages are recorded in the project file (with date and time). Formal notifications are also recorded via the formal notifications function (with information on when they were sent and received, i.e. date and time the receiving party first accessed the notification, as indicated by the time stamp). Access is limited to persons with a user account and authorisation to act for the beneficiary. Authorisation is linked to the ‘role’ that is attributed to the person (each beneficiary’s LEAR does this for the people authorised to sign grant agreements and amendments (LSIGNs) or financial statements (FSIGNs)). Only persons who have been assigned one of these roles can use the electronic exchange system (see the Online Manual). Formal notifications on paper (only after the payment of the balance) addressed to the [Commission][Agency] must be sent to the following address: [European Commission][name of the Agency] [Directorate-General][Department] [complete] [Directorate [complete]] Unit [complete] [Post code, town and country] Formal notifications on paper (only after the payment of the balance) addressed to the beneficiaries must be sent to their legal address as specified in the 'Beneficiary Register'. A formal notification is considered to have been accepted ten days after it is sent (— even if it has not been opened by recipient, e.g. refusal of reception or omission). Deadlines that are counted from the date of receipt are counted as of day eleven. . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 320 Examples: 1. Only Legal Signatories (PLSIGNs) may sign the GA and amendments. 2. Only Financial Statement Signatories (PFSIGNs) may sign the financial statements. 3. Only Primary Coordinator Contacts (PCoCos) and Coordinator Contacts (CoCo) may submit information to the Commission. The Primary Coordinator Contact can be changed only by the responsible (project) officer in the back-office, while the other roles can be managed by the participants themselves via the Portal. (In case of MSCA-IF the Supervisor identified in the proposal becomes the PCoCo, in ERC grants the PI identified in the proposal becomes the PCoCo.) 4. Only Participant Contacts (PaCos) may submit information to the coordinator (information that must be submitted via the Participant Portal). They cannot submit information directly to the Commission. 5. Only the Participant Contact(s) (PaCo, or PCoCo and CoCo(s) in case of the coordinator), Legal Signatory (PLSIGN) or Financial Signatory (PFSIGN) of the recipient beneficiary may access a formal notification for the first time (i.e. may formally receive it). 6. Task Managers (TaMa) may only complete and save web forms and upload documents related to their organisation’s participation in the grant. They cannot submit information to the coordinator or the Commission. 7. Team Members (TeMe) have read-only access to project information. They cannot complete or save forms, nor submit information to the coordinator or the Commission. In principle, all communications from/to the Commission/Agency must go via the coordinator — unless the GA or other rules provide for direct communication with the other beneficiaries (e.g. Articles 20, 22, 23, 30, 41, 55; OLAF Regulations). For more information on access and roles in the Participant Portal electronic exchange system, see the Online Manual. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 321 ARTICLE 53 — INTERPRETATION OF THE AGREEMENT 1. Privileges and immunities The Commission/Agency will not take measures against international organisations which would be contrary to the privileges and immunities accorded by their constituent documents or international law. ‘International organisation’ means an intergovernmental organisation (other than the EU) with legal personality under international public law (including specialised agencies set up by international organisations). Examples: International Committee of the Red Cross (ICRC); International Federation of National Red Cross and Red Crescent Societies Thus in most cases (that is to say, unless the relevant legal texts provide otherwise), public law decisions cannot be applied; only contractual measures will be taken. Therefore, the Commission/Agency will not apply enforceable decisions under Article 299 TFEU (see Article 44) or decisions on administrative or financial penalties (see Article 45). Similarly, offsetting will be applied only as a contractual measure on the basis of Article 44 GA (— never as a public law measure directly on the basis of Article 80(1) of the Financial Regulation No 966/2012). By consequence, dispute settlement is normally limited to arbitration (see Article 57.2). The public law remedies (i.e. Article 263 action) do not apply. ARTICLE 53 — INTERPRETATION OF THE AGREEMENT 53.1 Precedence of the Terms and Conditions over the Annexes The provisions in the Terms and Conditions of the Agreement take precedence over its Annexes. Annex 2 takes precedence over Annex 1. 53.2 Privileges and immunities [OPTION for all international organisations: Nothing in the Agreement may be interpreted as a waiver of any privileges or immunities accorded to the [insert name of international organisation(s)] by its constituent documents or international law.] [OPTION: Not applicable] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 322 ARTICLE 54 — CALCULATION OF PERIODS, DATES AND DEADLINES 1. Periods expressed in days A period expressed in days starts on the day following the triggering event and ends at midnight of the last day of the period. Days are calendar days. Example: Under Article 20.3, the coordinator must submit a periodic report within 60 days following the end of each reporting period. The action is divided into the following reporting periods: RP1: from 1 March 2015 to 31 August 2016 RP2: from 1 September 2016 to 28 February 2017 Therefore, the deadline of 60 days for the first periodic report starts on 1 September 2016 and ends on 30 October 2016. The deadline of 60 days for the second and last periodic report starts on 1 March 2017 and ends on 29 of April 2017. 2. Periods expressed in months or years Periods expressed in months or years end at midnight on the day with the same date as the day on which the period started, in the last month or year of the period. Example: Under Article 47, the Commission/Agency may suspend the payment deadline if a request for payment cannot be approved. The suspension takes effect on the day the Commission/Agency sends the notification. When the suspension exceeds two months, the coordinator may ask the Commission/Agency if it will continue. The Commission sent the notification for a grant payment deadline on 31 July 2016. Therefore, the suspension will have exceeded two months on 30 September 2016. If that day does not exist (e.g. 31 of April), the period ends at midnight of the last day of that month (e.g. 30 of April). Example: Under Article 22.1.2, reviews may be started up to two years after the balance is paid. A grant’s balance is paid on 29 February 2016. Therefore, the two-year period starts on 1 March 2016 and ends on 1 March 2018. ARTICLE 54 — CALCULATION OF PERIODS, DATES AND DEADLINES In accordance with Regulation No 1182/71 52 , periods expressed in days, months or years are calculated from the moment the triggering event occurs. The day during which that event occurs is not considered as falling within the period. 52 Regulation (EEC, Euratom) No 1182/71 of the Council of 3 June 1971 determining the rules applicable to periods, dates and time-limits (OJ L124, 8.6.1971, p.1) H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 323 ARTICLE 55 — AMENDMENTS TO THE AGREEMENT 1. Amendments When & What? An amendment is necessary whenever there is a need to change the GA (i.e. its ‘Terms and Conditions’ and/or the Annexes). ARTICLE 55 — AMENDMENTS TO THE AGREEMENT 55.1 Conditions The Agreement may be amended, unless the amendment entails changes to the Agreement which would call into question the decision awarding the grant or breach the principle of equal treatment of applicants. Amendments may be requested by any of the parties. 55.2 Procedure The party requesting an amendment must submit a request for amendment signed in the electronic exchange system (see Article 52). The coordinator submits and receives requests for amendment on behalf of the beneficiaries (see Annex 3). If a change of coordinator is requested without its agreement, the submission must be done by another beneficiary (acting on behalf of the other beneficiaries). The notification must include: - the reasons why; - the appropriate supporting documents; and - for a change of coordinator without its agreement: the opinion of the coordinator (or proof that this opinion has been requested in writing). The [Commission][Agency] may request additional information. If the party receiving the request agrees, it must sign the amendment in the electronic exchange system within 45 days of receiving notification (or any additional information the [Commission][Agency] has requested). If it does not agree, it must formally notify its disagreement within the same deadline. The deadline may be extended, if necessary for the assessment of the request. If no notification is received within the deadline, the request is considered to have been rejected. An amendment enters into force on the day of the signature by the receiving party. An amendment takes effect on the date agreed by the parties or, in the absence of such an agreement, on the date on which the amendment enters into force. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 324 Normally amendments are done at the initiative of the consortium, but they may also be proposed by the Commission/Agency (e.g. where errors need to be corrected; to change Annex 1 after a review of the action, etc.). The amended provisions become an integral part of the GA; all other provisions remain unchanged and continue to have full effect. The general terms and conditions of the GA can NOT be changed via an amendment. Only GA-specific data (e.g. duration of the reporting periods, starting date, etc.) and the options in the GA can be added, removed or updated via an amendment. Examples: 1. If the JRC should have been a beneficiary but then does not accede to the GA, the options related to the JRC will be removed. 2. If the JRC is added as a beneficiary during the action, the GA options related to the JRC will be added to the GA. 3. If a linked third party ends its participation, the option in Article 14.1 will be updated to fix its ‘end date’. Amendments may NOT result in changes that — if known before awarding the grant — would have had an impact on the award decision. Those are mostly changes that:  involve the consortium composition and with an impact on the eligibility criteria set out in General Annexes A and C to the Main Work Programme (e.g. consortium of three entities established in three different Member States (BG, PL and FR) and replacement of the PL beneficiary by a BG beneficiary while the call required the representation in the consortium of at least three Member States)  involve changes to the action and/or its budget and affect the award criteria announced in the work programme/call (e.g. the tasks in Annex 1 are changed so substantially that the action no longer corresponds to the scope of the call)  breach the principle of equal treatment of applicants  do not comply with the rules applicable to the GA (i.e. Financial Regulation No 966/2012, Rules for Participation Regulation No 1290/2013, etc.) or with provisions of the GA itself (e.g. amendment to subcontract tasks of the coordinator). Changes in the name, address, legal form and organisation type AND changes in the legal, financial, technical, organisational or ownership situation may or may not require an amendment (see below) — but they ALL trigger the information obligation under Article 17.2. If such changes affect the implementation of the action and require an amendment, the Commission/Agency will examine the situation and inform the coordinator. Examples (change that requires an amendment): 1. Beneficiary A becomes bankrupt. It will be necessary to amend the GA to terminate its participation 2. Beneficiary B moves from Europe to Australia during grant implementation. If the change of address implies that the beneficiary becomes not eligible for EU funding, then it will be necessary to amend the GA to make it a ‘beneficiary not receiving EU funding’ 3. Beneficiary C participates in an innovation action and loses its non-profit status during grant implementation. It will be necessary to amend the GA to change the reimbursement rate. Examples (change that does NOT require an amendment): 1. Beneficiary D changes its name. The update in the Beneficiary Register is sufficient; no amendment is needed. 2. Beneficiary E moves from Australia to Europe during grant implementation. This change of address has no effect on eligibility, because beneficiary/linked third party that was ineligible for receiving EU funding at the moment of grant signature, can NOT become eligible later on. 3. Beneficiary F participates in an SME instrument action and loses its SME-status during grant implementation. No amendment is needed because there is an explicit exception in Article 53(2) of the Rules for Participation Regulation No 1290/2013. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 325 Sample list of cases where an amendment is necessary:  Removal of a beneficiary whose participation is terminated (see Article 50.2 and 50.3). There are two main cases for removing a beneficiary:  if it never became beneficiary (because of non-accession to the GA or non-provision of the requested declaration on joint and several liability). In this case, the amendment will be triggered by the Commission/Agency and the beneficiary is removed from the beginning (since it has never been a beneficiary).  for other reasons set out in Article 50. The amendment may be triggered by the beneficiaries or by the Commission/Agency. For termination by the beneficiaries:  the request for amendment must be part of the notification of termination  it has to include the opinion of the beneficiary whose participation is terminated (or proof that its opinion has been requested in writing). For termination by the Commission/Agency:  there has to be a contradictory procedure (see Article 50.3.2)  after termination, the coordinator must submit (within 60 days from the termination date) the amendment request with all the supporting documents (see Article 50.3.3). There is NO need to request an amendment if termination takes effect after the end of the action (see Article 3) — unless the beneficiary concerned is the coordinator and the amendment is necessary to comply with the obligation to submit the reports and distribute the payments. If the coordinator is removed, the amendment has to propose a new coordinator. The ‘termination date’ will be added to the Preamble and the beneficiary will be entitled to submit costs until that date. For termination by the beneficiaries: the ‘termination date’ must be specified in the notification. The beneficiaries must select the date in the notification template. It must be either a fixed date or ‘the day after notification of termination’. The fixed date must be in the future (i.e. after notification: terminations can NOT be retroactive notably to ensure the fulfilment of obligations and deadlines arising from termination; see Article 50.2.1) For termination by the Commission/Agency: the ‘termination date’ will be either:  the date specified in notification confirming termination or  the day after the coordinator receives the notification confirming termination. Combination with other changes: If the beneficiary was participating with linked third parties, they will also have to be removed (with effect from the same date) and the ‘end date of participation’ will be added to Article 14. The termination will normally also imply a change of Annexes 1 and 2. By contrast, the GA options for the beneficiary (and its linked third parties) will NOT be deleted or become not applicable (since they were part of the GA and (many) obligations continue to apply after termination).  Adding a new beneficiary (see Article 56.2) The new beneficiary must first register (and get validated) in the Beneficiary Register — unless it already has a validated ‘participant identification code (PIC),’ The request for amendment must include;  Annex 3 (Accession Form) — signed by the new beneficiary in the Participant Portal (see Article 52) before submitting the amendment request H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 326  a PDF copy of the signed Annex 3a (declaration of joint and several liability of its linked third parties if requested by the Commission/Agency)  Annex 3b (Administrative Arrangement signed by the Joint Research Center (JRC), if applicable). The ‘accession date’ will be added to the Preamble of the GA and the beneficiary will be entitled to submit costs as from that date. The new beneficiary must select the date in the Accession Form (attached to the amendment request). It must be either:  ‘the date of signature of the Accession Form’  ‘the date of entry into force of the amendment’ OR  a fixed date:  either a retroactive date (i.e. before signature of the Accession Form) OR  a future date (i.e. after signature of the Accession Form — this should be an exceptional case with a justification). If new beneficiaries join the action to replace a beneficiary that leaves, they may set the accession date before the termination date (of the beneficiary that is replaced) — and thus both incur costs for a certain period. Example: The former beneficiary ends its participation on 1.6.2015, and the new beneficiary accedes to the GA on 1.5.2015. Combination with other changes: The addition will also imply a change of Annexes 1 and 2 and — depending on the type of beneficiary and its H2020 status(es) — GA options will be added. Examples: If the new beneficiary is an international organisation, the options for international organisations under Articles 22.4 and 53.2 will be added to the GA and the options under Articles 57.1 and 57.2 will be added if applicable to that international organisation. For the JRC, the options in the Preamble, Article 20.3(b)(iii) and Article 21.2 will be added.  Change of beneficiary due to partial takeover (called ‘partial transfer of rights and obligations’ in FP7) What? ‘Partial takeover’ means that a PART of the business of the beneficiary (including the GA) is taken over by (one or more) other entity(ies) (‘transfer of a business unit as a going concern’, e.g. partial acquisition, distribution of a business unit on dissolution/liquidation, division/demerger, etc.). ‘Partial acquisition’ means that the original entity continues to exist, but that a new entity purchases a department, business unit, or similar (and absorb or take over part of the rights and obligations of the original entity). Thus, some of the rights and obligations (and contracts) of the original entity are transferred to the new entity (i.e. a partial transfer of the rights and obligations of the original entity). Since the beneficiary continues to exist as a legal entity and only some of its rights and obligations are affected, a case-by-case analysis is needed (and an amendment therefore necessary). Example: Company X sells its mobile phone division to company Z; all GAs where the mobile phone division of X was involved will be affected by the transfer of rights and obligations; other GAs where other divisions of company X work will not be affected. The rights and obligations under the GA are transferred from the beneficiary to a new beneficiary — without passing via ‘termination’ (Article 50) or ‘addition of a new beneficiary’ (Article 56). This amendment type should, however, NOT be used if the former beneficiary does NOT leave the consortium (but stays on as part of the consortium). In this case, simply use the amendment type for ‘addition of a beneficiary’. . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 327 ‘Distribution of a business unit on dissolution/liquidation’ means that the original entity disappears (due to dissolution or liquidation), but that (one or more) new entity(ies) purchase(s) a department, business unit or similar (and absorb or take over part of the rights and obligations of the original entity). Since only some of the beneficiary’s rights and obligations are transferred, a case-by-case analysis is needed (and an amendment therefore necessary). ‘Division/demerger’ means that the original entity disappears and several entities replace it; different parts of the original entity are transferred to the new entities (i.e. several partial transfers to different entities). Examples: 1. Company X has several ongoing grants. Company X is bought by two other companies (Y & Z), one of which will absorb the mobile phone division and the other the remaining divisions. For some GAs there will be a transfer of rights and obligations from X to Y, for other GAs it will be from X to Z. 2. Company Ω has one ongoing grant (covering some action tasks to be implemented by its engineering division and some action tasks to be implemented by other divisions). Company Ω is bought by two other companies (E and O), one of which absorbs the engineering division and the other the remaining divisions. There are two ‘partial takeovers’: one to company E and one to company O. What not? Simple sale of (one or more) assets of the beneficiary is NOT a ‘partial takeover’; it does not involve the transfer of the GA, but — at most — a transfer of (some) action tasks if the beneficiary can no longer fulfil its action tasks. (In this latter case, also the sale of assets will require an amendment, in order to terminate participation of the beneficiary and/or add a new beneficiary). Example: Company Ω implementing two different tasks in an action (engineering and testing) sells the engineering department to company E with the understanding that E will implement the engineering tasks of Ω in the action. The GA will have to be amended to add company E as a new beneficiary; company Ω remains beneficiary in the GA for the other action tasks (e.g. testing). (If company E is already a beneficiary in the GA, the GA must be amended only to modify Annexes 1 and 2 to adjust the action tasks and the budget; it is not be necessary to add E as new beneficiary). Best practice: In case of doubt, the beneficiaries should contact the Commission/Agency (via the Participant Portal messages function). NO amendment is necessary for ‘universal takeovers’ (see below). How? The coordinator must request an amendment; if the Commission/Agency agrees, the new entity will replace the original entity as party to the GA (as ‘new beneficiary’). ‘New beneficiary’ is used here only for the purpose of the amendment; it may mean either a new beneficiary joining the consortium or an already existing beneficiary who took over a part of the business of another beneficiary. If the partial takeover is governed by national law, the amendment request must clearly set out the legal situation and the consequences for the GA (both towards the Commission/Agency and towards the other beneficiaries). It must, in particular, explain the financial liability of the former beneficiary, attach a copy of the takeover contract and cite the applicable rules (with hyperlinks to the texts, if possible). (Any elements that are not explained in the amendment request may not afterwards be held against the Commission/Agency.) The ‘transfer date’ will be added to the Preamble of the GA. The beneficiaries must select the date in their amendment request. (If the new beneficiary joins the action, the transfer date must be the same date as the accession date. Retroactive dates are only allowed in exceptional cases and with specific justification.) The new beneficiary(ies) will (each) be fully jointly and severally liable with the former beneficiary for recoveries under Article 44. (By contrast: No joint and several liability for debts linked to financial penalties and damages under Articles 45 and Article 46.) . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 328 If the new beneficiary joins the GA, it must first register (and get validated) in the Beneficiary Register — unless it already has a validated 'participant identification code' (PIC).  Adding or removing a linked third party (see Article 14) Although they are not beneficiaries, the change of a linked third party (i.e. if it ends its participation or joins the action) also requires an amendment — to update Article 14 (to state/remove their name and to fix their starting/end date). For adding linked third parties: The new linked third party must first be registered (and validated) in the Beneficiary Register — unless it already has a validated ‘participant identification code (PIC)’. The ‘starting date of participation’ will be added to Article 14. The beneficiaries must select the date in the amendment request. It must be either a fixed date or ‘the date of entry into force of the amendment’. If the linked third party joins the action at the same time as the beneficiary, the starting date of participation must be the same date as the accession date of the beneficiary. For removal of linked third parties: Beneficiaries can remove a linked third party via the amendment request to the Commission/Agency (because termination of participation does not apply to linked third parties; it applies only to beneficiaries; see Article 50.2) If the Commission/Agency considers that the participation of a linked third party must be ended (e.g. because of audit results or an OLAF investigation), it will ask the consortium to remove the linked third party (via an amendment request). The ‘end date of participation’ will be added to Article 14. The beneficiaries must select the date in the amendment request. It must be either a fixed date or ‘the day after the submission of the amendment request’. The fixed date must be in the future (i.e. after the request: end of participation can NOT be retroactive).  Change concerning a beneficiary/linked third party ‘not receiving EU funding’ If a beneficiary/linked third party — exceptionally — becomes not eligible for receiving EU funding during action implementation (e.g. due to a change of establishment), this change will require an amendment (to change Annex 2 and the options in Article 9). Example: Beneficiary R moves from Europe to Australia. If the change of address implies that the beneficiary is not going to be anymore eligible for EU funding, then it may be necessary to amend the GAs in which it participates. By contrast, beneficiaries/linked third parties cannot become eligible during action implementation. If a beneficiary/linked third party was ineligible for receiving EU funding at the moment of grant signature, this will not change during the action implementation. New association agreements (between the EU and third countries) do NOT have an impact on ongoing grants.  Change of coordinator If the new coordinator is not a beneficiary of the GA, it must first accede to the GA as a new beneficiary (see Article 56.2). The former coordinator may continue to participate in the action as a beneficiary or may terminate its participation. If the consortium does not follow-up this request, the Commission/Agency may terminate the participation of the beneficiary (and thus automatically also remove the linked third party). The rights and obligations u der the GA are transferred from the beneficiary to a new beneficiary — without passing via ‘termination’ (Article 50) or ‘addition of a new beneficiary’ (Article 56). . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 329 An amendment to change the coordinator remains possible (and necessary) after the end of the action (see Article 3). The ‘handover date’ will be added to the Preamble of the GA. The beneficiaries must select the date in the amendment request. (If the former coordinator leaves the consortium, this date must be after the ‘termination date’; if the new coordinator joins the consortium, the date must be after the ‘accession date’). Otherwise, it will be the date the amendment enters into force (i.e. date of the last signature of the amendment).  Change of the option for ‘authorisation to administer’ The option in Article 41.2 can be added/deleted or changed (e.g. change of name of the entity with ‘authorisation to administer’').  Change of the coordinator’s bank account for payments An amendment is necessary for all changes that imply a change to the account number/IBAN code. Example: The coordinator changes bank account. The bank account data must first be updated in the Beneficiary Register (and be validated). NO amendment is necessary for a change of the name of the bank, address of branch or name of the account holder; a change of the bank account data (and validation) in the Beneficiary Register is sufficient.  Change of the action’s title and/or acronym Example: the consortium finds out that the acronym of their action is a protected trademark.  Change of the starting date, action duration or reporting periods Example: The GA for the action has a fixed starting date that is before the date on which the GA enters into force. Because of weather conditions, the consortium cannot start on that date and requests the Commission to change it. An extension of the action must be requested before the action ends and will only be accepted in exceptional cases.  Amendment for resuming the action after a suspension of the action implementation The amendment request must specify the dates when the suspension started and ended. The action implementation is then automatically resumed as from the following day (‘resumption date’).  Changes to Annex 1 (description of the action), in particular:  a significant change of the action tasks (e.g. if tasks are added/removed) or of their division among the beneficiaries  changes concerning in-kind contributions provided by third parties (against payment or free of charge) or subcontracts Such changes could in principle also be made via the ‘simplified approval procedure’ (see Articles 11, 12 and 13); however, if the beneficiary requests an amendment, it has prior assurance of the Commission/Agency agreement (on the in-kind contribution or subcontracting). If no amendment is requested, the Commission/Agency could consider them as not compliant with the GA, and declare their costs ineligible (when approving the reports).  changes concerning the tasks to be carried out by linked third parties and related costs  changes concerning optional clauses in the GA (options are removed or added, e.g. adding the options to provide trans-national access to research infrastructure requires normally a modification of Annex 1 and/or Annex 2). Even if the action is prolonged, the maximum grant amount (see Article 5.1) will NOT be increased. . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 330  Changes to the maximum grant amount, the action’s estimated eligible costs, amount of pre-financing or contribution to the Guarantee Fund Changes to the maximum grant amount (see Article 5.1) and/or the action’s estimated eligible costs (see Article 5.2) will be accepted ONLY in very exceptional cases (e.g. due to a clerical mistake). Changes to the maximum grant amount may have an effect on the pre-financing (and the contribution to the Guarantee Fund).  Changes to Annex 2 and Annex 2a (estimated budget) which require an amendment (see Article 4), in particular:  a budget transfer of amounts between beneficiaries or between budget categories (or both) which arises from a significant change that affects the action’s work (i.e. Annex 1)  a budget transfer to a form of costs that is not provided for in Annex 2 (e.g. from actual costs to unit costs). Examples: 1. During the action implementation, a beneficiary that declared its direct personnel costs as actual costs decides to change this and instead to declare them as unit costs in accordance with its usual accounting practices (‘average personnel costs’). 2. An SME joins an on-going GA. The SME owner does not have a salary and requests to be reimbursed for his/her personnel costs based on the unit costs for SME owners. In this case, it is necessary to amend the GA to modify the action’s estimated budget in Annexes 1,2 and 2a. Best practice: If Annex 2a needs to be changed, the beneficiaries should contact the Commission/Agency (via the Participant Portal messages function).  Change concerning specific cost categories (‘specific unit costs’) If the options in Articles 5.2 and 6.2 must be added/deleted, an amendment to the GA is necessary. Best practice: If the change concerns specific unit costs, the beneficiaries should contact the Commission/Agency (via the Participant Portal messages function). Sample list of cases where NO amendment is needed:  Budget transfers not listed above Transfers of amounts between beneficiaries or between budget categories (or both) do NOT require an amendment provided that the action is implemented in line with Annex 1 (see Article 4.2).  Change of name, address or other legal entity data (of beneficiaries/linked third parties) Simple changes of name, legal form (e.g. Ltd., S.A.), official registration number, address, VAT number require an amendment; an update of the beneficiary/data by the LEAR (and validation) in the Beneficiary Register is normally sufficient. Linked third parties must inform their beneficiary who must inform the Commission/Agency (since they do not have a LEAR) (via the Participant Portal) (see Article 17.2). The data will be updated in the Beneficiary Register by the Commission/Agency and validated. If — exceptionally — the Commission/Agency considers that the registered change affects the implementation of the action, it will inform the coordinator. If an amendment of the GA is needed, the coordinator may then request it. Example: Company R moves from Europe to Australia. If the change of address implies that the beneficiary is not going to be anymore eligible for EU funding, then it will be necessary to amend the GAs in which it participates (‘change concerning a beneficiary/linked third party not receiving EU funding’). The maximum grant amount (see Article 5.1) can NEVER be increased. . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 331  Short names have no legal value and only serve as easy identifiers within the GA. Therefore, short names cannot be changes through a dedicated amendment type. They may eventually be modified during the course of an amendment initiated on other grounds. A change of the person authorised to represent it for the purposes of signing the GA requires, by contrast, no follow-up at all (not even a change in the Beneficiary Register since this name is only relevant for the moment of GA signature (not afterwards).  Change of beneficiary due to universal takeover (called ‘universal transfer of rights and obligations’ in FP7). Transfers of the GA linked to a universal takeover (i.e. where the original entity is replaced by one new entity and all the rights and obligations (including the GA) are transferred to this new entity, e.g. merger or full acquisition) do NOT require an amendment; an update of the beneficiary data by the LEAR (and validation) in the Beneficiary Register is normally sufficient. Example: Beneficiary X merges with another existing entity Y by:  becoming part of it (thus X and Y are together known as ‘Y’, and entity X ceases to exist) or  establishing a new separate legal entity (X and Y are together known as ‘Z’). If — exceptionally — the Commission/Agency considers that the registered transfer affects the action implementation, it will inform the coordinator. If an amendment to the GA is needed, the coordinator may then request it. Example: The legal form or type of organisation of the new entity differs from that of the former beneficiary or linked third party and this has an impact on the implementation of the action. Case 1: The coordinator transfers all its rights and obligations to another legal entity. If this involves a change of the bank account number in Article 21.8, each GA in which it participates as coordinator must be amended to update this information. Case 2: A non-profit legal entity X is acquired by a big for-profit company Y; as a result of the acquisition Y assumes the rights and obligations of X in on-going Innovation GAs. The reimbursement rate applicable to Y in those on-going GAs will differ from that of X since the new beneficiary will not be entitled to a reimbursement rate of 100% but to a reimbursement rate of 70%. It may be necessary to modify the GA via an amendment, notably to update the table of costs. For on-going RIA grants there will be no need to modify Annex 2 since the reimbursement rate is the same for all beneficiaries (100%). In addition to updating the data in the Beneficiary Register, the beneficiary must inform the coordinator (offline) under Article 17.2, if the universal takeover could:  significantly affect or delay the implementation of the action or the EU’s financial interests or  affect the decision to award the grant or the compliance with requirements under the GA. The coordinator must then inform the Commission/Agency (via the Participant Portal) and, if necessary, request an amendment. The same applies if the universal takeover concerns a linked third party. How? Amendment requests must be prepared by the requesting party (i.e. the coordinator or the Commission/Agency) directly in the Participant Portal (see Article 52). Best practice: If none of the available amendment clauses fit, beneficiaries should contact the Commission/Agency (via the Participant Portal messages function), to discuss the amendment. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 332 The request must be unambiguous and complete and submitted in time (i.e. sufficiently in advance to allow proper analysis and preparation before they are due to take effect and — generally — before the end of the action, i.e. the date set out in Article 3). Requests introduced AFTER the end of the action will be accepted only exceptionally, for very specific (duly substantiated) cases (e.g. change of bank account, change of coordinator to make the payment of the balance)). The coordinator must ensure that it has the agreement of the consortium (in accordance with the internal decision-making processes, e.g. unanimity, simple or qualified majority, etc. set out in the consortium agreement). Once completed, the request (with all its uploaded supporting documents) must be submitted and signed by the PLSIGN of the coordinator (on behalf of the other beneficiaries; see Annex 3). Before it has been accepted or rejected, it may at any moment be withdrawn. In order to change the amendment request, it must be withdrawn and re-submitted (changes to submitted requests are NOT possible). Example: The coordinator requests an amendment to change its bank account number and the reallocation of tasks in Annex 1 and of budget in Annex 2. Since the change of bank account is urgent because the Commission has to make the interim payment and the revision of the Annexes may require more time, the coordinator withdraws the request and makes a new request to change only the bank account and a second one to change the Annexes. If accepted it will be counter-signed by the receiving party (again, directly in the Participant Portal by the PLSIGN). 2. Procedure The requesting party must formally notify the request for amendment to the other party (through the Participant Portal). The other party must — within 45 days — agree or disagree, by sending a formal notification (for the consortium: signed by the PLSIGN of the coordinator) through the Participant Portal. A request containing several changes to the GA will be considered as one (and must either be agreed or rejected by the other party as a whole). If the receiving party requests additional information/documents, a new deadline will apply, i.e. 45 days from receiving the additional information/documents. Example: The coordinator submits a request to add a new beneficiary with several linked third parties (see Article 14). The Commission requests a signed declaration for the joint and several liability of the linked Before the amendment request, new beneficiaries, new linked third parties or other new beneficiary data must have been registered and validated in the Beneficiary Register. Examples: A new beneficiary must be validated (‘legal entity validation’). This means that the new beneficiary will first have to register in the Beneficiary Register, be validated, appoint a LEAR, and provide the necessary information and supporting documents through the Participant Portal. Validation of the new bank account, to change the bank account. The amendment request must include the necessary information and supporting documents A signed and submitted amendment request can NOT be changed — only accepted, rejected or withdrawn. It is however possible to provide clarifications (through the electronic exchange system) or additional information/documents. . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 333 third parties (Annex 3a). A new 45-day deadline for evaluation and validation will apply from the moment the Commission receives the declaration. The deadline may exceptionally be extended by the receiving party — for a period to be determined case-by-case —, if necessary for the assessment of the request (e.g. a review is needed to assess the changes). If there is no reaction within the deadline, the request is considered to have been rejected ( new in Horizon 2020: contrary to FP7, there is NO tacit approval of amendments). A new amendment request may however be submitted — even if it fully or partly repeats the initial request. The amendment enters into force and is binding from the moment the receiving party has agreed to it (i.e. signed in the Participant Portal). The amendment will take effect (i.e. the changes to the GA will start to apply) either:  on the day of its entry into force (i.e. day of the last signature of the amendment) or  on the specific date(s) indicated (and agreed) in the amendment. The date should normally be after the entry into force of the amendment. In justified cases it may — exceptionally — be before (retroactivity of the amendment). (In some cases, the GA itself provides for retroactivity.) Examples (retroactivity allowed/foreseen in the GA): Where a new beneficiary is added to the GA, it must assume the rights and obligations from the ‘accession date’ specified in the Accession Form. If this date is before the entry into force of the amendment, this retroactivity implies that its costs will be considered eligible as from the accession date (and not as from the entry into force of the amendment). Following a suspension of the implementation of the action by the beneficiary or by the Commission, the suspension will be lifted with effect from the ‘resumption date’ set out in the amendment. This date may be before the date on which the amendment enters into force (see Article 49.2.2). If the amendment intends to correct an error, the change will be made with effect from entry into force of the GA (i.e. from the beginning). Depending on the amendment type, the date of taking effect may have an impact on the eligibility of costs. An amendment request involving several changes, may take effect on different dates. Example: On 1 May 2016, the coordinator requests an amendment to change the bank account and to add a new beneficiary. The addition of the beneficiary takes effect from the date of its accession, as specified in the Accession Form (1 April 2016), while the change of bank account takes effect on a date agreed by the parties or on the date on which the amendment enters into force (i.e. 10 June 2016, the day it is signed by the receiving party). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 334 ARTICLE 56 — ACCESSION TO THE AGREEMENT 1. Accession to the GA (by the beneficiaries mentioned in the Preamble) All beneficiaries (except the coordinator) must accede to the GA by signing the Accession Form (see Annex 3) in the Participant Portal (together with the declaration(s) of joint and several liability, if any). They must do this within 30 days after the GA enters into force (see Article 58). Only the beneficiaries’ legal signatories (PLSIGNs) may sign the Accession Forms. Declarations on joint and several liability (see Annex 3a) must be signed by the linked third party on paper and send it to its beneficiary. The beneficiary must scan it and upload it in PDF format, together with the Accession Form. The beneficiary must keep the original version. If the beneficiary does not submit this declaration, it will NOT be able to accede to the GA (and thus NOT be considered a party to the GA). Linked third parties do not become parties to the GA and therefore do NOT sign an Accession Form. The coordinator is not obliged to distribute hard copies of the GA and Accession Form to the other beneficiaries ( new in Horizon 2020). All documents are available in the ‘My Area’ in the Participant Portal. Specific cases (accession): JRC — If the JRC is beneficiary, it must sign Annex 3b as its Accession Form (instead of Annex 3). MULTI-BENEFICIARY ARTICLE 56 — ACCESSION TO THE AGREEMENT 56.1 Accession of the beneficiaries mentioned in the Preamble The other beneficiaries must accede to the Agreement by signing the Accession Form (see Annex 3) in the electronic exchange system (see Article 52) within 30 days after its entry into force (see Article 58) [OPTION if Article 14 applies and joint and several liability has been requested: and for beneficiaries for which the [Commission][Agency] has requested joint and several liability of a linked third party, by also submitting — at accession — a declaration on joint and several liability (see Annex 3a) signed by the third party.] They will assume the rights and obligations under the Agreement with effect from the date of its entry into force (see Article 58). If a beneficiary does not accede to the Agreement within the above deadline, the coordinator must — within 30 days — request an amendment to make any changes necessary to ensure proper implementation of the action. This does not affect the [Commission’s][Agency’s] right to terminate the Agreement (see Article 50). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 335 1. Addition of new beneficiaries In justified cases, the beneficiaries may request adding a new beneficiary. The new beneficiary must comply with the eligibility criteria of the work programme/call, have sufficient operational and financial capacity to perform the proposed tasks, comply with the non-exclusion criteria and commit to implement the action under the same terms and conditions as the other beneficiaries. Article 56 does not apply to mono-beneficiary actions. Mono-beneficiary actions can therefore NOT become multi-beneficiary actions. How? The new beneficiary must:  register in the Beneficiary Register and be validated — unless it already has a validated ‘participant identification code (PIC)’  sign the Accession Form directly in Participant Portal (see Article 52)  provide a declaration on joint and several liability of its linked third party (if required by the Commission/Agency). The coordinator must request an amendment for adding a new beneficiary (see Article 55). The Accession Form (attached to the amendment request) must specify the 'accession date' in the Accession Form. It must be either:  ‘the date of signature of the Accession Form’  ‘the date of entry into force of the Amendment’ OR  a fixed date:  either a retroactive date (i.e. before signature of the Accession Form) OR MONO-BENEFICIARY: ARTICLE 56 — ACCESSION TO THE AGREEMENT Not applicable 56.2 Addition of new beneficiaries In justified cases, the beneficiaries may request the addition of a new beneficiary. For this purpose, the coordinator must submit a request for amendment in accordance with Article 55. It must include an Accession Form (see Annex 3) signed by the new beneficiary in the electronic exchange system (see Article 52). New beneficiaries must assume the rights and obligations under the Agreement with effect from the date of their accession specified in the Accession Form (see Annex 3). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 336  a future date (i.e. after signature of the Accession Form — this should be an exceptional case with a justification). If new beneficiaries join the action to replace a beneficiary that leaves, they may set the accession date before the termination date (of the beneficiary that is replaced) — and thus both incur costs for a certain period. . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 337 ARTICLE 57 — APPLICABLE LAW AND SETTLEMENT OF DISPUTES 1. Applicable law As a general rule, H2020 GAs are subject to EU law (supplemented — where necessary — by Belgian law), for questions on their interpretation, application and validity. Specific cases (applicable law): International organisations (IOs) — If requested by the international organisation, the GA may provide for derogations for international organisations: Applicable law For international organisations that do not accept EU law No reference to any applicable law 75 . The applicable law will be determined by the Permanent Court of Arbitration (see also point 2). According to the Permanent Court of Arbitration Optional Rules for Arbitration Involving International Organisations and States, the applicable law are:  the rules of the organisation concerned  the law applicable to any agreement or relationship between the parties and  where appropriate, the general principles governing the law of international organisations and the rules of general international law. For international organisations that accept EU law, but not Belgian law EU law applies, supplemented by the law of the Member state or EFTA country that is mentioned in the GA. 75 See Article 180(1) of the Rules of Application. ARTICLE 57 — APPLICABLE LAW AND SETTLEMENT OF DISPUTES 57.1 Applicable law The Agreement is governed by the applicable EU law, supplemented if necessary by the law of Belgium [OPTION for international organisations that do not accept application of Union law: except for [insert name(s) of the international organisations concerned]]. [OPTION for international organisations that accept application of Union law but not Belgian law: For [insert name(s) of the international organisations concerned], the Agreement is governed by the applicable EU law, supplemented if necessary by the law of [insert name of a Member State or an EFTA country] [and, where appropriate, by the general principles governing the law of international organisations and the rules of general international law].] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 338 In addition, a reference to the general principles governing the law of the international organisations and the rules of general international law may be included in the GA. new in Horizon 2020: This is new compared to FP7, where (instead of a horizontal approach for all international organisations which cannot accept EU law) it was necessary to make specific provisions (special clause 3), in order to accommodate, for example, the participation of specialised agencies and international organisations of the UN family. It makes it easier for international organisations to participate in Horizon 2020. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 339 1. Dispute settlement As a general rule, H2020 GAs contain an ‘Article 272 TFEU arbitration clause’, referring disputes on the interpretation, application or validity of the GA to the Court of Justice of the European Union. An Article 272 action is ONLY possible once the Commission/Agency position is final (i.e. against ‘confirmation letters’, ‘debit notes’, etc.; NOT against ‘audit reports’, ‘letters of audit conclusions’ ‘pre-information letters’, etc.). For Commission grants, actions must be brought against the Commission; for Agency grants, they must be brought against the Agency. 57.2 Dispute settlement If a dispute concerning the interpretation, application or validity of the Agreement cannot be settled amicably, the General Court — or, on appeal, the Court of Justice of the European Union — has sole jurisdiction. Such actions must be brought under Article 272 of the Treaty on the Functioning of the EU (TFEU). [OPTION for non-EU beneficiaries (except beneficiaries established in an associated country with an association agreement to Horizon 2020 that stipulates sole jurisdiction of the European Court of Justice): As an exception, if such a dispute is between the [Commission][Agency] and [insert non-EU beneficiary(ies) name(s)], the competent Belgian courts have sole jurisdiction.] [OPTION for beneficiaries that are international organisations and for beneficiaries not receiving EU funding, established in a non-EU or associated country and which according to their national law cannot be subject to the jurisdiction of the European Court of Justice: As an exception, for the following beneficiaries: - [insert name of international organisation or beneficiary not receiving EU funding] - [insert name of international organisation or beneficiary not receiving EU funding] [same for other beneficiaries that are international organisations or beneficiary not receiving EU funding] such disputes with the [Commission][Agency] relating to the Agreement must — if they cannot be settled amicably — be referred to arbitration. The Permanent Court of Arbitration Optional Rules for Arbitration Involving International Organisations and States in force at the date of entry into force of the Agreement will apply. The appointing authority will be the Secretary-General of the Permanent Court of Arbitration following a written request submitted by either party. The arbitration proceedings must take place in Brussels and the language used in the arbitral proceedings will be English. The arbitral award will be binding on all parties and will not be subject to appeal.] If a dispute concerns administrative or financial penalties, offsetting or an enforceable decision under Article 299 TFEU (see Articles 44, 45 and 46), the beneficiaries must bring action before the General Court — or, on appeal, the Court of Justice of the European Union — under Article 263 TFEU. [OPTION for Agency grants: Actions against enforceable decisions must be brought against the Commission (not against the Agency).] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 340 For disputes of public law nature (i.e. which concern administrative or financial penalties, offsetting or enforceable decisions under Article 299 TFEU; see Articles 44, 45 and 46), actions (by any beneficiary — including non-EU beneficiaries, ‘beneficiaries not receiving EU funding’) must be brought before the Court of Justice of the European Union under Article 263 TFEU (NOT before any other court and NOT under Article 272). Specific cases (dispute settlement): Non-EU beneficiaries — For non-EU beneficiaries, disputes on the interpretation, application or validity of the GA are normally referred to the competent Belgian courts. (So far (i.e. until end of 2014) NONE of the agreements associating third countries to the Horizon 2020 programme provides for the sole jurisdiction of the European Court of Justice.) Disputes of public law nature remain before the European Court of Justice. Non-EU beneficiaries not receiving EU funding — For beneficiaries not receiving EU funding which according to their national law cannot be subject to the jurisdiction of the European Court of Justice, disputes on the interpretation, application or validity of the GA are referred to the Permanent Court of Arbitration (see also point 1). Other non-EU beneficiaries not receiving EU funding will be treated as normal non-EU beneficiaries (i.e. Belgian courts). Disputes of public law nature remain before the European Court of Justice. International organisations — For international organisations, disputes on the interpretation, application or validity of the GA are referred to the Permanent Court of Arbitration (see also point 1). (in line, for instance, with the Financial and Administrative Framework Agreement (FAFA) with the United Nations76). Disputes of public law will not in most cases arise, since international organisations are normally accorded immunity from public law decisions (under their constituent documents or international law). Such international organisations can therefore be subject only to contractual measures and to contractual dispute settlement (i.e. arbitration). For this reason, the Commission/Agency will normally not apply enforceable decisions under Article 299 TFEU (see Article 44) or decisions on administrative or financial penalties (see Article 45). Similarly, offsetting will always be applied only as a contractual measure on the basis of Article 44 GA (never as a public law measure directly on the basis of Article 80(1) of the Financial Regulation No 966/2012). For international organisations that have NO immunity, disputes of public law remain before the European Court of Justice. 76 Financial and Administrative Framework Agreement concluded by the European Community, represented by the Commission, and the United Nations of 29.4.2003, as amended by Addendum No 1 of 22.1.2014 (C(2014) 238). Available at https://ec.europa.eu/europeaid/node/45445. All procedures are organised in a way that the beneficiaries will be informed of the available means of redress (via a ‘redress clause’ in the letters). For more information on complaints, see the Online Manual. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 341 ARTICLE 58 — ENTRY INTO FORCE OF THE AGREEMENT 1. Entry into force The GA enters into force when the last of the following two signs:  the coordinator  the Commission/Agency. It is usually the Commission/Agency who signs last. ARTICLE 58 — ENTRY INTO FORCE OF THE AGREEMENT The Agreement will enter into force on the day of signature by the [Commission][Agency] or the coordinator, depending on which is later. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 General MGA 342 I.3 Issues applicable to particular countries The Commission will keep a record of its official position on issues raised by specific situations or by the legal framework applicable in particular countries — see the List of issues applicable to particular countries on the Participant Portal. Only countries for which the Commission has carried out a formal assessment of specific issues will appear in this section. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 ERC MGA 343 II. ERC MGAs II.1 Background information and approach The European Research Council (ERC) Model Grant Agreements are used for ERC actions only. The ERC gives:  ‘frontier research grants’, i.e.:  ERC Starting Grants (StG)  ERC Consolidator Grants (CoG)  ERC Advanced Grants (AdG)  ERC Synergy Grants (SyG)  proof of concept grants (PoC) and  low value grants. Frontier research actions use the H2020 ERC MGA; while two specific MGAs exist for ERC PoC and ERC Low value grants. The ERC MGAs follow the General MGA for numbering and content, except for: The H2020 ERC MGA deviates from the General MGA as follows:  Preamble (ERC principal beneficiary and name(s) of the PI(s))  Article 5.2 (ERC specific reimbursement rate)  Article 7.1 (ERC reference to work under the guidance of the PI)  Articles 11.1, 12.1, 13.1, 50.1.1, 50.1.2., 50.2.2, 50.3.1, 50.3.2., 50.3.3. (reference to financial or scientific reporting where necessary)  Articles 15 and 16 (not applicable)  Articles 20 and 21 (ERC specific articles on reporting and payment)  Articles 25.4, 26.3, 27.3, 28.2, 29.2, 29.3, 29.4, 31.4, 31.6, 38.1.2, 38.2.1 (reference to the ERC funding, the ERC logo and the PI where necessary)  Article 32 (Provisions on the working conditions for the PI and his/her team)  Article 41.3 (Provisions on internal arrangements)  Article 56 (Mono-beneficiary grant can become multi-beneficiary grant by addition of new beneficiaries)  Article 56a (ERC-specific Article on portability)  Annex 2 Model for the estimated budget for the action  Annex 4 Model for the financial statements All ERC MGAs deviate from the General MGA as follows:  ‘Coordinator’ is replaced by ‘principal beneficiary’ (also in the Annexes)  [Agency][Commission] is replaced by ‘Agency’  References to/options for Euratom are taken out  ‘Technical report(s)’ is replaced by ‘scientific report(s)’  The table of contents is adapted  Cross-references in the footnotes are adapted H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 ERC MGA 344 The annotations will concentrate on differences in substance and interpretation that require explanation. Parts that do not apply or differ only in presentation (e.g. Articles 11.1, 12.1, 13.1, 50.1.1, 50.1.2., 50.2.2, 50.3.1, 50.3.2., 50.3.3., 15 and 16, Annexes) will not be shown. By contrast, provisions that do not deviate from the General MGA, but that require clarification or a specific interpretation for ERC actions are added:  Article 2 (ERC MGA actions; ERC MGA PoC actions)  Article 4.1 (ERC MGA budget categories)  Article 6 (ERC MGA eligible and ineligible costs)  Article 8 (ERC MGA rules on third party involvement) Since the ERC MGA and the ERC MGA PoC have a similar set-up (i.e. principal beneficiary, host institution, principal investigator) and provisions, the annotations of the ERC MGA PoC will be limited to major differences from the ERC MGA. The annotations (for both MGAs) are based on the multi-beneficiary version. The differences between multi and mono-beneficiary versions are marginal. The H2020 ERC MGA PoC deviates from the General MGA as follows:  Preamble (ERC principal beneficiary and name(s) of the PI(s))  Article 5.2 (ERC specific reimbursement rate)  Article 7.1 (ERC reference to work under the guidance of the PI)  Articles 11.1, 12.1, 13.1, 50.1.1, 50.1.2., 50.3.1, 50.3.2., 50.3.3. (reference to single or multi reporting where necessary)  Articles 15 and 16 (not applicable)  Articles 20 and 21 (ERC PoC specific articles on reporting and payment)  Articles 26.3, 27.3, 28.2, 29.2, 29.3, 29.4, 31.6, 38.1.2, 38.2.1 (reference to the ERC funding, the ERC logo and the Principal Investigator where necessary)  Article 41.3 (Provisions on internal arrangements) H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 ERC MGA 345 II.2 H2020 ERC MGA: Annotations GRANT AGREEMENT NUMBER [insert number] — [insert acronym] This Agreement (‘the Agreement’) is between the following parties: on the one part, the European Research Council Executive Agency (ERCEA) (‘the Agency’), under the power delegated by the European Commission (‘the Commission’), represented for the purposes of signature of this Agreement by [[function, [Directorate-General, Directorate, Unit] [Department]], [forename and surname] 3 , and on the other part, 1. ‘the principal beneficiary’: [full official name (short name)][legal form], [official registration No], established in [official address in full], [VAT number], [OPTION for principal beneficiary not receiving EU funding: as ‘beneficiary not receiving EU funding’ (see Article 9),] represented for the purposes of signing the Agreement by [function, forename and surname], hosting [and engaging] the following [OPTION by default: ‘principal investigator’: 4 - [Name][Date and place of birth]] 5 [OPTION for SyG: ‘corresponding principal investigator’: - [Name][Date and place of birth] [and ‘other principal investigator(s)’: - [Name][Date and place of birth] - [Name][Date and place of birth]].] and the following other beneficiaries, if they sign their ‘Accession Form’ (see Annex 3 and Article 56): 2. [full official name (short name)][legal form], [official registration No], [official address in full] [VAT number], [OPTION for SyG: hosting [and engaging] the ‘other principal investigator(s)’: - [Name][Date and place of birth] - [Name][Date and place of birth] [same for each beneficiary] [OPTION for beneficiaries not receiving EU funding: X. [full official name (short name)] [legal form], [official registration No], established in [official address in full] [VAT number], as ‘beneficiary not receiving EU funding’ (see Article 9),] [same for each beneficiary] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 ERC MGA 346 1. Principal beneficiary — Beneficiaries — Host institution In ERC grants, the coordinator is called ‘principal beneficiary’. The 'host institution (HI)' is the beneficiary that hosts (and normally also engages) the ‘principal investigator (PI)’. [OPTION if the JRC is a beneficiary: and X. the Joint Research Centre (JRC) established in [official address in full], if it signs the Administrative Arrangement (see Annex 3b)]. Unless otherwise specified, references to ‘beneficiary’ or ‘beneficiaries’ include the principal beneficiary [OPTION if the JRC participates: and the Joint Research Centre (JRC).]. [OPTION for SyG: Unless otherwise specified, references to ‘principal investigator’ or ‘principal investigators’ include the corresponding principal investigator.] The parties referred to above have agreed to enter into the Agreement under the terms and conditions below. By signing the Agreement or the Accession Form [OPTION if the JRC is a beneficiary: or the Administrative Arrangement], the beneficiaries accept the grant and agree to implement it under their own responsibility and in accordance with the Agreement, with all the obligations and conditions it sets out. The Agreement is composed of: Terms and Conditions Annex 1 Description of the action Annex 2 Estimated budget for the action Annex 3 Accession Forms [OPTION to be used if Article 14 applies and if joint and several liability has been requested by the Agency: 3a Declaration on joint and several liability of linked third parties] [OPTION if the JRC participates: 3b Administrative Arrangement] Annex 4 Model for the financial statements Annex 5 Model for the certificate on the financial statements Annex 6 Model for the certificate on the methodology 1 Regulation (EU) No 1291/2013 of the European Parliament and of the Council of 11 December 2013 establishing Horizon 2020 - the Framework Programme for Research and Innovation (2014-2020) (‘H2020 Framework Programme Regulation No 1291/2013’) (OJ L 347, 20.12.2013 p.104). 2 ERC grants (i.e. Starting Grants, Consolidator Grants, Advanced Grants and Synergy Grants) fund excellent investigators and their research teams for ground-breaking, high-gain/high-risk research at the frontiers of knowledge 3 The person representing the Agency must be an authorising officer (by delegation or sub-delegation) designated in accordance with document 60008 of 22.02.2001 ‘Mise en place de la Charte des ordonnateurs’. 4 Text in italics shows the options of the Model Grant Agreement that are applicable to this Agreement. 5 Text in italics shows the options of the Model Grant Agreement that are applicable to this Agreement. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 ERC MGA 347 2. Principal investigator(s) For ERC grants, the main researcher (i.e. the ‘principal investigator (PI)’) is named in the GA. PIs can be of any nationality, if they intend to conduct research in an EU Member State or H2020 associated country and are hosted by a host institution that is based in an EU Member State or H2020 associated country and can receive EU funding. Due to the key role of the PI, s/he cannot be replaced by any other researcher during the implementation of the action. Requests for amendments to change the PI will be rejected. The Agency must be informed before any change in employment or location of the PI. PIs do not become party to the GA, but are key actors of ERC actions. This leads to an asymmetrical relationship (in which the PI is the key actor in charge of innovative research, but it is the host institution that subscribes to the financial and legal obligations under the GA — since it is the beneficiary). Examples: A PI can choose its own research team. This team is the research team of the PI and thus different from that of a network or consortium of undertakings, universities, research centres or other legal entities. The engagement of the team follows the rules of the beneficiary and its country. PIs must be supported by their host institution during the entire action duration. In order to govern their internal relationship (during the implementation of the ERC action), PIs and their host institutions must sign a ‘supplementary agreement (SA)’ (see Article 32). The supplementary agreement can NOT replace the employment/engagement contract. Specific cases (PIs): PI employed/engaged by a third party — Exceptionally, the PI may be employed/engaged not by the beneficiary but by a third party (see Article 8), i.e.:  a third party from an EU Member State or H2020 associated country that provides the PI as in- kind contribution or  a linked third party. This must be specifically justified in the proposal and included in Annex 1. In this case, the supplementary agreement (see Article 32) must be signed by the PI, the host institution and the third party. Retired PI — The PI may be retired (i.e. normally no longer under an active labour contract). Several PIs — ERC Synergy grants have several PIs (but only one principal beneficiary and one of the PIs that acts as ‘correspondent PI’). Each host institution must conclude a supplementary agreement with the PI(s) they engage. No supplementary agreement — NO supplementary agreement is needed for ERC PoC grants. PI entitled to sign the supplementary agreement — If the PI is entitled to sign the supplementary agreement on behalf of the host institution (because of his/her position in the institution), the supplementary agreement must be counter-signed by another person empowered by the institution (i.e. the principal investigator cannot sign his/her own supplementary agreement for both parties) Grant portability — If the GA is transferred to another host institution (see Article 56a) a new supplementary agreement must be signed with the new host institution (and forwarded to the Agency). The GA cannot be amended before the PI has sent the new supplementary agreement. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 ERC MGA 348 ARTICLE 2 — ACTION TO BE IMPLEMENTED 1. ERC frontier research actions What? ERC frontier research grants fund:  ground-breaking, high-gain/high-risk research at the frontiers of knowledge (‘frontier research’) in any field of research (except nuclear energy), by one (or more) principal investigator(s) and their research team. ERC actions are normally mono-beneficiary actions, but can also be multi-beneficiary. ERC actions are funded under Part I of the Horizon 2020 Framework Programme, ‘European Research Council’ (e.g. ERC-2015-STG). ARTICLE 2 — ACTION TO BE IMPLEMENTED [— COMPLEMENTARY GRANT] [— JOINTLY FUNDED ACTION] The grant is awarded for the action entitled [insert title of the action] — [insert acronym] (‘action’), as described in Annex 1. For more information on ERC actions, see the Online Manual and the H2020 grants fact sheets on the Participant Portal. For more information on the conditions for participation and funding, see the Online Manual, the ERC home page or the ERC Work Programme and the call and topics pages of the call. For examples of successful ERC actions, see the ERC website. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 ERC MGA 349 ARTICLE 4 — ESTIMATED BUDGET AND BUDGET TRANSFERS 1. Budget categories The ERC MGA uses in principle the same budget categories as the General MGA. Budget categories of the ERC MGA:  direct personnel costs  costs for employees (or equivalent)  costs for natural persons working under a direct contract  costs of personnel seconded by a third party against payment  costs for SME owners without salary  costs for beneficiaries that are natural persons without salary  direct costs of subcontracting  other direct costs  travel costs and related subsistence allowances  equipment costs  costs of other goods and services  capitalised and operating costs of large research infrastructure  indirect costs. Thus, the ERC MGA does NOT have:  ‘personnel costs for providing trans-national access to research infrastructure’  ‘direct costs of providing financial support to third parties’  ‘specific cost categories’. The budget categories are relevant for the estimated budget (Article 4 and Annex 2), forms of costs (Article 5), cost eligibility rules (Article 6.2) and the cost declarations (i.e. financial statements; Article 20 and Annex 4). . ARTICLE 4 — ESTIMATED BUDGET AND BUDGET TRANSFERS 4.1 Estimated budget The ‘estimated budget’ for the action is set out in Annex 2. It contains the estimated eligible costs and the forms of costs, broken down by beneficiary [(and linked third party)] and budget category (see Articles 5, 6, [and 14]). [OPTION to be used if Article 9 applies: It also contains the estimated costs of the beneficiaries not receiving EU funding (see Article 9).] […] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 ERC MGA 350 ARTICLE 5 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATE AND FORMS OF COSTS 1. Reimbursement rate How much? For ERC actions, the reimbursement rate is set at 100 % (see the ERC Work Programme). 2. Cost forms For ERC actions, the cost forms are in principle the same as in the General MGA (see Article 5 H2020 General MGA). However, the ERC MGA does not use all the unit costs and flat-rates of the General MGA: ARTICLE 5 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATE AND FORMS OF COSTS […] 5.2 Form of grant, reimbursement rate and forms of costs The grant reimburses 100% of the beneficiaries’ [and linked third parties’] eligible costs for the action (see Article 6) (‘reimbursement of eligible costs grant’) (see Annex 2). The estimated eligible costs of the action are EUR [insert amount (insert amount in words)]. Eligible costs (see Article 6) must be declared under the following forms (‘forms of costs’): (a) for direct personnel costs: - as actually incurred costs (‘actual costs’) or - on the basis of an amount per unit calculated by the beneficiary in accordance with its usual cost accounting practices (‘unit costs’). Personnel costs for SME owners or beneficiaries that are natural persons not receiving a salary (see Article 6.2, Points A.4 and A.5) must be declared on the basis of the amount per unit set out in Annex 2 (unit costs); (b) for direct costs of subcontracting: as actually incurred costs (actual costs); (c) for direct costs of providing financial support to third parties: not applicable; (d) for other direct costs: as actually incurred costs (actual costs); (e) for indirect costs: on the basis of a flat-rate applied as set out in Article 6.2, Point E (‘flat-rate costs’); (f) specific cost category(ies): not applicable. […] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 ERC MGA 351 Like the General MGA, it uses the unit cost for personnel costs on the basis of the beneficiaries’ usual accounting practices, the unit costs for SME owners without salary and beneficiaries that are natural persons without salary and the flat-rate of 25% for indirect costs.77 It does NOT use the unit costs of the ‘specific cost categories’ of the General MGA. 77 See Article 29(1) and 33(2) of the Rules for Participation and Commission Decision C(2013) 8197 of 3 December 2013 authorising the use of reimbursement on the basis of unit costs for the personnel costs of the owners of small and medium-sized enterprises and beneficiaries that are natural persons not receiving a salary under the Horizon 2020 Framework Programme for Research and Innovation and under the Research and Training Programme of the European Atomic Energy Community (2014-2018). Available at http://ec.europa.eu/research/participants/data/ref/h2020/other/legal/unit_costs/unit-costs_sme- owners_natural-persons-no-salary_en.pdf. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 ERC MGA 352 ARTICLE 6 — ELIGIBLE AND INELIGIBLE COSTS 1. Specific conditions for costs to be eligible Article 6.2 refers to specific eligibility conditions applicable per budget category. The ERC MGAs use in principle the same budget categories (covering the same types of costs) as the General MGA (see Article 6 H2020 General MGA) — with the exception of ‘direct costs of providing financial support to third parties’, ‘specific cost categories’ and ‘costs for providing access to trans-national research infrastructure’. The same conditions for eligibility and rules for cost calculation apply as in the General MGA (see Article 6 H2020 General MGA). However, ERC grants have the following specificities:  for ‘direct personnel costs’: ARTICLE 6 — ELIGIBLE AND INELIGIBLE COSTS […] 6.2 Specific conditions for costs to be eligible Costs are eligible if they comply with the general conditions (see above) and the specific conditions set out below for each of the following budget categories: A. direct personnel costs; B. direct costs of subcontracting; C. not applicable; D. other direct costs; E. indirect costs; F. not applicable. ‘Direct costs’ are costs that are directly linked to the action implementation and can therefore be attributed to it directly. They must not include any indirect costs (see Point E below). ‘Indirect costs’ are costs that are not directly linked to the action implementation and therefore cannot be attributed directly to it. […] 6.5 Ineligible costs ‘Ineligible costs’ are: […] (b) costs declared under another EU or Euratom grant (including grants awarded by a Member State and financed by the EU or Euratom budget and grants awarded by bodies other than the [Commission][Agency] for the purpose of implementing the EU or Euratom budget); in particular, indirect costs if the beneficiary is already receiving an operating grant financed by the EU or Euratom budget in the same period [;][.] […] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 ERC MGA 353 Costs for ‘teaching buy-outs’ — If the beneficiaries hire substitutes to perform some of the PI’s duties that are not linked to the ERC grant (e.g. teaching), these costs are NOT eligible. PI employed/engaged by a third party — If the PI is employed/engaged by a third party (which thus pays his/her salary and seconds him/her to work on the premises of the beneficiary, for free or against reimbursement, the salary costs may be declared as direct personnel costs (if for free: as ‘personnel costs – costs for employees (or equivalent)’ (Article 6.2.A.1); if against payment: as ‘personnel costs – costs of personnel seconded by a third party against payment’ (Article 6.2.A.3)).  for ‘other direct costs’: Recruitment costs — For ERC frontier research grants, recruitment costs, if clearly attributable to the action, are eligible as ‘other direct costs’ (because recruitment is part of the activities of such actions — unlike for actions under the General MGA or ERC PoC actions). Purchase of scientific publications — Costs for scientific publications (e.g. books, manuscripts, articles, digital copies, etc.) may be eligible, if their direct link to the action and their necessity for the action is demonstrated. Costs related to protection of the action’s results — Are eligible. Given the increasing emphasis on the protection of inventions, the PIs are encouraged to protect their intellectual property rights properly. Costs related to protection of other intellectual property are NOT eligible. Costs related to open access — Costs for open access to publications (including monographs, and research data) are eligible if incurred during the action duration. This includes costs charged by data repositories or data centres for the storage and maintenance of the research data generated by the action. With explicit agreement by the Agency, it can also include fees levied for a membership scheme (if this is a requirement for publishing with open access or if membership is a pre-condition for significantly lower article processing charges). Costs related to scientists’ visits — Short-term scientists’ visits undertaken in the framework of an international agreement on scientific and technological cooperation (ERC Implementing Arrangements78) are eligible even if the scientist is not mentioned as a team member. Annex 1 does not need to be amended (i.e. the scientist and research visit do not need to be mentioned). 2. Ineligible costs The rules on ineligible costs are the same as in the General MGA (see Article 6.5 H2020 General MGA). 78 See http://erc.europa.eu/implementing-arrangements. ERC grants do NOT prevent PIs from applying independently (i.e. in their own name) for further EU funding for other actions or for the same action, but for costs that are not eligible (or not declared) under the ERC grant. The fact that the funding rate for ERC grants is 100% does not mean that the grant pays for 100% of the costs of the ERC action. Therefore cost items not declared under the ERC grant may be covered by other EU funding. For more information on how to combine EU funding from different programmes (‘complementary EU funding’ or ‘synergies’), see the Online Manual. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 ERC MGA 354 ARTICLE 8 — RESOURCES TO IMPLEMENT THE ACTION — THIRD PARTIES INVOLVED IN THE ACTION 1. Appropriate own resources — Use of third party resources — Third parties involved in the action For ERC actions, the same rules on third party involvement apply as in the General MGA (see Article 8 H2020 General MGA). The PI must in principle, be hosted and engaged by the principal beneficiary. However, in exceptional cases, the PI can be engaged by a third party (e.g. a third party that makes the PI available to work in the host institution; see Articles 11 and 12). Example: Research agencies that put the PIs at disposal of different universities. ARTICLE 8 — RESOURCES TO IMPLEMENT THE ACTION — THIRD PARTIES INVOLVED IN THE ACTION The beneficiaries must have the appropriate resources to implement the action. If it is necessary to implement the action, the beneficiaries may: - purchase goods, works and services (see Article 10); - use in-kind contributions provided by third parties against payment (see Article 11); - use in-kind contributions provided by third parties free of charge (see Article 12); - call upon subcontractors to implement action tasks described in Annex 1 (see Article 13); - call upon linked third parties to implement action tasks described in Annex 1 (see Article 14). In these cases, the beneficiaries retain sole responsibility towards the Agency and the other beneficiaries for implementing the action. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 ERC MGA 355 ARTICLE 18 — KEEPING RECORDS — SUPPORTING DOCUMENTATION ARTICLE 18 — KEEPING RECORDS — SUPPORTING DOCUMENTATION 18.1 Obligation to keep records and other supporting documentation […] 18.1.2 Records and other documentation to support the costs declared The beneficiaries must keep the records and documentation supporting the costs declared, in particular the following: (a) for actual costs: adequate records and other supporting documentation to prove the costs declared, such as contracts, subcontracts, invoices and accounting records. In addition, the beneficiaries’ usual cost accounting practices and internal control procedures must enable direct reconciliation between the amounts declared, the amounts recorded in their accounts and the amounts stated in the supporting documentation; (b) for unit costs: adequate records and other supporting documentation to prove the number of units declared. Beneficiaries do not need to identify the actual eligible costs covered or to keep or provide supporting documentation (such as accounting statements) to prove the amount per unit. In addition, for direct personnel costs declared as unit costs calculated in accordance with the beneficiary’s usual cost accounting practices, the beneficiaries must keep adequate records and documentation to prove that the cost accounting practices used comply with the conditions set out in Article 6.2, Point A. The beneficiaries [and linked third parties] may submit to the Commission, for approval, a certificate (drawn up in accordance with Annex 6) stating that their usual cost accounting practices comply with these conditions (‘certificate on the methodology’). If the certificate is approved, costs declared in line with this methodology will not be challenged subsequently, unless the beneficiaries have concealed information for the purpose of the approval. (c) for flat-rate costs: adequate records and other supporting documentation to prove the eligibility of the costs to which the flat-rate is applied. The beneficiaries do not need to identify the costs covered or provide supporting documentation (such as accounting statements) to prove the amount declared at a flat-rate. In addition, for personnel costs (declared as actual costs or on the basis of unit costs), the beneficiaries must keep time records for the number of hours declared. The time records must be in writing and approved by the persons working on the action and their supervisors, at least monthly. In the absence of reliable time records of the hours worked on the action, the Agency may accept alternative evidence supporting the number of hours declared, if it considers that it offers an adequate level of assurance. As an exception, for persons working exclusively on the action, there is no need to keep time records, if the beneficiary signs a declaration confirming that the persons concerned have worked exclusively on the action. [OPTION to be added if Article 14 applies: For costs declared by linked third parties (see Article 14), it is the beneficiary that must keep the originals of the financial statements and the certificates on the financial statements of the linked third parties.] […] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 ERC MGA 356 1. Records for personnel costs — Hours worked for the action For ERC actions, the same rules on record keeping apply as in the General MGA (see Article 18 H2020 General MGA). In addition, the beneficiaries must prove that the PI time commitments (set out in Annex 1 and 2) were respected, i.e.:  for the percentage of total working time on the action:  if the PI works 100% of his/her total working time for the host institution, but only partially on the ERC action: by using time sheets  if the PI works 100% of his/her total working time for the host institution and exclusively on the ERC action (during its entire duration): via a declaration signed by the beneficiary and the PI  if the PI works partly for other institutions (i.e. has working time outside the contract between PI and HI): via a declaration signed by the beneficiary and the PI  for the minimum percentage of total working time in a EU Member State or H2020 associated country: via a declaration signed by the beneficiary and the PI. In the absence of this documentation, the ERC may accept alternative evidence, if it considers that it offers adequate level of assurance. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 ERC MGA 357 ARTICLE 20 — REPORTING — PAYMENT REQUESTS ARTICLE 20 — REPORTING — PAYMENT REQUESTS 20.1 Obligation to submit reports The principal beneficiary must submit to the Agency (see Article 52) the scientific and financial reports set out in this Article. The financial report includes the requests for payments. The reports must be drawn up using the forms and templates provided in the electronic exchange system (see Article 52). 20.2 Scientific reporting — Reporting periods The action is divided into the following ‘scientific reporting periods’: - SRP1: from month 1 to month [X] - [- SRP2: from month [X+1] to month[ Y] - SRP3: from month [Y+1] to month [Z] - [same for other SRPs] - final SRP: from month [N+1] to [the last month of the project].] The beneficiary must submit to the Agency a: - ‘periodic scientific report’ within 60 days after the end of each period (except the last one) and - ‘final scientific report’ within 60 days after the end of the last reporting period. The periodic scientific report must include: (a) information about the scientific progress of the work; (b) achievements and results of the action, such as publications and a declaration of any major change of scientific strategy; (c) information on whether and how open access has been provided to these results (see Article 29); (d) a summary of the achievements of the action for publication by the Agency. The final scientific report must: (a) present the final results, achievements and conclusions of the action, and how they have been disseminated (including via scientific publications) (see Article 29); (b) contain a summary of the achievements of the action, for publication by the Agency. 20.3 Financial reporting — Payment requests — Reporting periods The action is divided into the following ‘financial reporting periods’: - FRP1: from month 1 to month [X] - [- FRP2: from month [X+1] to month[ Y] - FRP3: from month [Y+1] to month [Z] - [same for other FRPs] - final FRP: from month [N+1] to [the last month of the project].] The beneficiary must— within 60 days after the end of each period — submit to the Agency a ‘financial report’ for each reporting period. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 ERC MGA 358 The financial report must contain: (a) information on the eligible costs, including a ‘breakdown of direct costs table’ and a ‘budget follow-up table’; (b) an ‘individual financial statement’ (see Annex 4) from the beneficiary [and from each linked third party] for the reporting period concerned. The individual financial statement must detail the eligible costs (actual costs, unit costs and flat-rate costs; see Article 6) for each budget category (see Annex 2). The beneficiary [and linked third parties] must declare all eligible costs, even if — for actual costs, unit costs and flat-rate costs — they exceed the amounts indicated in the estimated budget (see Annex 2). Amounts which are not declared in a financial statement will not be taken into account by the Agency. If an individual financial statement is not submitted for a reporting period, it may be included in the periodic financial report for the next reporting period. The final financial statements must also detail the receipts of the action (see Article 5.3.3). The beneficiary [and each linked third party] must certify that: - the information provided is full, reliable and true; - the costs can be substantiated by adequate records and supporting documentation (see Article 18) that will be produced upon request (see Article 17) or in the context of checks, audits and investigations (see Article 22), and - for the last reporting period: that all the receipts have been declared (see Article 5.3.3); - the costs declared are eligible (see Article 6); (c) a ‘summary financial statement’ (see Annex 4), created automatically by thesystem, consolidating the individual financial statements for the reporting period concerned and including the request for interim payment (or — for the last financial reporting period — the request for payment of the balance); (d) for the last financial reporting period only: a ‘certificate on the financial statements’ (see Annex 5) for the beneficiary [and linked third party], if it requests a total contribution of EUR 325 000 or more, as reimbursement of actual costs and unit costs calculated on the basis of its usual cost accounting practices (see Article 5.2 and Article 6.2, Point A). 20.4 Currency for financial statements and conversion into euro Financial statements must be drafted in euro. Beneficiaries [and linked third parties] with accounting established in a currency other than the euro must convert the costs recorded in their accounts into euro, at the average of the daily exchange rates published in the C series of the Official Journal of the European Union, calculated over the corresponding reporting period. If no daily euro exchange rate is published in the Official Journal of the European Union for the currency in question, they must be converted at the average of the monthly accounting rates published on the Commission’s website, calculated over the corresponding reporting period. If the beneficiary [or a linked third party] has accounting established in euro, it must convert costs incurred in another currency into euro according to its usual accounting practices. 20.5 Language of reports All reports (scientific and financial reports, including financial statements) must be submitted in the language of the Agreement. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 ERC MGA 359 1. Reports When & What? For ERC actions, the principal beneficiary must submit both:  a ‘periodic scientific report’ after the end of each scientific reporting period (except the last one), with:  information about the scientific progress of the work  the achievements and results of the action, such as publications and a declaration of any major change of scientific strategy  information on whether and how open access has been provided to these results (see Article 29)  a summary of the achievements of the action, for publication by the Agency.  a ‘final scientific report’ at the end of the action, with:  the final results, achievements and conclusions of the action, and how they have been disseminated (including via scientific publications) (see Article 29)  a summary of the achievements of the action, for publication by the Agency. Example: For a five-year grant, there are two scientific reporting periods, so a ‘periodic scientific report’ is due for months 1-30 and a ‘final scientific report’ for months 31-60. In addition, the principal beneficiary must submit a ‘financial report’ at the end of each financial reporting period, with:  a narrative containing information on the eligible costs, including a ‘breakdown of direct costs table’ and a ‘budget follow-up table’  an ‘individual financial statement’  a ‘summary financial statement’, created automatically by the system (on the basis of all financial statements submitted by the beneficiaries and linked third parties for the reporting period), which counts as the request of payment  for the last financial reporting period only: a ‘certificate on the financial statements (CFS)’. Example: For a five-year grant, there are four financial reporting periods, so a financial report is due for months 1-18, 19-36, 37-54 and 55-60. 20.6 Consequences of non-compliance — Suspension of the payment deadline — Termination If the reports submitted do not comply with this Article, the Agency may suspend the payment deadline (see Article 47) and apply any of the other measures described in Chapter 6. If the beneficiary breaches its obligation to submit the reports and if it fails to comply with this obligation within 30 days following a written reminder sent by the Agency, the Agreement may be terminated (see Article 50). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 ERC MGA 360 How? All reports must be prepared and submitted directly in the Participant Portal, see Article 20 H2020 General MGA). 2. Reporting periods Like for the General MGA, ERC actions are divided into reporting periods. The ERC MGA has, however, different reporting periods for financial and scientific reports. Their length is defined in the signed GA. Normally, the financial reporting period is 18 months, whereas scientific reports are due halfway through and at the end of the project. Example: For a five-year grant, there are four financial reporting periods (months 1-18, 19-36, 37-54 and 55-60) and two scientific reporting periods (months 1-30 and 31-60). Reports must be submitted within 60 days after each period ends. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 ERC MGA 361 ARTICLE 26 — OWNERSHIP OF RESULTS 1. Third parties with rights on results For ERC actions, the same rules on third party rights apply as in the General MGA (see Article 26 H2020 General MGA). Due to the key role of the PI, it is however particularly important that agreements between the host institution and the PI allow the host institution to comply with its obligations under the GA — either by foreseeing a transfer of ownership to the host institution or by providing it with appropriate access rights (with a right to sub-license). ARTICLE 26 — OWNERSHIP OF RESULTS […] 26.3 Rights of third parties (including personnel and the principal investigator[s]) If third parties (including personnel and the principal investigator[s]) may claim rights to the results, the beneficiary concerned must ensure that it complies with its obligations under the Agreement. If a third party generates results for a beneficiary, the beneficiary concerned must obtain all necessary rights (transfer, licences or other) from the third party, in order to be able to respect its obligations as if those results were generated by the beneficiary itself. If obtaining the rights is impossible, the beneficiary must refrain from using the third party to generate the results. […] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 ERC MGA 362 ARTICLE 29 — DISSEMINATION OF RESULTS — OPEN ACCESS — VISIBILITY OF EU FUNDING ARTICLE 29 — DISSEMINATION OF RESULTS — OPEN ACCESS — VISIBILITY OF EU FUNDING […] 29.2 Open access to scientific publications Each beneficiary must ensure open access (free of charge, online access for any user) to all peer-reviewed scientific publications relating to its results. In particular, it must: (d) as soon as possible and at the latest on publication, deposit a machine-readable electronic copy of the published version or final peer-reviewed manuscript accepted for publication in a repository for scientific publications. Moreover, the beneficiary must aim to deposit at the same time the research data needed to validate the results presented in the deposited scientific publications. (e) ensure open access to the deposited publication — via the repository — at the latest: (iii) on publication, if an electronic version is available for free via the publisher, or (iv) within six months of publication (twelve months for publications in the social sciences and humanities) in any other case. (f) ensure open access — via the repository — to the bibliographic metadata that identify the deposited publication, which must include a persistent identifier. 29.3 Open access to research data [OPTION for grants wishing to participate on a voluntary basis in the open Research Data Pilot in the framework of an ERC frontier research action (if opt-in option provided for by the ERC work programme): Regarding the digital research data generated in the action (‘data’), the beneficiaries must take appropriate measures to ensure open access, including: (c) deposit in a research data repository and take measures to make it possible for third parties to access, mine, exploit, reproduce and disseminate — free of charge for any user — the following: (iii) the data, including associated metadata, needed to validate the results presented in scientific publications as soon as possible; (iv) other data, including associated metadata, as specified in Annex 1; (d) provide information — via the repository — about tools and instruments at the disposal of the beneficiaries and necessary for validating the results (and — where possible — provide the tools and instruments themselves). This does not change the obligation to protect results in Article 27, the confidentiality obligations in Article 36, the security obligations in Article 37 or the obligations to protect personal data in Article 39, all of which still apply. As an exception, the beneficiaries do not have to ensure open access to specific parts of their research data if the achievement of one of the action objectives, as described in Annex 1, would be jeopardised by making those specific parts of the research data openly accessible. In this case, the Annex 1 must contain the reasons for not giving access.] [OPTION: Not applicable] […] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 ERC MGA 363 1. Open access to scientific publications For ERC actions, the rules for open access to scientific publications are in principle the same as in the General MGA (see Article 29 H2020 General MGA). Beneficiaries must ensure open, free-of-charge access to the end-user to peer-reviewed scientific publications relating to their results. ‘Peer-reviewed publications’ means publications that have been evaluated by other scholars See also the Open Access Guidelines for research results funded by the ERC. ERC grants have however the following specificities: The ERC Scientific Council recommends the use of subject-specific repositories:  for publications in the Life Sciences domain: Europe PubMed Central (http://europepmc.org)  for publications in the Physical Sciences and Engineering domain: arXiv (http://arxiv.org). If there is no appropriate discipline specific repository, researchers should make their publications available in institutional repositories or in centralized ones, such as Zenodo (http://zenodo.org). For publications issued after the end of the action, if beneficiaries cannot provide open access without incurring additional costs for ‘gold’ open access, they may choose ‘green’ open access with an extended embargo period which goes beyond six/twelve months. Moreover, with explicit agreement by the Agency, the extended deadline for publications for grants in the social sciences and humanities domain (i.e. 12 months) can exceptionally be granted also for specific publications of grants in other domains, if the specific publication can be considered to relate to the social sciences and humanities. This must be requested within the 6 months originally foreseen. Finally, the ERC MGA foresees lighter requirements for bibliographic metadata, focusing only on a persistent identifier (i.e. a stable address/marker to identify the publication, such as a ‘Digital Object Identifier (DOI)’79 or other systems). Best practice: If the repository allows for this, beneficiaries of ERC grants are strongly encouraged to ensure that the bibliographic metadata also includes additional information such as the European Research Council (ERC) as funding source, the grant number, the title of the action and its acronym, the publication date, and the length of the embargo period (if applicable). 79 For more information, see http://www.doi.org/. For more information, see Open Access Guidelines for research results funded by the ERC. Other types of publications, such as non-peer-reviewed articles as well as non-peer reviewed monographs, books, conference proceedings and 'grey literature' (i.e. informally published material not having gone through a classic publishing process, e.g. reports), are not covered by the open access obligation. Best practice: However, to ensure fuller and wider access, beneficiaries are encouraged to provide open access also to these other types of scientific publications (where possible). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 ERC MGA 364 2. Open access to research data This option will be inserted in the GA only for ERC frontier research actions that opt-in to the open research data pilot on a voluntary basis (if foreseen in the ERC Work Programme). The rules on open access to research data are in principle the same as in the General MGA (see Article 29 H2020 General MGA). The ERC MGA has however the following specificities: For ERC actions, there is NO formal requirement for a ‘data management plan’. Annex 1 can make reference to a separate document in which the specification of the research data is provided (e.g. what data will be collected or generated; methodology and standards; whether and how this data will be shared and/or made open; how it will be curated and preserved). This separate document can be updated by the beneficiaries if necessary during the implementation of the action. Justification to open access exceptions to specific parts of the research data can also be provided through the separate document. Moreover, the exception allowing beneficiaries NOT to give access to specific parts of research data applies not only if this would jeopardise the main objective of the action, but any one of the action objectives. (For ERC frontier research actions, the main objective is always a purely scientific one. The justification for non-disclosure therefore does not need to be the scientific objective of the action but can refer to other objectives, such as the intended later commercialisation of the scientific findings.) The beneficiaries may opt out at any stage freeing themselves retroactively from the obligations associated with opting-in. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 ERC MGA 365 ARTICLE 32 — WORKING CONDITIONS FOR THE PRINCIPAL INVESTIGATOR[S] AND [HIS/HER][THEIR] TEAM ARTICLE 32 — WORKING CONDITIONS FOR THE PRINCIPAL INVESTIGATOR[S] AND [HIS/HER][THEIR] TEAM 32.1 Obligations towards the principal investigator[s] and [his/her][their] team The beneficiaries must respect the following working conditions for the principal investigator[s] and [his/her][their] team: (a) take all measures to implement the principles set out in the Commission Recommendation on the European Charter for Researchers and the Code of Conduct for the Recruitment of Researchers 36 — in particular regarding working conditions, transparent recruitment processes based on merit and career development — and ensure that the principal investigator[s], researchers and third parties involved in the action are aware of them; (b) enter — before signature of the Agreement — into a ‘supplementary agreement’ with the[ir] principal investigator, that specifies: (i) the obligation of the beneficiary to meet its obligations under the Agreement; (ii) the obligation of the [OPTION for SyG: corresponding] principal investigator to supervise the scientific and technological implementation of the action [OPTION for SyG: and the obligation of the other principal investigator(s) to supervise the scientific and technological implementation of their part of the action and to contribute to the overall proper implementation of the action]; (iii) the obligation of the [OPTION for SyG: corresponding] principal investigator to assume the responsibility for the scientific reporting for the beneficiary and contribute to the financial reporting [OPTION for SyG: and the obligation of the other principal investigator(s) to contribute to the scientific and financial reporting]; (iv) the obligation of the principal investigator to meet the time commitments for implementing the action as described in Annex 1; (v) the obligation of the principal investigator to apply the beneficiary’s usual management practices; (vi) the obligation of the principal investigator to inform the principal beneficiary [OPTION for SyG: and, where applicable, his/her beneficiary and the other principal investigator(s)] immediately of any events or circumstances likely to affect the Agreement (see Article 17) , such as: - a planned transfer of the action (or part of it) to a new beneficiary (see Article 56a); - any personal grounds affecting the implementation of the action; - any changes in the information that was used as a basis for signing the supplementary agreement; - any changes in the information that was used as a basis for awarding the grant; (vii) the obligation of the principal investigator to ensure the visibility of EU funding in communications or publications and in applications for the protection of results (see Articles 27, 28, 29 and 38); (viii) the obligation of the principal investigator to uphold the intellectual property rights of the beneficiary during the implementation of the action and afterwards; H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 ERC MGA 366 (ix) the obligation of the principal investigator to maintain confidentiality (see Article 36); (x) for a transfer of the action (or part of it) to a new beneficiary (see Article 56a): the obligation of the principal investigator to: - propose to the principal beneficiary [OPTION for SyG: and, where applicable, to his/her beneficiary] (in writing) to what extent the action will be transferred and the details of the transfer arrangement [OPTION for SyG: and, if the transfer is done by (one of) the other principal investigator(s), the obligation of the corresponding principal investigator to verify that the principal investigator has informed his/her beneficiary and the principal beneficiary]; - provide a statement to the principal beneficiary [OPTION for SyG: and, where applicable, his/her beneficiary] with the detailed results of the research up to the time of transfer; (xi) the right of the Commission and the Agency, the European Court of Auditors (ECA) and the European Anti-fraud Office (OLAF) to exercise their rights under Articles 22 and 23 also towards the principal investigator; (xii) the applicable law and the country in which disputes must be settled; (c) provide the principal investigator[s] with a copy of the signed Agreement; (d) guarantee the principal investigator[s] scientific independence, in particular for the: (i) use of the budget to achieve the scientific objectives; (ii) authority to publish as senior author and invite as co-authors those who have contributed substantially to the work; (iii) preparation of scientific reports for the action; (iv) selection and supervision of the other team members (hosted [and engaged] by the beneficiary or other legal entities), in line with the profiles needed to conduct the research and in accordance with the beneficiary’s usual management practices; (v) possibility to apply independently for funding; (vi) access to appropriate space and facilities for conducting the research; (e) provide — during the implementation of the action — research support to the principal investigator[s] and the[ir] team members (regarding infrastructure, equipment, access rights, products and other services necessary for conducting the research); (f) support the principal investigator[s] and provide administrative assistance, in particular for the: (i) general management of the work and his/her team (ii) scientific reporting, especially ensuring that the team members send their scientific results to the principal investigator[s]; (iii) financial reporting, especially providing timely and clear financial information; (iv) application of the beneficiary’s usual management practices; H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 ERC MGA 367 1. Working conditions — Rights for the PI and his/her team In view of the key role of the PI and his/her team in ERC actions, the ERC MGA foresees a series of obligations in order to guarantee best possible working conditions and scientific autonomy for them. Main obligations (towards the PI):  Scientific autonomy, to achieve the action’s objectives under the best possible conditions, and within the time agreed  Competitive working conditions, always in accordance with national law and institutional rules  Support for managing the action (e.g access to infrastructure; legal, financial and administrative support)  Access to and protection of intellectual property rights  Allow for transfer of the GA to another host institution (grant portability). 2. Supplementary agreement — Obligations on the PI The ERC MGA foresees that the PI and its host institution must sign a supplementary agreement (SA), in order to formalise the commitments in the GA also towards the PI. Main obligations (of the PI):  Supervision of the scientific and technological implementation of the action  Responsibility for the scientific reporting for the beneficiary and contribution to the financial reporting  Meeting the time commitments for implementing the action (v) general logistics of the action; (vi) access to the electronic exchange system (see Article 52); (g) inform the principal investigator[s] immediately (in writing) of any events or circumstances likely to affect the Agreement (see Article 17); (h) ensure that the principal investigator[s] enjoy[s] adequate: (i) conditions for annual, sickness and parental leave; (ii) occupational health and safety standards; (iii) insurance under the general social security scheme, such as pension rights; (i) allow the transfer of the Agreement to a new beneficiary (‘portability’; see Article 56a). […] 36 Commission Recommendation 2005/251/EC of 11 March 2005 on the European Charter for Researchers and on a Code of Conduct for the Recruitment of Researchers (OJ L 75, 22.3.2005.p.67). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 ERC MGA 368 The percentages for time commitments should be established with reference to the total productive hours worked by the PI for all his/her employers. The total productive hours should be calculated in accordance with Article 6. The percentages must be reached for the action duration ( not annually or per reporting period).  Applying the beneficiary’s usual management practices  Informing the principal beneficiary immediately of any events or circumstances likely to affect the GA  Ensure the visibility of EU funding  Upholding the intellectual property rights of the beneficiary This obligation is not limited to respecting the host institution’s intellectual property rights (IPRs). The PI must actively inform it, if s/he becomes aware of any violation of the latter’s IPRs related to the project. Example: The PI reads a research article and discovers a violation of the host institution’s IPRs related to the project. S/he is obliged to inform the host institution.  Maintaining confidentiality. The ‘supplementary agreement’ is an agreement between the beneficiary and the PI, to set out their internal arrangements for implementing the grant. It is purely internal; the EU/Euratom is not party and has NO responsibility for it (nor for any adverse consequences). It should cover all the practical issues that may arise in the context of the grant implementation (in particular the ones listed in Article 32.1(b)) and must last at least for the action duration (see Article 3) (— without any interruptions, even if the PI works only part-time on the ERC project). The supplementary agreement must NOT contain any provisions contrary to the GA. (Provisions that contradict the GA are considered void and cannot be opposed to the Agency.) It can NOT replace an employment or engagement contract between the PI and its host institution (which remain necessary under national labour and social laws). The supplementary agreement must be concluded before GA signature (and a copy must be sent to the Agency). A model supplementary agreement is available. (The model is not mandatory; beneficiaries may use other clauses, provided they benefit the research action and do not contradict the GA.) Specific cases (supplementary agreement): PI employed/engaged by a third party — The supplementary agreement must be signed by the PI, the host institution and the third party. Several PIs — For ERC Synergy grants (i.e. ERC frontier research or PoC grants with several PIs), each host institution must conclude a supplementary agreement with the PI(s) they engage. No supplementary agreement — NO supplementary agreement is needed for ERC PoC grants. PI entitled to sign the supplementary agreement — If the PI is entitled to sign the supplementary agreement on behalf of the host institution (because of his/her position in the institution), the supplementary agreement must be counter-signed by another person empowered by the institution (i.e. the principal investigator cannot sign his/her own supplementary agreement for both parties). Grant portability — If the GA is transferred to another host institution (see Article 56a) a new supplementary agreement must be signed with the new host institution (and forwarded to the Agency). The GA cannot be amended before the PI has sent the new supplementary agreement. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 ERC MGA 369 ARTICLE 38 — PROMOTING THE ACTION — VISIBILITY OF EU FUNDING 1. Visibility of EU funding For ERC actions, the same rules on visibility of EU funding apply as in the General MGA (see Articles 27.3, 28.2, 29.4 and 38.1.2 H2020 General MGA). In addition, the beneficiaries must however make specific reference to the European Research Council (ERC). Thus, the clause acknowledging funding is slightly adapted and the beneficiaries must also use the ERC logo. ARTICLE 38 — PROMOTING THE ACTION — VISIBILITY OF EU FUNDING […] 38.1.2 Information on EU funding — Obligation and right to use the EU emblem and the ERC logo Unless the Agency requests or agrees otherwise or unless it is impossible, any communication activity related to the action (including in electronic form, via social media, etc.) and any infrastructure, equipment and major results funded by the grant must: (a) display the EU emblem and the ERC logo and (b) include the following text: For communication activities: “This project has received funding from the European Research Council (ERC) under the European Union’s Horizon 2020 research and innovation programme (grant agreement No [number])”. For infrastructure, equipment and major results: “This [infrastructure][equipment][insert type of result] is part of a project that has received funding from the European Research Council (ERC) under the European Union’s Horizon 2020 research and innovation programme (grant agreement No [number])”. When displayed together with another logo, the EU emblem and the ERC logo must have appropriate prominence. For the purposes of their obligations under this Article, the beneficiaries may use the EU emblem and the ERC logo without first obtaining approval from the Agency. This does not, however, give them the right to exclusive use. Moreover, they may not appropriate the EU emblem, the ERC logo or any similar trademark or logo, either by registration or by any other means. […] For more information on using the ERC logo, see the ERC homepage H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 ERC MGA 370 ARTICLE 56 — ACCESSION TO THE AGREEMENT 1. Addition of new beneficiaries For ERC actions, the rules on addition of beneficiaries are in principle the same as in the General MGA (see Article 56 H2020 General MGA). However, unlike the General MGA, ERC mono-beneficiary grants can become multi-beneficiary grants, by addition of a new beneficiary according to this provision. MULTI-BENEFICIARY: ARTICLE 56 — ACCESSION TO THE AGREEMENT 56.1 Accession of the beneficiaries mentioned in the Preamble The other beneficiaries must accede to the Agreement by signing the Accession Form (see Annex 3) in the electronic exchange system (see Article 52) within 30 days after its entry into force (see Article 58) [OPTION if Article 14 applies and joint and several liability has been requested: and, for beneficiaries for which the [Commission][Agency] has requested joint and several liability of a linked third party, by also submitting — at accession — a declaration on joint and several liability (see Annex 3a) signed by the third party]. They will assume the rights and obligations under the Agreement with effect from the date of its entry into force (see Article 58). If a beneficiary does not accede to the Agreement within the above deadline, the principal beneficiary must — within 30 days — request an amendment to make any changes necessary to ensure proper implementation of the action. This does not affect the Agency’s right to terminate the Agreement (see Article 50). 56.2 Addition of new beneficiaries In justified cases, the beneficiaries may request the addition of a new beneficiary. For this purpose, the principal beneficiary must submit a request for amendment in accordance with Article 55. It must include an Accession Form (see Annex 3) signed by the new beneficiary in the electronic exchange system (see Article 52). New beneficiaries must assume the rights and obligations under the Agreement with effect from the date of their accession specified in the Accession Form (see Annex 3). MONO-BENEFICIARY: ARTICLE 56 — ACCESSION TO THE AGREEMENT 56.1 Addition of new beneficiaries In justified cases, the beneficiary may request the addition of a new beneficiary. For this purpose, the beneficiary must submit a request for amendment in accordance with Article 55. It must include an Accession Form (see Annex 3) signed by the new beneficiary in the electronic exchange system (see Article 52). New beneficiaries must assume the rights and obligations under the Agreement with effect from the date of their accession specified in the Accession Form (see Annex 3). If a new beneficiary is added, the grant becomes a multi-beneficiary grant and [OPTION: the preamble and the following Articles of the ERC Multi-beneficiary Model Grant Agreement will apply: […][…][…][same for further articles]][OPTION: the ERC Multi-beneficiary Model Grant Agreement will apply]. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 ERC MGA 371 ARTICLE 56a — TRANSFER OF THE AGREEMENT TO A NEW BENEFICIARY — PORTABILITY OF THE GRANT 1. Transfer of the GA (portability) ERC grants can be transferred to a new beneficiary — at any time during the action implementation. The transfer may be based on any ground that is beneficial for the PI and supports achieving the action’s objectives. The former host institution may oppose a transfer only if it is not allowed under national law. It may however negotiate the transfer conditions (including transfer of team members, intellectual property rights and equipment) with the new host institution, taking into account the view of the PI. The rights and obligations under the GA are transferred from the beneficiary to a new beneficiary — without passing via ‘termination’ (Article 50) or ‘addition of a new beneficiary’ (Article 56). NO transfer before the amendment has been accepted by the Agency. Transfers without a formal amendment are considered in breach of contractual obligations and may result in costs being declared ineligible and/or the Agency terminating the action early. ARTICLE 56a — TRANSFER OF THE AGREEMENT TO A NEW BENEFICIARY — PORTABILITY OF THE GRANT 56a.1 Conditions [The][A] principal investigator may request the transfer of the action (or his/her part of it) to a new beneficiary, provided that the objectives of the action remain achievable. The principal beneficiary [OPTION for SyG: or, where applicable, his/her beneficiary] may object only on the basis that the transfer is not possible under national law. 56a.2 Procedure The principal beneficiary must formally notify a request for amendment to the Agency (see Article 55). 56a.3 Effects The former beneficiary must agree with the principal investigator and the new beneficiary on a plan to transfer the intellectual property rights under the Agreement to the new beneficiary The Agency will request the former beneficiary to transfer to the new beneficiary any part of the pre- financing (see Article 21) not covered by an approved financial report. If requested by the principal investigator, the Agency may require the former beneficiary to transfer to the new beneficiary the equipment purchased and used exclusively for the action (against reimbursement of the costs that have not yet been depreciated). The former beneficiary may object only on the basis that the transfer is not possible under national law. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 ERC MGA 372 2. Procedure The PI should first contact the beneficiary that signed the GA (i.e. the former host institution). Best practice: Beneficiaries and PIs should keep records of the consultation and decision-making process for each portability case. The former host institution must submit a request for amendment to the Agency. For the amendment the rules of the General MGA apply (see Article 55 H2020 General MGA). The ‘transfer date’ will be added to the Preamble of the GA. The beneficiaries must select the date in their amendment request. (If the new beneficiary joins the action, the transfer date must be the same date as the accession date. Retroactive dates are allowed only in exceptional cases and with a specific justification.) Best practice: For a retroactive transfer date, the beneficiaries should contact the Agency in advance (via the Participant Portal messages function). 3. Effects After the amendment, the Agency will calculate the eligible costs of the former host institution and instruct it to transfer the remaining pre-financing (not covered by eligible costs) to the new host institution. If the former host institution spent all the pre-financing payment (see Article 21.2), the Agency will NOT pay out any additional pre-financing to the new host institution. The new host institution will have to advance the funds and its eligible costs will only be reimbursed up to the maximum grant amount set out in Article 5.1. Financial reporting periods will be adapted to take into account the exact date of the transfer (if necessary). Scientific reporting periods will usually remain unchanged (since the transfer normally has no effect on the scientific implementation of the action). A certificate on the financial statement (CFS) must be submitted by the former host institution prior to the last reporting period if it reached the threshold set up in Article 20. If the PI’s requests it, the Agency may require the former host institution to transfer the equipment purchased and used exclusively for the action. The former host institution may oppose this only if it is not possible under national law. It may however negotiate the transfer conditions with the new host institution, taking into account the view of the PI. Thus, the new host institution should make its best effort to buy the equipment fully used for the project. If it does so, it may in principle declare the costs of this reimbursement and any other related costs (i.e. dismantling, transfer and installation), if they fulfil the eligibility conditions set out in Article 6. Specific cases (portability): Several PIs— In ERC synergy grants (i.e. ERC frontier research or PoC grants with several PIs), each PI has the right to transfer his/her part of the action. They must inform and consult the other PIs, to ensure that the action’s objectives can still be achieved. Former host institution remains beneficiary — If certain team members (or equipment) stay with the former host institution, it may remain party to the GA (as an additional beneficiary); the new beneficiary that hosts and engages the PI will become the new host institution. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 ERC MGA PoC 373 II.3 H2020 ERC MGA PoC: Annotations The H2020 ERC MGA PoC is very similar to the H2020 ERC MGA. Like the ERC frontier research grants, the ERC PoC grants have a principal beneficiary (who is also the host institution) and a principal investigator. There are however NO specific provisions on the working conditions of the PI and his/her team (Article 32 H2020 ERC MGA), no supplementary agreement and no grant portability (Article 56a H2020 ERC MGA). The following annotations will only highlight the biggest differences. For the rest, the annotations to the ERC MGA apply mutatis mutandis. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 ERC MGA PoC 374 ARTICLE 2 — ACTION TO BE IMPLEMENTED 1. ERC PoC actions What? ERC PoC funds:  a ‘proof of concept’ to verify the innovation potential of an idea from an ERC frontier research project. ERC PoC grants can cover any activities that develop research output towards new commercial or societal applications (e.g. making a ‘business plan’, technical issues and overall direction, intellectual property rights positioning and strategy, budgeting and other commercial parameters; connections to later stage funding; establishing a company; demonstration, testing, prototyping, piloting, design). ERC PoC grants can NOT cover activities under the ERC frontier research grant (e.g. dissemination or publications of the results of the ERC frontier research action; pure research, especially research with no commercial potential) or activities which are the result of research not performed under the ERC actions (e.g. results of research not found by the ERC action). ERC PoC actions are normally mono-beneficiary actions, but can also be multi-beneficiary. ERC actions are funded under Part I of the Horizon 2020 Framework Programme, ‘European Research Council’ (e.g. ERC-2015-PoC). ARTICLE 2 — ACTION TO BE IMPLEMENTED [— COMPLEMENTARY GRANT] [— JOINTLY FUNDED ACTION] The grant is awarded for the action entitled [insert title of the action] — [insert acronym] (‘action’), as described in Annex 1. For more information on ERC actions, see the Online Manual and the H2020 grants fact sheets on the Participant Portal. For more information on the conditions for participation and funding, see the Online Manual, the ERC home page or the ERC Work Programme and the call and topics pages of the call. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 ERC MGA PoC 375 ARTICLE 20 — REPORTING — PAYMENT REQUESTS 20.1 Obligation to submit reports The principal beneficiary must submit to the Agency (see Article 52) the report(s) set out in this Article. The financial report(s), include(s) the request(s) for payments. The report(s) must be drawn up using the forms and templates provided in the electronic exchange system (see Article 52). [OPTION by default (for actions with one RP): 20.2 Reporting periods The action has one reporting period: - RP: from month 1 to month [X] 20.3 Report — Request for payment of the balance The principal beneficiary must — within 60 days following the end of the reporting period — submit a report to the Agency. The report must include the following: (a) a summary for publication by the Agency; (b) an overview of the results of the action, including the deliverables identified in Annex 1 and explanations justifying the differences between the work expected to be carried out in accordance with Annex 1 and that actually carried out; (c) detailed information on the costs declared, including a ‘breakdown of direct costs table’; (d) an ‘individual financial statement’ (see Annex 4) from each beneficiary [and from each linked third party]. The individual financial statement must detail the eligible costs (actual costs, unit costs, flat- rate costs; see Article 6) for each budget category (see Annex 2). The beneficiaries [and linked third parties] must declare all eligible costs, even if — for actual costs, unit costs and flat-rate costs — they exceed the amounts indicated in the estimated budget (see Annex 2). Amounts which are not declared in the individual financial statement will not be taken into account by the Agency. The individual financial statements must also detail the receipts of the action (see Article 5.3.3). Each beneficiary [and each linked third party] must certify that: - the information provided is full, reliable and true; - the costs declared are eligible (see Article 6); - the costs can be substantiated by adequate records and supporting documentation (see Article 18) that will be produced upon request (see Article 17) or in the context of checks, reviews, audits and investigations (see Article 22), and - that all the receipts have been declared (see Article 5.3.3). ARTICLE 20 — REPORTING — PAYMENT REQUESTS H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 ERC MGA PoC 376 (e) [OPTION if the JRC is a beneficiary: information on the amount of each interim payment and payment of the balance to be paid by the Agency to the Joint Research Centre (JRC);][OPTION: not applicable;] (f) a ‘summary financial statement’ (see Annex 4), created automatically by the electronic exchange system, consolidating the individual financial statements for the reporting period concerned and including the request for payment of the balance; (g) a ‘certificate on the financial statements’ (drawn up in accordance with Annex 5) for each beneficiary [and linked third party], if it requests a total contribution of EUR 325 000 or more, as reimbursement of actual costs and unit costs calculated on the basis of its usual cost accounting practices (see Article 5.2 and Article 6.2, Point A)] [OPTION for actions with several RPs: 20.2 Reporting periods The action is divided into the following reporting periods: - RP1: from month 1 to month [X] [- RP2: from month [X+1] to month [Y] - RP3: from month [Y+1] to month [Z] [same for other RPs] - RPN: from month [N+1] to [the last month of the project].] 20.3 Periodic reports — Requests for interim payments and payment of balance The principal beneficiary must — within 60 days following the end of each reporting period — submit a periodic report to the Agency. The periodic report must include the following: (a) a summary for publication by the Agency; (b) an overview of the progress of work towards the objectives of the action, including the deliverables identified in Annex 1 and explanations justifying the differences between work expected to be carried out in accordance with Annex 1 and that actually carried out; (c) detailed information on the costs declared, including a ‘breakdown of direct costs table’ and a ‘budget follow-up table’; (d) an ‘individual financial statement’ (see Annex 4) from each beneficiary [and from each linked third party], for the reporting period concerned. The individual financial statement must detail the eligible costs (actual costs, unit costs and flat-rate costs; see Article 6) for each budget category (see Annex 2). The beneficiaries [and linked third parties] must declare all eligible costs, even if — for actual costs, unit costs and flat-rate costs — they exceed the amounts indicated in the estimated budget (see Annex 2). Amounts which are not declared in the individual financial statement will not be taken into account by the Agency. If an individual financial statement is not submitted for a reporting period, it may be included in the periodic report for the next reporting period. The individual financial statements of the last reporting period must also detail the receipts of the action (see Article 5.3.3). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 ERC MGA PoC 377 Each beneficiary [and each linked third party] must certify that: - the information provided is full, reliable and true; - the costs declared are eligible (see Article 6); - the costs can be substantiated by adequate records and supporting documentation (see Article 18) that will be produced upon request (see Article 17) or in the context of checks, reviews, audits and investigations (see Article 22), and - for the last reporting period: that all the receipts have been declared (see Article 5.3.3); (e) [OPTION if the JRC is a beneficiary: information on the amount of each interim payment and payment of the balance to be paid by the Agency to the Joint Research Centre (JRC);][OPTION: not applicable;] (f) a ‘periodic summary financial statement’ (see Annex 4), created automatically by the electronic exchange system, consolidating the individual financial statements for the reporting period concerned and including the request for interim payment (or — for the last reporting period — the request for payment of the balance); (g) for the last reporting period only: - an overview of the results of the action, including the deliverables identified in Annex 1 and explanations justifying the differences between the work expected to be carried out in accordance with Annex 1 and that actually carried out; - a ‘certificate on the financial statements’ (drawn up in accordance with Annex 5) for each beneficiary [and linked third party], if it requests a total contribution of EUR 325 000 or more, as reimbursement of actual costs and unit costs calculated on the basis of its usual cost accounting practices (see Article 5.2 and Article 6.2, Point A).] 20.4 Currency for financial statements and conversion into euro Financial statements must be drafted in euro. Beneficiaries [and linked third parties] with accounting established in a currency other than the euro must convert the costs recorded in their accounts into euro, at the average of the daily exchange rates published in the C series of the Official Journal of the European Union, calculated over the corresponding reporting period. If no daily euro exchange rate is published in the Official Journal of the European Union for the currency in question, they must be converted at the average of the monthly accounting rates published on the Commission’s website, calculated over the corresponding reporting period. Beneficiaries [and linked third parties] with accounting established in euro must convert costs incurred in another currency into euro according to their usual accounting practices. 20.5 Language of reports The report(s) (including financial statements) must be submitted in the language of the Agreement. 20.6 Consequences of non-compliance — Suspension of the payment deadline — Termination If the report(s) submitted do not comply with this Article, the Agency may suspend the deadline for payment (see Article 47) and apply any of the other measures described in Chapter 6. If the principal beneficiary breaches its obligation to submit the reports and if it fails to comply with this obligation within 30 days following a written reminder sent by the Agency, the Agreement may be terminated (see Article 50). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 ERC MGA PoC 378 1. Report(s) When & What? For ERC PoC actions, the principal beneficiary must submit reports — only one ‘report’ if there is one reporting period, otherwise one ‘periodic report’ at the end of each reporting period. The report (or periodic reports) must include the all of the following:  a summary for publication by the Agency The summary is a brief description of the action, presenting its objectives and the results achieved. It must be easy to read and understandable to a non-specialised audience. This will enable the Agency to publish it on the Commission’s website right away. The principal beneficiary must ensure that material submitted to the Agency for publication does not include any confidential material.  an overview of progress towards the action’s objectives (or an overview of the action’s results for the last reporting period)  information on the eligible costs, including a table showing the breakdown of direct costs and a budget follow-up table  an individual financial statement. In addition, a ‘(periodic) summary financial statement’, which counts as the request of payment, will be created automatically by the IT system, on the basis of all financial statements submitted by the beneficiaries and linked third parties for each reporting period. Moreover, for the last reporting period, a ‘certificate on the financial statements (CFS)’ will have to be added (if necessary). How? All reports must be prepared and submitted directly in the Participant Portal (see Article 52). 2. Reporting period(s) ERC PoC actions normally have only one reporting period (with one pre-financing payment; see Article 21). As a general rule, this single reporting period lasts 18 months (and thus the entire action duration). If provided in the GA, an ERC PoC action may however also have more reporting periods. H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA 379 III. Marie Skłodowska-Curie Actions (MSCA) MGAs III.1 Background information and approach The Marie Skłodowka-Curie (MSCA) Model Grant Agreements are used for grants for MSCA only, i.e.:  MSCA-ITN  MSCA-IF  MSCA-RISE and  MSCA-COFUND. The MSCA MGAs follow the General MGA for numbering and content, except for: The H2020 MGA MSC-ITN deviates from the General MGA as follows:  Article 4.2 (MSC-ITN specific conditions for budget transfers)  Article 5.2 (specific reimbursement rate and form of costs)  Article 5.3 (no Step 3 (reduction due to the no-profit rule))  Article 6 (specific conditions for eligibility of costs)  Articles 8-16, 41.4 and 41.5 (not applicable)  Article 18.1.2 (record keeping only for number of units declared and amounts paid to researchers)  Article 19 (MSC-ITN specific deliverables)  Articles 20.4 (no certificate)  Article 20.6 (currency for financial statement)  Article 21.7 (option for periodic instalments for distribution of payments by coordinator)  Article 25.5 and 31.6 (access rights for researchers)  Articles 27.3, 28.2, 29.2, 29.4 and 38.1.2 (reference to MSC funding)  Article 32 (specific obligations for recruitment and working conditions)  Article 38.1.1 (reference to ‘mainstream media coverage’)  Annex 2 Model for the estimated budget for the action  Annex 4 Model for the financial statement  Annexes 5 and 6 (not applicable) H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA 380 The H2020 MGA MSC-IF deviates from the General MGA as follows:  Article 3 (notified starting date)  Articles 4.2, 8-16, 41.4 and 41.5 (not applicable)  Article 5.2 (specific reimbursement rate and form of costs)  Article 5.3 (no Step 3 (reduction due to the no-profit rule))  Article 6 (specific conditions for eligibility of costs)  Article 18.1.2 (record keeping only for number of units declared and amounts paid to researchers)  Articles 20.3 and 20.4 (options for reporting in case of only one RP; no certificate)  Article 20.6 (currency for financial statement)  Article 25.5 and 31.6 (access rights for the researcher)  Articles 27.3, 28.2, 29.2, 29.4 and 38.1.2 (reference to MSC funding)  Article 32 (specific obligations for recruitment and working conditions)  Article 38.1.1 (reference to ‘mainstream media coverage’)  Article 49.1 (MSC-IF specific conditions for suspension of the action implementation)  Article 50.3 (MSC-IF specific conditions for termination)  Article 55 (MSC-IF specific conditions for amendments )  Article 56a (MSC-IF portability)  Annex 2 Model for the estimated budget for the action  Annex 4 Model for the financial statement  Annexes 3, 5 and 6 (not applicable) The H2020 MGA MSC-RISE deviates from the General MGA as follows:  Article 4.2 (specific conditions for budget transfer)  Article 5.2 (specific reimbursement rate and form of costs)  Article 5.3 (no ‘Step 3 (reduction due to the no-profit rule)’)  Article 6 (specific conditions for eligibility of costs)  Articles 8-16, 41.4 and 41.5 (not applicable)  Article 18.1.2 (record keeping only for number of units declared )  Article 19 (MSC-RISE specific deliverables)  Articles 20.4 (no certificate)  Article 20.6 (currency for financial statement)  Article 25.5 and 31.6 (access rights for staff members)  Articles 27.3, 28.2, 29.2, 29.4 and 38.1.2 (reference to MSC funding)  Article 32 (MSC specific obligations for recruitment and working conditions)  Article 38.1.1 (reference to ’mainstream media coverage’)  Annex 2 Model for the estimated budget for the action  Annex 4 Model for the financial statement  Annexes 5 and 6 (not applicable) H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA 381 The annotations will concentrate on differences in substance and interpretation that require explanation. Parts that do not apply or differ only in presentation (e.g. Articles 8-14, Annexes) will not be shown. By contrast, provisions that do not deviate from the General MGA, but that require clarification or a specific interpretation for MSCA are added:  Article 2 (MSCA-ITN; MSCA-IF; MSCA-RISE; MSCA-COFUND)  Article 4.1 (MSCA-ITN budget categories; MSCA-IF budget categories ; MSCA-RISE budget categories; MSCA-COFUND budget categories)  Article 8 (MSCA-ITN rules on third party involvement; MSCA-IF rules on third party involvement; MSCA-RISE rules on third party involvement; MSCA-COFUND rules on third party involvement) The H2020 MSC-COFUND deviates from the General MGA as follows:  Article 4.2 (not applicable)  Article 5.2 (specific reimbursement rate and form of costs)  Article 5.3 (no ‘Step 3 (reduction due to the no-profit rule))  Article 6 (specific conditions for eligibility of costs)  Articles 8-14, 16, 32, 41.4 and 41.5 (not applicable)  Article 15 (provisions for support to or implementation of programmes)  Article 18.1.2 (record keeping only for number of units declared and amounts paid to researchers)  Article 19 (MSC-COFUND specific deliverables)  Article 20.4 (no certificate)  Article 20.6 (currency for financial statement)  Articles 27.3, 28.2, 29.2, 29.4 and 38.1.2 (reference to MSC funding)  Article 38.1.1 (reference to ‘mainstream media coverage’)  Annex 2 Model for the estimated budget for the action  Annex 4 Model for the financial statement  Annexes 3, 5 and 6 (not applicable) H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-ITN 382 III.2 H2020 MGA MSCA-ITN: Annotations ARTICLE 2 — ACTION TO BE IMPLEMENTED 1. Action: MSCA-ITN What? MSCA-ITN funds: − joint research training and/or doctoral programmes for early-stage researchers (implemented by ‘networks’ of beneficiaries from the academic and the non-academic sector from different countries). MSCA-ITN take the form of European Training Networks (ETN), European Industrial Doctorates (EID) or European Joint Doctorates (EJD). MSCA-ITN are multi-beneficiary actions. They are funded under Part I of the Horizon 2020 Framework Programme, ‘Marie Skłodowska- Curie actions’ (e.g. H2020-MSCA-ITN-2015). ARTICLE 2 — ACTION TO BE IMPLEMENTED [— COMPLEMENTARY GRANT] [— JOINTLY FUNDED ACTION] The grant is awarded for the action entitled [insert title of the action] — [insert acronym] (‘action’), as described in Annex 1. For more information on MSCA-ITN, see the Online Manual and the H2020 grants fact sheets on the Participant Portal. For more information on the conditions for participation and funding, see the Online Manual or the Main Work Programme — MSCA and the call and topics pages of the call. H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-ITN 383 ARTICLE 4 — ESTIMATED BUDGET AND BUDGET TRANSFERS 1. Budget categories The MSCA-ITN MGA does not use the budget categories of the General MGA. Budget categories of the MSCA-ITN MGA:  costs for recruited researchers  institutional costs. 2. Budget transfers The beneficiaries may re-distribute person-months between them (as compared with the original planning set out in Annex 2). This re-distribution can be done without requesting an amendment (see Article 55) provided that it does not imply a substantial change to the action as described in Annex 1. Best practice: The coordinator should inform the Agency in advance of any redistribution of person-months, in order to establish if an amendment is needed. Changes that only concern the consortium-internal arrangements on the distribution of the institutional unit cost for management tasks do NOT need to be notified to the Agency. Example: Beneficiary X was unable to implement six person-months, so the consortium informs REA of a redistribution of these months to beneficiary Y. REA agreed to this, but since beneficiary Y is located in a country where a higher country coefficient correction applies than in the country of beneficiary X, the budget transfer can only give 4.5 months to beneficiary Y. The budget categories are relevant for the estimated budget (Article 4 and Annex 2), forms of costs (Article 5), cost eligibility rules (Article 6.2) and the cost declarations (i.e. financial statements; Article 20 and Annex 4). . The maximum grant amount (see Article 5) can however NEVER be increased. . ARTICLE 4 — ESTIMATED BUDGET 4.1 Estimated budget The ‘estimated budget’ for the action is set out in Annex 2. It contains the estimated eligible costs and the forms of costs, broken down by beneficiary and budget category (see Articles 5, 6). 4.2 Budget transfers The estimated budget breakdown indicated in Annex 2 may be adjusted by transfers of amounts between beneficiaries. This does not require an amendment according to Article 55, if the action is implemented as described in Annex 1. [OPTION for all actions except EID: However, no more than 40 % of the maximum grant amount (see Article 5.1) may be allocated to beneficiaries located in the same country or to any one international European interest organisation or international organisation.] H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-ITN 384 A re-distribution of person-months will also have an impact on the institutional unit costs (since they are also paid according to the person-months declared for recruited researchers). Re-distributions are subject to the following:  no impact on the action as described in Annex 1 If the transfer of person-months implies a substantial change to the action as described in Annex 1, a formal amendment (see Article 55) will be required.  correct application of the country correction coefficient  the minimum and maximum recruitment durations per researcher  for all actions except for EID: the 40 % limit of budget allocated to beneficiaries established in the same country or to the same international European interest organisation or international organisation. The 40% is determined on the basis of the maximum grant amount. Example: In a project with a maximum grant amount of EUR 3 000 000, beneficiaries from one country may not receive more than EUR 1 200 000 (=40%). However, if the final grant amount is lower (e.g. because beneficiaries from other countries implement less person-months than expected) the original 40% ceiling of EUR 1 200 000 will be maintained (beneficiaries will not be penalised for the non-execution of person-months by other beneficiaries). Transfers between budget categories are formally NOT possible, because all budget categories are all linked to the same person-months declared for the recruited researchers. (It is therefore technically not possible to move budgeted amounts from one budget category to another.) Budget flexibility — Since MSCA-ITN uses unit costs, there is however some flexibility as regards the use of the amounts received:  The unit costs for recruited researchers (i.e. living, mobility and family allowances) must be fully used for each researcher. They can NOT be used to pay other researchers or other types of costs (see Article 6.2.A(c)).  The unit cost for research, training and networking should be used for the research, training and networking activities foreseen in Annex 1, but unused amounts may be used for other action- related purposes, for instance to increase the salary of a researcher or to organise additional training activities.  The unit cost for management and indirect costs should be used for the management of the action, but unused amounts may also be used for other action-related purposes, for example, to increase the salary of a researcher. Re-distributions of management and indirect costs within the consortium are allowed, but should be done via an internal agreement and should roughly correspond to the actual division of (management) tasks within the consortium. Management and indirect costs should also be shared with partner organisations which incurred management or indirect costs for secondments (see Article 8). . H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-ITN 385 ARTICLE 5 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATES AND FORMS OF COSTS 1. Reimbursement rate How much? For MSCA-ITN, the reimbursement rate is set at 100 % (see the Main Work Programme — MSCA). 2. Cost forms The MSCA MGAs do not use the cost forms of the General MGA, but the unit costs set out in Commission Decision C(2013) 819480. For MSCA-ITN these are unit costs for:  costs for recruited researchers: living allowance, mobility allowance and family allowance (if any)  institutional costs: research, training and networking costs and management and indirect costs. These are fixed amounts that must be multiplied by the number of months the recruited researchers spent on research training activities (‘person-months’); they can NOT be changed. The conditions for eligibility are set out in Article 6. 80 Commission Decision C(2013) 8194 authorising the use of reimbursement on the basis of unit costs authorising the use of reimbursement on the basis of unit costs for Marie Skłodowska-Curie actions under the Horizon 2020 Framework Programme. Available at: http://ec.europa.eu/research/participants/data/ref/h2020/other/legal/unit_costs/unit-costs_msca_en.pdf ARTICLE 5 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATE AND FORM OF COSTS […] 5.2 Form of grant, reimbursement rate and form of costs The grant reimburses 100 % of the action’s eligible costs (see Article 6) (‘reimbursement of eligible costs grant’) (see Annex 2). The estimated eligible costs of the action are EUR [insert amount (insert amount in words)]. Eligible costs (see Article 6) must be declared under the following form (‘form of costs’): (a) for costs for recruited researchers (living, mobility and family allowances): on the basis of the amount(s) per unit set out in Annex 2 (‘unit costs’) and (b) for institutional costs (research, training and networking costs and management and indirect costs): on the basis of the amount per unit set out in Annex 2 (unit costs). H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-ITN 386 1. Final grant amount For MSCA, the rules on the calculation of the final grant amount are in principle the same as in the General MGA (see Article 5.3 H2020 General MGA). However, since MSCA use only unit costs, there is NO reduction due to the no-profit rule in MSCA MGAs (Step 3 of Article 5.3 of the General MGA). 5.3 Final grant amount — Calculation The ‘final grant amount’ depends on the actual extent to which the action is implemented in accordance with the Agreement’s terms and conditions. This amount is calculated by the Agency — when the payment of the balance is made (see Article 21.4) — in the following steps: Step 1 — Application of the reimbursement rate to the eligible costs Step 2 — Limit to the maximum grant amount Step 3 — Reduction due to improper implementation or breach of other obligations 5.3.1 Step 1 — Application of the reimbursement rates to the eligible costs The reimbursement rate (see Article 5.2) is applied to eligible costs (unit costs; see Article 6) declared by the beneficiaries and approved by the Agency (see Article 21). 5.3.2 Step 2 — Limit to the maximum grant amount If the amount obtained following Step 1 is higher than the maximum grant amount set out in Article 5.1, it will be limited to the latter. 5.3.3 Step 3 — Reduction due to improper implementation or breach of other obligations — Reduced grant amount — Calculation If the grant is reduced (see Article 43), the Agency will calculate the reduced grant amount by deducting the amount of the reduction (calculated in proportion to the improper implementation of the action or to the seriousness of the breach of obligations in accordance with Article 43.2) from the maximum grant amount set out in Article 5.1. The final grant amount will be the lower of the following two: - the amount obtained following Steps 1 and 2 or - the reduced grant amount following Step 3. […] H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-ITN 387 ARTICLE 6 — ELIGIBLE AND INELIGIBLE COSTS 1. Eligible costs The grant can only reimburse eligible costs (i.e. costs that comply with the general and specific conditions set out in this Article) (‘reimbursement of eligible costs grant’). Article 6.1 refers to general eligibility conditions applicable per cost form (for MSCA: only unit costs; see Article 5). Article 6.2 refers to specific eligibility conditions applicable per budget category (see Article 4). 2. General conditions for unit costs to be eligible The general conditions for eligibility of unit costs are the same as in the General MGA (see Article 6.1 H2020 General MGA). ONLY eligible costs may be entered into the estimated budget for the action (see Article 4) or declared in the financial statements (see Article 20). Moreover, the burden on proof for eligibility is on the beneficiary (and linked third parties). They must keep sufficient supporting documents (see Article 18) to show that the person-months they declare are eligible. Compliance with eligibility rules may be subject to a check or audit by the Commission/Agency. Any ineligible costs found will be rejected (see Article 42). . ARTICLE 6 — ELIGIBLE AND INELIGIBLE COSTS 6.1 General conditions for costs to be eligible Unit costs are eligible (‘eligible costs’) if: (a) they are calculated as follows: {amounts per unit set out in Annex 2 multiplied by the number of actual units}. (b) the number of actual units complies with the following: - the units must be actually used or produced in the period set out in Article 3; - the units must be necessary for implementing the action or produced by it, and - the number of units must be identifiable and verifiable, in particular supported by records and documentation (see Article 18). H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-ITN 388 1. Specific conditions for costs to be eligible Article 6.2 refers to specific eligibility conditions applicable per budget category. The MSCA MGAs have their own budget categories, with their own types of costs, conditions for eligibility and rules for cost calculation. For ease of reference, the annotations for Article 6.2 will summarise — for each budget category — the information necessary to establish the eligible costs, i.e.  types of costs covered by the budget category  cost form under which the costs must be declared (for MSCA: unit costs)  conditions for eligibility  how the costs must be calculated. 6.2 Specific conditions for costs to be eligible Costs are eligible, if they comply with the general conditions (see above) and the specific conditions set out below for each of the following two budget categories: H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-ITN 389 A. Costs for recruited researchers (A.1 Living allowance, A.2 Mobility allowance and A.3 Family allowance) are eligible, if: (a) the number of units declared: (i) corresponds to the actual number of months spent by the recruited researchers on the research training activities and (ii) does not exceed 36 months (per researcher)[;][, and] (iii) [OPTION for EID: are, for each researcher, spent to at least 50 % with one or more beneficiaries or partner organisations from the non-academic sector.] (b) the recruited researchers comply with the following conditions: (i) be recruited by the beneficiary under an employment contract (or other direct contract with equivalent benefits, including social security coverage) or — if not otherwise possible under national law — under a fixed-amount-fellowship agreement with minimum social security coverage; (ii) be employed for at least 3 months; (iii) be employed full-time, unless the Agency has approved a part-time employment for personal or family reasons; (iv) be working exclusively for the action; (v) not have resided in the country where the research training activities take place for more than 12 months in the 3 years immediately prior to the recruitment date (and not have carried out their main activity (work, studies, etc.) in that country). For beneficiaries that are the international European interest organisations or international organisations: not have spent with the beneficiary more than 12 months in the 3 years immediately prior to the recruitment date; (vi) be — at the date of recruitment — an ‘early stage researcher’ (i.e. in the first four years of his/her research career and not have a doctoral degree); (vii) [OPTION for EJD: be enrolled in a doctoral programme leading to the award of a joint, multiple or double degree[;][.]] (viii) [OPTION for EID: be enrolled in a doctoral programme.] (c) the costs have been fully incurred for the benefit of the recruited researchers. This latter condition is met if: {{{total remuneration costs (salaries, social security contributions, taxes and other costs included in the remuneration under the employment contract or other direct contract) or total fixed-amount fellowship costs for the researcher during the action plus total mobility costs (household, relocation and travel expenses and, if they must be paid under national law, taxes, duties and social security contributions) for the researcher during the action} plus total family costs for the researcher during the action} divided by the number of actual units} H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-ITN 390 1. Costs for recruited researchers: Types of costs — Cost form — Conditions for eligibility — Cost calculation 1.1 What? This budget category covers the costs for the recruited researchers (by providing for:  a monthly living allowance to cover the employment or fixed-amount fellowship (with social security coverage, including compulsory deductions under national law (i.e. gross amount))  a monthly mobility allowance to cover costs related to their mobility, e.g. relating to travel and accommodation This allowance covers private costs of the researchers, not professional costs (which are covered by the budget category ’research, training and networking costs’ AND  a monthly family allowance for researchers with family, to reduce family-related obstacles to researcher mobility.) The mobility and family allowances are due to the researcher for each month worked. What not? Costs of the beneficiaries for management and indirect costs are not covered under this budget category; they are covered under the budget category ‘institutional costs’ (Article 6.2.B). Example: Costs for student registration, access to student services (library, computing etc.), teaching, supervision, examination and graduation can only be covered by the institutional unit costs. 1.2 The costs must be declared on the basis of the unit costs fixed by Commission Decision C(2013) 819481 and set out in Annex 2 and 2a of the GA (currently: 81 Available at http://ec.europa.eu/research/participants/data/ref/h2020/other/legal/unit_costs/unit- costs_msca_en.pdf is equal to or higher than the following amount: {{amount per unit cost set out in Annex 2 as living allowance plus amount per unit cost set out in Annex 2 as mobility allowance} plus if it is due, amount per unit cost set out in Annex 2 as family allowance}. The family allowance is due if the researcher has a family at the time of recruitment. ‘Family’ means persons linked to the researcher by marriage (or a relationship with equivalent status to a marriage recognised by the legislation of the country where this relationship was formalised) or dependent children who are actually being maintained by the researcher. Budget flexibility — There is NO flexibility as regards the use of the unit costs for recruited researchers (i.e. living, mobility and family allowances). They must be fully used for each researcher; they can NOT be used to pay other researchers or other types of costs (see Article 6.2.A(c)). . H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-ITN 391  for the living allowance: EUR 3 110 per researcher per month (‘person-month’) To ensure equal treatment and purchasing power parity for all researchers, the amount for the living allowance is adapted per country, by applying a ‘country-specific correction coefficient (CCC)’. The list of coefficients is published in the Main Work Programme — MSCA in force at the time of the call. On the basis of this list, the beneficiaries must determine the coefficient for each researcher when s/he is recruited — according to the country of recruitment. This coefficient normally does not change during the action (unless the researcher is formally employed — not only seconded to — by another beneficiary in another country during the action duration).  for the mobility allowance: EUR 600 per person-month  for the family allowance: EUR 500 per person-month). In practice, the declaration of costs for MSCA grants is very simple and almost completely automatized: The beneficiaries must only indicate the number of implemented person-months (for researchers recruited under the action) and the costs are then automatically calculated by the IT system. 1.3 The costs (in practice for MSCA: the person-months) must fulfil the following conditions for eligibility:  fulfil the general conditions for unit costs to be eligible (i.e. the declared number of person-months must be demonstrably linked to the implementation of the action (and its duration), identifiable and verifiable etc.; see Article 6.1) Costs NOT incurred during the periods of research training activities (e.g. during maternity/parental leave) are ineligible.  be incurred for researchers that:  are — at the date of recruitment — early-stage researchers (‘ESRs’; i.e. not have a doctoral degree and be in the first 4 years (full-time equivalent research experience) of their research career), ‘Date of recruitment’ normally means the first day of the employment of the researcher for the purposes of the action (i.e. the starting date indicated in the employment contract/equivalent direct contract; see Article 32). The Agency may however exceptionally accept a different date, if it is linked to the recruitment and justified (e.g. by differences in the employment procedure in the country of recruitment). Example: The date of the formal letter offering the position under the action or the date of the signature of the employment contract can also be accepted by the Agency as 'date of recruitment'. Years of ‘research career’ are counted as full-time-equivalent research experience, from the date on which the researcher obtained a degree entitling him/her to embark on a doctoral programme (either in the country in which it was obtained or in which s/he is recruited) — even if the doctorate was never started or envisaged.  are recruited under an employment contract/equivalent direct contract (i.e. other contract with equivalent benefits and social security coverage), including: For the latest information on the amounts and the country correction coefficients, see the Main Work Programme — MSCA in force at the time of the call. H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-ITN 392  sickness, parental, unemployment and invalidity benefits  pension rights and  benefits for accidents at work and occupational diseases. If national law prevents them from recruiting researchers under an employment contract/equivalent direct contract, beneficiaries may (exceptionally and subject to the Agency’s prior agreement) offer a ‘fixed-amount fellowship’ with minimum social security coverage, including:  sickness, parental and invalidity benefits and  benefits for accidents at work and occupational diseases. In this case, the living allowance will be reduced by 50%.  as a rule, be employed full-time Part-time employment can be accepted:  subject to prior approval by the Agency  on personal or family grounds only and  not for professional reasons In the case of part-time employment, costs are reported as a pro-rata of the full-time unit cost. Example: For one month of 50% part-time employment, 0.5 units should be reported.  work exclusively on the research training activities Work outside the action is not allowed. Any complementary skills training (e.g. a minor teaching activity as part of the research training) is not incompatible, but must not jeopardise execution of the research training activities and must be set out in Annex 1 to the GA.  are supported for at least three months Person-months linked to shorter contracts will not be eligible. However, this requirement is linked to the duration of the contract and not to the actual duration of the training. Example: If the contract is set out for a longer duration, but the training is interrupted within the first three months for reasons which are beyond the control of the beneficiary (e.g. because the researcher resigns), the costs may still be claimed.  comply — at the time of recruitment — with the mobility rule, i.e. not have resided or carried out their main activity (work, studies, etc.) in the country of the beneficiary for more than 12 months in the three years immediately prior to the recruitment date (unless the beneficiary is an ‘international European interest organisation’82 or international organisation, for whom the mobility rule is limited to time spent with them) 82 For the definition, see Article 2.1(12) of the Rules for Participation: ‘international European interest organisation’ means an international organisation, the majority of whose members are Member States or While it is not possible to request part-time employment for professional reasons, beneficiaries may — in exceptional cases — request an interruption of the employment. If the Agency agrees (beforehand and in writing), there is no need for an amendment or suspension of the action; it is sufficient not to declare the months not worked. . H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-ITN 393 The mobility rule applies only to the first recruitment under the action. It does not apply to beneficiaries to which the researcher is sent or seconded afterwards. For refugees under the Geneva Convention83, the refugee procedure (i.e. before refugee status is conferred) will not be counted as ‘period of residence/activity in the country of the beneficiary’.  for the doctoral programmes (EJD and EID): are enrolled in a doctoral programme In the case of EJD, the PhD-programme must lead to the award of:  a joint degree (i.e. a single diploma issued by at least two higher education institutions offering an integrated programme and recognised officially in the countries in which the degree-awarding institutions are located) or  a double or multiple degree (i.e. two or more separate national diplomas issued by two or more higher education institutions and recognised officially in the countries in which the degree-awarding institutions are located). The degree must not necessarily be awarded within the action duration. However, if requested by the Agency, the beneficiary must be able to provide proof that the researcher actually received (or failed the examination for) the doctoral degree.  have been fully incurred for the benefit of the researchers (i.e. fully paid to the individuals for whom they are claimed) The beneficiary’s costs (gross amount) for researcher remuneration, mobility and family allowances must be at least as high as the living, mobility and family allowances set out in Annex 2. Lower costs are considered as ‘underpayment’. Social security contributions and taxation (under national law) are to be counted as part of the beneficiary’s costs (gross amount). MSCA-ITN researchers may NOT be requested to pay tuition fees for their research training and/or PhD degree programme (from their own funds or from the researcher unit cost). (The costs that are usually covered by such tuition fees (e.g. student registration, access to student services (library, computing etc.), teaching, supervision, examination and graduation) may be covered by the budget category ‘institutional costs’.) Family and mobility allowances can be paid to the researcher in various ways, for example as:  part of his/her salary  flight tickets for private travels, directly purchased or reimbursed by the beneficiary (work-related travels must be paid under the budget category of ’research, training and networking costs’)  rental costs, directly paid or reimbursed by the beneficiary . Any form is acceptable, provided that:  both sides agree  it is allowed under national law AND  there is no underpayment. associated countries, and whose principal objective is to promote scientific and technological cooperation in Europe. 83 1951 Refugee Convention and the 1967 Protocol. H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-ITN 394 Example: Researcher X chooses to take up residence in an apartment with a rent of 750 EUR/month. If the beneficiary is willing to sign the rental agreement on behalf of the researcher and the researcher agrees with this form of payment, the beneficiary will use 750 EUR of the total amount of 1100 EUR (mobility & family allowance) to pay the rent. The remaining 350 EUR must be paid as part of the salary (or in another acceptable form). Example: Researcher Y intends to travel to his/her home country for the summer holidays. S/he requests the beneficiary to directly purchase the tickets for him/her, and the beneficiary agrees to do so. The tickets cost 450 EUR and the beneficiary pays the remaining 150 EUR of the mobility allowance as part of the salary (or in another acceptable form). For beneficiaries with accounting in a currency other than the euro:  if a daily rate is published in the C series of the Official Journal of the European Union for the currency in question: costs must be converted into euro at the average of the daily exchange rates published over the corresponding reporting period, as reported on the ECB website84  if no daily rate is published: amounts must be converted at the average of the monthly accounting rates over the reporting period, using the currency converter on the Commission’s website85. For ease of implementation, monthly allowances for the recruited researchers can be calculated using a conservative exchange rate, if a corrective payment is then made (to the researchers) immediately after the end of the reporting period. This must be clearly explained in the contract or fixed-amount-fellowship agreement. Example: Researcher X is recruited in a country outside the euro-zone. The average exchange rate is normally EUR 0.9 but this fluctuates from time to time. In order to ensure that the researcher receives a regular monthly income and to avoid exchange rate losses, the beneficiary chooses to apply a conservative exchange rate of EUR 0.87 and to make a payment to correct any underpayment at the end of the reporting period. The researcher is fully informed of this procedure at the time of recruitment. The Agency will check if the allowances are used fully for the benefit of the researchers. Any underpayments, if not corrected, may lead to a rejection of costs (for that researcher).  for the family allowance: be incurred for researchers that have — at the date of the recruitment — a family, i.e.  be married  be in a partnership with equivalent status to marriage as recognised by the legislation of the country or region in which it was formalised or  have dependent children for whose maintenance s/he is actually responsible under national law. 1.4 The costs are calculated (automatically by the IT system) as follows:  for the living allowance: amount per unit (see Annex 2) x number of months actually spent by the researchers on the research training activities (‘number of implemented person-months’)  for the mobility allowance: amount per unit (see Annex 2) x number of implemented person-months  for the family allowance: 84 Available at http://www.ecb.europa.eu/stats/exchange/eurofxref/html/index.en.html 85 Available at http://ec.europa.eu/budget/contracts_grants/info_contracts/inforeuro/inforeuro_en.cfm Usually, payment as part of the salary is the simplest way to pay these allowances. H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-ITN 395 amount per unit (see Annex 2) x number of implemented person-months For partial months of recruitment, a pro-rata unit cost of 1/30 will be reimbursed for each day (for ease of implementation, each month is considered to have 30 days). Example: If the researcher spent 20 months and 15 days on the project, the calculation for the 15 days is: 15/30 = 0.5. In this case, insert 20.5 as number of person-months. Beneficiaries may NOT declare more than 36 person-months per researcher. (Person-months exceeding this number will be rejected by the Agency.) For EID: at least 50 % of the number of person-months declared for each researcher must have been spent in the non-academic sector. This time does not have to be consecutive and may be split in time and between different beneficiaries/partner organisations. The 50% must be reached by the end of the action (not before, e.g. by the end of a specific reporting period). . H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-ITN 396 1. Institutional costs: Types of costs — Cost form — Conditions for eligibility — Cost calculation 1.1 What? This budget category covers:  research, training and networking costs, i.e.:  costs for training and networking activities that contribute directly to the researchers’ career development (e.g. participation in conferences, trips related to work on the action, training, language courses, seminars, lab material, books, library records, publication costs)  costs for research expenses  management and indirect86 costs (i.e. the beneficiary’s additional costs in connection with the action). 1.2 The costs must be declared on the basis of the unit costs fixed by Commission Decision C(2013) 819487 and set out in Annex 2 and 2a of the GA (currently:  for research, training and networking costs: EUR 1800 per researcher per month (‘person- month’)  for management and indirect costs: EUR 1200 per person-month (for beneficiaries that already receive an EU/Euratom operating grant88: this amount is halved, i.e. EUR 600)). 86 For the definition, see Article 6.2 of the H2020 General MGA: ‘indirect costs’ are costs that are not directly linked to the action implementation and therefore cannot be attributed directly to it. 87 Available at http://ec.europa.eu/research/participants/data/ref/h2020/other/legal/unit_costs/unit- costs_msca_en.pdf. 88 For the definition, see Article 121(1)(b) of the Financial Regulation No 966/2012: ‘operating grant’ means direct financial contribution, by way of donation, from the budget in order to finance the functioning of a body which pursues an aim of general EU interest or has an objective forming part of and supporting EU policy. B. Institutional costs (B.1 Research, training and networking costs and B.2 Management and indirect costs) are eligible if the costs for the recruited researchers (living allowance, mobility allowance, family allowance; see above) are eligible. Budget flexibility — Since MSCA-ITN uses unit costs, there is some flexibility as regards the use of the amounts received:  The unit cost for research, training and networking should be used for the research, training and networking activities foreseen in Annex 1, but unused amounts may be used for other action- related purposes, for instance to increase the salary of a researcher or to organise additional training activities.  The unit cost for management and indirect costs should be used for the management of the action, but unused amounts may also be used for other action-related purposes, for example, to increase the salary of a researcher. Re-distributions of management and indirect costs within the consortium are allowed, but should be done via an internal agreement and should roughly correspond to the actual division of (management) tasks within the consortium. Management and indirect costs should also be shared with partner organisations which incurred management or indirect costs for secondments (see Article 8). . H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-ITN 397 In practice the declaration of institutional costs for MSCA grants is completely automatised because the IT system automatically calculates them on the basis of the number of person- months declared for the researcher cost. 1.3 The eligibility of the institutional costs is directly linked to and conditional on the eligibility of the costs for the recruited researchers. Institutional costs (research, training and networking costs, management and indirect costs) are eligible only if all the eligibility conditions for the recruited researchers are met. Person- months which are not eligible for the budget category ‘costs for recruited researchers’ are also not eligible for the budget category ‘institutional costs’. Institutional costs can NOT be claimed separately (e.g. management and indirect costs cannot be claimed without living allowance, etc.). 1.4 The costs are calculated (automatically by the IT system) like the costs for recruited researchers:  for the research, training and networking costs: amount per unit (see Annex 2) x number of implemented person-months (declared for the researcher cost)  for the management and indirect costs: amount per unit (see Annex 2) x number of implemented person-months (declared for the researcher cost) 6.3 Ineligible costs ‘Ineligible costs’ are: (a) costs that do not comply with the conditions set out above (in Article 6.1), and in particular costs incurred during suspension of the action implementation (see Article 49); (b) costs reimbursed under another EU or Euratom grant (including grants awarded by a Member State and financed by the EU or Euratom budget and grants awarded by bodies other than the Agency for the purpose of implementing the EU or Euratom budget), in particular, management and indirect costs if the beneficiary is already receiving an operating grant financed by the EU or Euratom budget in the same period. (c) [OPTION for cost categories explicitly excluded in the work programme: [insert name of excluded cost category]]. 6.4 Consequences of declaration of ineligible costs Declared costs that are ineligible will be rejected (see Article 42). This may also lead to any of the other measures described in Chapter 6. Budget flexibility — Even if the consortium re-distributes parts of the institutional unit costs, the reporting is always based on the person-months implemented by the beneficiary. . H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-ITN 398 ARTICLE 8 — RESOURCES TO IMPLEMENT THE ACTION — THIRD PARTIES INVOLVED IN THE ACTION 1. Appropriate own resources — Use of third party resources — Third parties involved in the action The rules of the General MGA on third party involvement do not apply. Specific cases (third parties involved in the action): Partner organisations — MSCA-ITN allow nevertheless for the involvement of partner organisations (i.e. organisations that are not beneficiaries, but that provide training and host researchers during a secondment). Partner organisations are not explicitly mentioned as third parties in the GA, since no additional costs arise for the action. Their costs are covered by the unit costs paid to the beneficiaries. Partner organisations can NOT employ the researcher under the action. Authorisation to administer — Coordinators that are secondary or higher education establishments and public bodies may exceptionally delegate the administration of the payments to another legal entity (third party), in most cases a foundation. The third party must fulfil the following conditions:  it must have been granted an ‘authorisation to administer’ by the coordinator AND  it must be affiliated, controlled or set up by the coordinator in order to handle its administrative affairs, including receiving and administering EU funds. In this case, the bank account number to be provided under Article 21.8 must be that of the entity and the payments will be transferred directly to it. The entity must therefore be registered in the Beneficiary Register and validated by the Commission/Agency. It will get its own PIC — although it is not a beneficiary. Since MSCA-ITN uses unit costs, no additional costs arise for the action. The costs of the entity are covered by the unit costs paid to the coordinator (see Article 6). ARTICLE 8 — RESOURCES TO IMPLEMENT THE ACTION — THIRD PARTIES INVOLVED IN THE ACTION Not applicable The beneficiaries remain fully responsible for the implementation of the action in accordance with the GA. Best practice: In order to be able to fulfil this obligation, beneficiaries should establish internal arrangements (e.g. partnership agreements) with partner organisations. Coordination and administration tasks are considered action tasks. Coordinators using a third party with authorisation to administer remain fully responsible for it under the GA. H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-ITN 399 ARTICLE 18 — KEEPING RECORDS — SUPPORTING DOCUMENTATION 1. Records and other supporting documentation For MSCA-ITN, simplified rules on record-keeping apply: Beneficiaries only need to keep appropriate and sufficient evidence to prove that the person-months declared are correct, i.e.:  the employment contracts (or other suitable documents, e.g. fixed-fellowship agreements)  proof that:  the eligibility conditions for the researchers were complied with (e.g. CV showing the researcher’s seniority, copies of diplomas)  the researchers actually worked on the action (e.g. lab books, scientific articles, library records)  the obligations set out in Article 32 were complied with  the living, mobility and family allowances (including the employer’s compulsory social security payments) were fully paid to the researchers. This evidence must be verifiable, auditable and available. It must be correctly archived — for at least five years after the balance is paid (three years for grants up to EUR 60 000) or longer if:  national laws foresee longer document retention periods (e.g. for tax or social security purposes)  there are ongoing procedures (such as audits, investigations or litigation). (In this case the evidence must be kept until these procedures end.) Costs that are not supported by appropriate and sufficient evidence may be rejected (and other measures described in Chapter 6 may be applied as well). Beneficiaries that throw supporting documents away during the retention period bear the full risk of rejection by the Agency. . ARTICLE 18 — KEEPING RECORDS — SUPPORTING DOCUMENTATION […] 18.1.2 Records and other documentation to support the costs declared The beneficiaries must keep adequate records and other supporting documentation to prove the number of units declared and that the costs for recruited researchers (living allowance, mobility allowance, family allowance) have been fully incurred for the benefit of the researchers. […] H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-ITN 400 ARTICLE 19 — SUBMISSION OF DELIVERABLES 1. Deliverable: Progress report What & When? The coordinator must — after the first year of the action — send to the Agency a progress report, to inform the project officer about progress on the action. How? The report must be prepared and submitted directly in the Participant Portal (see Article 52). 2. Deliverable: Mid-term review meeting What & When? The coordinator must:  before the deadline for the periodic report for RP 1: organise a mid-term review meeting and  no later than 30 days before this meeting: send to the Agency (via the Participant Portal) a draft version of the periodic report, as a basis for the mid-term review meeting. 3. Deliverable: Researcher declaration What & When? The beneficiary must send to the Agency (via the Participant Portal) a document with information about each recruited researcher (‘researcher declaration’) — within 20 days after the recruitment (of the researcher). It is important to give correct and complete information since the data will be automatically inserted in Annex 4 (financial statement), for calculating the living, mobility and family ARTICLE 19 — SUBMISSION OF DELIVERABLES 19.1 Obligation to submit deliverables The coordinator must: - submit a ‘progress report’ within 30 days after one year from the starting date of the action; - organise a ‘mid-term review meeting’ between the beneficiaries, the partner organisation(s) and the Agency before the deadline for the submission of the report for RP 1 (reporting period 1); - establish a supervisory board of the network; - submit any other deliverables identified in Annex 1, in accordance with the timing and conditions set out in it. The beneficiaries must: - submit a ‘researcher declaration’ within 20 days after the recruitment of the researcher. 19.2 Consequences of non-compliance If a beneficiary or the coordinator breaches any of its obligations under this Article, the Agency may apply any of the measures provided for in Chapter 6. H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-ITN 401 allowance units. (If the researcher declaration is not provided, it will NOT be possible to declare person-months for that researcher). How? The researcher declaration must be prepared and submitted directly in the Participant Portal (see Article 52). H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-ITN 402 ARTICLE 25 — ACCESS RIGHTS TO BACKGROUND ARTICLE 31 — ACCESS RIGHTS TO RESULTS 1. Access rights for researchers In view of the key role of the recruited researchers in MSCA-ITN, the MSCA-ITN MGA foresees special access rights for them (in addition to those of the General MGA; see Articles 25 and 31 H2020 General MGA): The beneficiaries must give the recruited researchers access to both background AND results necessary for their research training activities. ‘Background’ means any data, know-how or information — whatever its form or nature (tangible or intangible), including any rights such as intellectual property rights — that:  is held by beneficiaries before they accede to the GA  is needed to implement the action or exploit the results AND that  has been identified by the beneficiaries in accordance with Article 24. ‘Results’ means any (tangible or intangible) output of the action, such as data, knowledge or information — whatever its form or nature, whether it can be protected or not — that is generated in the action as well as any rights attached to it, including intellectual property rights. ARTICLE 31 — ACCESS RIGHTS TO RESULTS […] 31.6 Access rights for researchers The beneficiaries must — on a royalty-free basis — give access to the recruited researchers to results necessary for their research training activities under the action. […] ARTICLE 25 — ACCESS RIGHTS TO BACKGROUND […] 25.5 Access rights for researchers The beneficiaries must — on a royalty-free basis — give access to the recruited researchers to background necessary for their research training activities under the action. […] H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-ITN 403 ARTICLE 32 — RECRUITMENT AND WORKING CONDITIONS FOR RECRUITED RESEARCHERS ARTICLE 32 — RECRUITMENT AND WORKING CONDITIONS FOR RECRUITED RESEARCHERS 32.1 Obligations towards recruited researchers The beneficiaries must respect the following recruitment and working conditions for the researchers recruited under the action: (a) take all measures to implement the principles set out in the Commission Recommendation on the European Charter for Researchers and the Code of Conduct for the Recruitment of Researchers 14 and ensure that the researchers are aware of them; (b) advertise and publish vacancies internationally, including on the web-sites requested by the Agency; (c) recruit the researchers, following an open, transparent, impartial and equitable recruitment procedure, on the basis of: (i) their scientific skills and the relevance of their research experience; (ii) the impact of the proposed training on the researcher’s career; (iii) a fair gender representation (by promoting genuine equal access opportunities between men and women throughout the recruitment process); (d) ensure that no conflict of interest exists in or arises from the recruitment; (e) ensure that the researchers enjoy at the place of the implementation at least the same standards and working conditions as those applicable to local researchers holding a similar position; (f) ensure that the employment contract, other direct contract or fixed-amount-fellowship agreement (see Article 6) specifies: (i) the starting date and duration of the research training activities under the action; (ii) the monthly support for the researcher under this Agreement (in euro and, if relevant, in the currency in which the remuneration is paid); (iii) the obligation of the researcher to work exclusively for the action; (iv) the obligation of the researcher not to receive for activities carried out in the frame of the action, other incomes than those received from the beneficiary (or any other entity referred to in Annex 1); (v) the obligation of the researcher to inform the beneficiary as soon as possible of any events or circumstances likely to affect the Agreement (see Article 17); (vi) the arrangements related to the intellectual property rights between the beneficiary and the researcher — during implementation of the action and afterwards; (vii) the obligation of the researcher to maintain confidentiality (see Article 36); (viii) the obligation of the researcher to ensure the visibility of EU funding in communications or publications and in applications for the protection of results (see Articles 27, 28, 29 and 38); (g) assist the researchers in the administrative procedures related to their recruitment; (h) inform the researchers about: - the description, conditions, location and the timetable for the implementation of the research training activities under the action and the name of the supervisor; - the rights and obligations of the beneficiary toward the researcher under this Agreement; - the obligation of the researcher to complete and submit — at the end of the training — the evaluation questionnaire and — two years later — follow-up questionnaire provided by the Agency; H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-ITN 404 1. Recruitment and working conditions — Rights for the researchers In view of the key role of the recruited researchers in MSCA-ITN, the MSCA-ITN MGA foresees a series of obligations in order to guarantee objective selection procedures and best possible working conditions for them. Main obligations (towards the researcher):  Advertise and publish vacancies internationally Beneficiaries must publish vacancies as widely as possible, including on the EURAXESS Jobs Portal89. They may also use their networks to ensure the widest possible dissemination of vacancies and information about the application process.  Follow an open, transparent, impartial and equitable recruitment procedure (i.e. merit based, taking into account potential for their professional development and promoting equal access for women and men)  Ensure that no conflict of interest exists in or arises from the recruitment (i.e. take or refrain from action, as appropriate, where the impartial and objective performance of recruitment duties is compromised for reasons involving:  family  emotional life  political or national affinity  economic interest or  any other shared interest)  Ensure that the researchers enjoy at the place of the implementation at least the same standards and working conditions as those applicable to local researchers holding a similar position  Host the researchers at their premises and provide training as well as the necessary means for implementing the action If the Agency finds that the beneficiary is not supporting the research training activities in line with Annex 1 to the GA, it may reduce the grant.  Ensure that the researchers are adequately supervised 89 Available at http://ec.europa.eu/euraxess/ (i) ensure that the researchers do not receive, for activities carried out in the frame of the action, other incomes than those received from the beneficiaries (or any other entity referred to in Annex 1); (j) host the researchers at their premises and provide training as well as the necessary means for implementing the action; (k) ensure that the researchers are adequately supervised; (l) ensure that a career development plan is established and support its implementation; (m) ensure an appropriate exposure to the non-academic sector; (n) limit secondments to a maximum of 30 % of the actual months spent implementing the research training activities under the action. […] 14 Commission Recommendation 2005/251/EC of 11 March 2005 on the European Charter for Researchers and on a Code of Conduct for the Recruitment of Researchers (OJ L 75, 22.3.2005, p.67). H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-ITN 405  Ensure that a career development plan is established and support its implementation  Ensure an appropriate exposure to the non-academic sector  Comply with the arrangements on intellectual property rights Assistance with intellectual property rights can be obtained via the IPR Helpdesk90.  Assist the researchers in the administrative procedures related to their recruitment (e.g. helping with visa procedures or preparing the career development plan) Assistance with relocating researchers can be obtained via EURAXESS Services91.  Inform the researchers about key elements of the grant Thus, beneficiaries must provide researchers with information on:  basic facts about the Marie Skłodowska-Curie actions, to make the researcher aware that s/he is a MSCA fellow, including:  the researcher’s rights and obligations and  where to look for details (MSCA website, Participant Portal, Marie Curie Alumni Association (MCAA), etc.)  the specific action in question (e.g. planned secondments, events, etc.) and  whom they have appointed to supervise them for the duration of the research training activities, including during secondments/placements with other beneficiaries and/or partner organisations. Moreover, the employment contract/equivalent direct contract (or fixed-amount-fellowship agreement) contract must clearly state:  the starting date of research training activities under the action and its duration  the allowances that the researcher is entitled to receive (and if this is paid in a currency other than the euro, the exchange rate; for the exchange rate, see Article 6.2). The employment contract can state the total/annual salary — as long as it is possible to determine the monthly salary (e.g. by dividing the annual salary by 12).  Ensure that the researchers do NOT receive, for activities carried out in the frame of the action, other incomes than those received from the beneficiaries (or any other entity referred to in Annex 1)  Ensure that secondments are limited to a maximum of 30 % of the months spent implementing the research training activities under the action. ‘Secondments’ may be either to another beneficiary within the consortium or to a partner organisation and must involve research training activities. For EID or EJD: The 30% rule does not apply to time spent with other beneficiaries or partner organisations, if the secondment is foreseen in Annex 1. 2. Employment contract — Obligations on the researchers The MSCA-ITN GA foresees that there must be an employment contract/equivalent direct contract (or fixed-amount-fellowship agreement), in order to formalise the commitments in the GA also towards the researchers. Main obligations (of the researchers):  Work exclusively on the research training activities under the action This also means that a researcher can NOT hold two MSCA grants at the same time or engage in another professional activity or employment. 90 Available at https://www.iprhelpdesk.eu/. 91 Available at http://ec.europa.eu/euraxess/. H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-ITN 406  Not receive (for activities carried out in the frame of the action) other incomes than those received from their beneficiary (or any other entity referred to in Annex 1) Example: If the researcher’s allowances fall short of the legal minimum salary in the country in question, the beneficiary (or other entity in Annex 1) may pay a top-up to make up the difference.  Inform their beneficiary as soon as possible of any events or circumstances likely to affect the GA (such as, significant changes to their career development plan or personal circumstances affecting the foreseen activities)  Comply with the arrangements related to the intellectual property rights  Maintain confidentiality  Ensure the visibility of EU funding Researchers must acknowledge funding under the MSCA in publications, communications or patent applications.  Complete and submit — at the end of the training — the evaluation questionnaire and — two years later — follow-up questionnaire provided by the Agency. H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-ITN 407 ARTICLE 38 — PROMOTING THE ACTION — VISIBILITY OF EU FUNDING ARTICLE 38 — PROMOTING THE ACTION — VISIBILITY OF EU FUNDING 38.1 Communication activities by the beneficiaries 38.1.1 Obligation to promote the action and its results The beneficiaries must promote the action and its results, by providing targeted information to multiple audiences (including the media and the public) in a strategic and effective manner. This does not change the dissemination obligations in Article 29, the confidentiality obligations in Article 36 or the security obligations in Article 37, all of which still apply. Before engaging in a communication activity expected to have a mainstream media coverage the beneficiaries must inform the Agency (see Article 52). 38.1.2 Information on EU funding — Obligation and right to use the EU emblem Unless the Agency requests or agrees otherwise or unless it is impossible, any communication activity related to the action (including in electronic form, via social media, etc.) and any infrastructure, equipment and major results funded by the grant must: (a) display the EU emblem and (b) include the following text: For communication activities: "This project has received funding from the European Union’s Horizon 2020 research and innovation programme under the Marie Skłodowska-Curie grant agreement No [number]." For infrastructure, equipment and major results: “This [infrastructure][equipment][insert type of result] is part of a project that has received funding from the European Union’s Horizon 2020 research and innovation programme under the Marie Skłodowska-Curie grant agreement No [number].” When displayed together with another logo, the EU emblem must have appropriate prominence. For the purposes of their obligations under this Article, the beneficiaries may use the EU emblem without first obtaining approval from the Agency. This does not, however, give them the right to exclusive use. Moreover, they may not appropriate the EU emblem or any similar trademark or logo, either by registration or by any other means. […] H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-ITN 408 1. Communication activities (by the beneficiaries) — Promoting the action — Mainstream media coverage For MSCA, the rules for promoting the action are in principle the same as in the General MGA (see Article 38.1.1 H2020 General MGA). However, beneficiaries must inform the Agency not only before a communication activity expected to have a major media impact, but before any activity expected to have mainstream media coverage (i.e. coverage in any forms of media (e.g. print, TV, radio and electronic) addressing a non-specialist, non-scientific audience (e.g. local, regional or national news). (This allows the Agency to ensure maximum publicity and to disseminate the coverage further through social media, news updates, etc.). 2. Visibility of EU funding For MSCA, the same rules on visibility of EU funding apply as in the General MGA (see Articles 27.3, 28.2, 29.4 and 38.1.2 H2020 General MGA). In addition, the beneficiaries must however make specific reference to the MSCA grant. Thus, the clause acknowledging EU funding is slightly adapted. H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-IF 409 III.3 H2020 MGA MSCA-IF: Annotations ARTICLE 2 — ACTION TO BE IMPLEMENTED 1. Action: MSCA-IF What? MSCA-IF funds:  the recruitment of an experienced researcher for research training activities (‘fellowship’). MSCA-IF take the form of European Fellowships (EF) and Global Fellowships (GF). European Fellowships include two additional funding strands: the ‘Career Restart Panel’ and the ‘Reintegration Panel’. MSCA-IF are mono-beneficiary actions. They are funded under Part I of the Horizon 2020 Framework Programme, ‘Marie Skłodowska- Curie actions’ (e.g. H2020-MSCA-IF-2014). ARTICLE 2 — ACTION TO BE IMPLEMENTED The grant is awarded for the action entitled [insert title of the action] — [insert acronym] (‘action’), as described in Annex 1. For more information on MSCA-IF, see the Online Manual and the H2020 grants fact sheets on the Participant Portal. For more information on the conditions for participation and funding, see the Online Manual or the Main Work Programme — MSCA and the call and topics pages of the call. H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-IF 410 ARTICLE 3 — DURATION AND STARTING DATE OF THE ACTION 1. Action starting date For MSCA-IF, the rules on the action starting date are in principle the same as in the General MGA (see Article 3 H2020 General MGA). However, the MSCA-IF MGA provides for an additional option, where the starting date is notified by the beneficiary (i.e. is not set by the Agency, but depends on the beneficiary). In this case, the notified starting date must be:  after the entry into force of the GA and within the number of months set out in Article 3 (i.e. normally 12 months from the entry into force).  notified by the beneficiary in advance (via the Participant Portal). If the action does not start or the starting date is not notified (in time), the Agency may terminate the GA (see Article 50). If the notification of the starting date is sent after the start of the action, this will have an impact on the timing of the pre-financing payment and will delay it (see Article 21.2). ARTICLE 3 — DURATION AND STARTING DATE OF THE ACTION The duration of the action will be [insert number] months as of [OPTION by default: the first day of the month following the date the Agreement enters into force (see Article 58)] [OPTION if needed for the action: the effective starting date notified by the beneficiary, which must be within [insert number] months from the date the Agreement enters into force] [OPTION if needed for the action: insert date] 5 (‘starting date of the action’). 5 Text in italics shows the options of the Model Grant Agreement that are applicable to this Agreement. H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-IF 411 ARTICLE 4 — ESTIMATED BUDGET AND BUDGET TRANSFERS 1. Budget categories The MSCA-IF MGA does not use the budget categories of the General MGA. Budget categories of the MSCA-IF MGA:  costs for the recruited researcher  institutional costs. 2. Budget transfers Given that MSCA-IF is a mono-beneficiary action, there is NO re-distribution of person-months between beneficiaries. Transfers between budget categories are formally NOT possible, because all budget categories are all linked to the same person-months declared for the recruited researcher. (It is therefore technically not possible to move budgeted amounts from one budget category to another.) The budget categories are relevant for the estimated budget (Article 4 and Annex 2), forms of costs (Article 5), cost eligibility rules (Article 6.2) and the cost declarations (i.e. financial statements; Article 20 and Annex 4). . ARTICLE 4 — ESTIMATED BUDGET AND BUDGET TRANSFERS 4.1 Estimated budget The ‘estimated budget’ for the action is set out in Annex 2. It contains the estimated eligible costs and the forms of costs, broken down for the beneficiary, by budget category (see Articles 5, 6). 4.2 Budget transfers Not applicable Budget flexibility — Since MSCA-IF uses unit costs, there is however some flexibility as regards the use of the amounts received:  The unit costs for the recruited researcher (i.e. living, mobility and family allowances) must be fully used for the researcher. They can NOT be used to pay other types of costs (see Article 6.2.A(c)).  The unit cost for research, training and networking should be used for the research, training and networking activities foreseen in Annex 1, but unused amounts may be used for other action- related purposes, for instance to increase the salary of the researcher or to organise additional training activities.  The unit cost for management and indirect costs should be used for the management of the action, but unused amounts may also be used for other action-related purposes, for example, to increase the salary of the researcher. Management and indirect costs should be shared with partner organisations which incurred management or indirect costs for secondments (see Article 8). H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-IF 412 ARTICLE 5 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATES AND FORMS OF COSTS 1. Reimbursement rate How much? For MSCA-IF, the reimbursement rate is set at 100 % (see the Main Work Programme — MSCA). 2. Cost forms The MSCA MGAs do not use the cost forms of the General MGA, but the unit costs set out in Commission Decision C(2013) 819492. For MSCA-IF, these are unit costs for:  costs for the recruited researcher: living allowance, mobility allowance and, if applicable, family allowance  institutional costs: research, training and networking costs and management and indirect costs. These are fixed amounts that must be multiplied by the number of months the recruited researchers spent on research training activities (‘person-months’); they cannot be changed. The conditions for eligibility are set out in Article 6. 92 Commission Decision C(2013) 8194 authorising the use of reimbursement on the basis of unit costs authorising the use of reimbursement on the basis of unit costs for Marie Skłodowska-Curie actions under the Horizon 2020 Framework Programme. Available at: http://ec.europa.eu/research/participants/data/ref/h2020/other/legal/unit_costs/unit-costs_msca_en.pdf ARTICLE 5 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATES AND FORMS OF COSTS […] 5.2 Form of grant, reimbursement rate and form of costs The grant reimburses 100 % of the action’s eligible costs (see Article 6) (‘reimbursement of eligible costs grant’) (see Annex 2). The estimated eligible costs of the action are EUR [insert amount (insert amount in words)]. Eligible costs (see Article 6) must be declared under the following form (‘form of costs’): (a) for costs for the recruited researcher (living, mobility and family allowances): on the basis of the amount(s) per unit set out in Annex 2 (‘unit costs’) and (b) for institutional costs (research, training and networking costs and management and indirect costs): on the basis of the amount per unit set out in Annex 2 (unit costs). H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-IF 413 1. Final grant amount For MSCA, the rules on the calculation of the final grant amount are in principle the same as in the General MGA (see Article 5.3 H2020 General MGA). However, since MSCA uses only unit costs, there is NO reduction due to the no-profit rule in MSCA MGAs (Step 3 of Article 5.3 of the General MGA). 5.3 Final grant amount — Calculation The ‘final grant amount’ depends on the actual extent to which the action is implemented in accordance with the Agreement’s terms and conditions. This amount is calculated by the Agency — when the payment of the balance is made (see Article 21.4) — in the following steps: Step 1 – Application of the reimbursement rate to the eligible costs Step 2 – Limit to the maximum grant amount Step 3 – Reduction due to improper implementation or breach of other obligations 5.3.1 Step 1 — Application of the reimbursement rates to the eligible costs The reimbursement rate (see Article 5.2) is applied to eligible costs (unit costs; see Article 6) declared by the beneficiary and approved by the Agency (see Article 21). 5.3.2 Step 2 — Limit to the maximum grant amount If the amount obtained following Step 1 is higher than the maximum grant amount set out in Article 5.1, it will be limited to the latter. 5.3.3 Step 3 — Reduction due to improper implementation or breach of other obligations — Reduced grant amount — Calculation If the grant is reduced (see Article 43), the Agency will calculate the reduced grant amount by deducting the amount of the reduction (calculated in proportion to the improper implementation of the action or to the seriousness of the breach of obligations in accordance with Article 43.2) from the maximum grant amount set out in Article 5.1. The final grant amount will be the lower of the following two: - the amount obtained following Steps 1 and 2 or - the reduced grant amount following Step 3. […] H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-IF 414 ARTICLE 6 – ELIGIBLE AND INELIGIBLE COSTS 1. Eligible costs The grant can only reimburse eligible costs (i.e. costs that comply with the general and specific conditions set out in this Article) (‘reimbursement of eligible costs grant’). Article 6.1 refers to general eligibility conditions applicable per cost form (for MSCA: only unit costs; see Article 5). Article 6.2 refers to specific eligibility conditions applicable per budget category (see Article 4). 2. General conditions for unit costs to be eligible The general conditions for eligibility of unit costs are the same as in the General MGA (see Article 6.1 H2020 General MGA). ONLY eligible costs may be entered into the estimated budget for the action (see Article 4) or declared in the financial statements (see Article 20). Moreover, the burden on proof for eligibility is on the beneficiaries (and linked third parties). They must keep sufficient supporting documents (see Article 18) to show that the person-months they declare are eligible. Compliance with eligibility rules may be subject to a check or audit by the Commission/Agency. Any ineligible costs found will be rejected (see Article 42). . ARTICLE 6 — ELIGIBLE AND INELIGIBLE COSTS 6.1 General conditions for costs to be eligible Unit costs are eligible (‘eligible costs’) if: (a) they are calculated as follows: {amounts per unit set out in Annex 2 multiplied by the number of actual units}. (b) the number of actual units complies with the following: - the units must be actually used or produced in the period set out in Article 3; - the units must be necessary for implementing the action or produced by it, and - the number of units must be identifiable and verifiable, in particular supported by records and documentation (see Article 18). H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-IF 415 1. Specific conditions for costs to be eligible Article 6.2 refers to specific eligibility conditions applicable per budget category. The MSCA MGAs have their own budget categories, with their own types of costs, conditions for eligibility and rules for cost calculation. For ease of reference, the annotations for Article 6.2 will summarise — for each budget category — the information necessary to establish the eligible costs, i.e.  types of costs covered by the budget category  cost form under which the costs must be declared (for MSCA : unit costs)  conditions for eligibility  how the costs must be calculated. 6.2 Specific conditions for costs to be eligible Costs are eligible, if they comply with the general conditions (see above) and the specific conditions set out below for each of the following two budget categories: H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-IF 416 1. Costs for the recruited researcher: Types of costs — Cost form — Conditions for eligibility — Cost calculation 1.1 What? This budget category covers the costs for the recruited researcher (by providing for: A. Costs for the recruited researcher (A.1 Living allowance, A.2 Mobility allowance and A.3 Family allowance) are eligible, if: (a) the number of units declared: (i) corresponds to the actual number of months spent by the recruited researcher on the research training activities and (ii) does not exceed [24][OPTION for GF: 36] months; (b) the recruited researcher complies with the following conditions: (i) be recruited by the beneficiary under an employment contract (or other direct contract with equivalent benefits, including social security coverage) or — if not otherwise possible under national law — under a fixed-amount-fellowship agreement with minimum social security coverage, including for a period of secondment to a partner organisation; (ii) be employed full-time, unless the Agency has approved a part-time employment for personal or family reasons (see Article 55), and (iii) be working exclusively for the action; (c) the costs have been fully incurred for the benefit of the recruited researcher. This latter condition is met if: {{{total remuneration costs (salaries, social security contributions, taxes and other costs included in the remuneration under the employment contract or other direct contract) or total fixed-amount fellowship costs for the researcher during the action plus total mobility costs (household, relocation and travel expenses and, if they must be paid under national law, taxes, duties and social security contributions) for the researcher during the action} plus total family costs for the researcher during the action} divided by the number of actual units}. is equal to or higher than the following amount: {{amount per unit cost set out in Annex 2 as living allowance plus amount per unit cost set out in Annex 2 as mobility allowance} plus if it is due, amount per unit cost set out in Annex 2 as family allowance}. H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-IF 417  a monthly living allowance to cover the employment or fixed-amount fellowship (with social security coverage, including compulsory deductions under national law (i.e. gross amount))  a monthly mobility allowance to cover costs related to his/her mobility, e.g. relating to travel and accommodation This allowance covers private costs of the researcher, not professional costs (which are covered by the budget category the ’research, training and networking costs’). AND  a monthly family allowance if the researcher has family, to reduce family-related obstacles to researcher mobility.) The mobility and family allowances are due to the researcher for each month worked. What not? Costs of the beneficiaries for management and indirect costs are not covered under this budget category; they are covered under the budget category ‘institutional costs’ (Article 6.2.B). 1.2 The costs must be declared on the basis of the unit costs fixed by Commission Decision C(2013) 819493 and set out in Annex 2 and 2a of the GA (currently:  for the living allowance: EUR 4650 for the researcher per month (‘person-month’) To ensure equal treatment and purchasing power parity for all researchers, the amount for the living allowance is adapted per country, by applying a ‘country-specific correction coefficient (CCC)’. The coefficient for the researcher is set by the Agency during grant preparation — on the basis of the list of coefficients of the Main Work Programme — MSCA in force at the time of the call and according to the country of recruitment. For GF: there will be two different country-specific correction coefficients:  one for the outgoing phase: the coefficient of the country where the researcher is hosted (i.e. the country of the partner organisation)  one for the return phase: the coefficient of the country where the researcher returns to (i.e. the country of the beneficiary).  for the mobility allowance: EUR 600 per person-month  for the family allowance: EUR 500 per person-month). In practice, the declaration of costs for MSCA grants is very simple and almost completely automatized: The beneficiary must only indicate the number of implemented person-months (for the researcher recruited under the action) and the costs are then automatically calculated by the IT system. 93 Available at http://ec.europa.eu/research/participants/data/ref/h2020/other/legal/unit_costs/unit- costs_msca_en.pdf. For the latest information on the amounts and the country correction coefficients, see the Main Work Programme — MSCA in force at the time of the call. Budget flexibility — There is NO flexibility as regards the use of the unit costs for the recruited researcher (i.e. living, mobility and family allowances). They must be fully used for the researcher; they can NOT be used to pay other types of costs (see Article 6.2.A(c)). . H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-IF 418 1.3 The costs (in practice for MSCA: the person-months) must fulfil the following conditions for eligibility:  fulfil the general conditions for unit costs to be eligible (i.e. the declared number of person-months must be demonstrably linked to the implementation of the action (and its duration), identifiable and verifiable etc.; see Article 6.1) Costs NOT incurred during the action implementation (e.g. during maternity/parental leave) are ineligible.  be incurred for a researcher who:  is — at the time of the call deadline — an experienced researcher (‘ER’; i.e. have a doctoral degree or have at least four years (full-time equivalent research experience) of research career) Years of ‘research career’ are counted as full-time-equivalent research experience, from the date when the researcher obtained a degree entitling him/her to embark on a doctoral programme (either in the country in which it was obtained or in which s/he is recruited) — even if the doctorate was never started or envisaged.  is recruited under an employment contract/equivalent direct contract (i.e. other direct contract with equivalent benefits and social security coverage), including  sickness, parental, unemployment and invalidity benefits  pension rights and  benefits for accidents at work and occupational diseases. If national law prevents the beneficiary from recruiting the researcher under an employment contract/equivalent direct contract, the beneficiary may (exceptionally and subject to the Agency’s prior agreement) offer a ‘fixed-amount fellowship’ with minimum social security coverage, including:  sickness, parental and invalidity benefits and  benefits for accidents at work and occupational diseases. In this case, the living allowance will be reduced by 50%.  as a rule, be employed full-time Part-time employment can be accepted:  subject to prior approval by the Agency  on personal or family grounds only and  not for professional reasons. In the case of part-time employment, costs are reported as pro-rata of the full- time unit cost. Example: For one month of 50% part-time employment, 0.5 units should be claimed. While it is not possible to request part-time employment for professional reasons, beneficiaries may — in exceptional cases — request a suspension of the action to interrupt the employment (see Article 49.1.1.2). . H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-IF 419  work exclusively on the research training activities Work outside the action is not allowed. Any complementary skills' training (e.g. teaching activity as part of the research training) is not incompatible, but must not jeopardise execution of the research activities and must be set out in Annex 1 to the GA.  have been fully incurred for the benefit of the researcher (i.e. fully paid to the individual for whom they are claimed) The beneficiary’s costs (gross amount) for researcher remuneration, mobility and family allowance must be at least as high as the living, mobility and family allowances set out in Annex 2. Lower costs are considered as ‘underpayment’. Social security contributions and taxation (under national law) are to be counted as part of the beneficiary’s costs (gross amount). Family and mobility allowances can be paid to the researcher in various ways, for example as:  - part of his/her salary  flight tickets for private travels, directly purchased or reimbursed by the beneficiary (work-related travels must be paid under the budget category of ’research, training and networking costs’)  rental costs paid or reimbursed by the beneficiary etc. Any form is acceptable, provided that: - both sides agree  it is allowed under national law AND  there is no underpayment. Example: Researcher X chooses to take up residence in an apartment with a rent of 750 EUR/month. If the beneficiary is willing to sign the rental agreement on behalf of the researcher and the researcher agrees with this form of payment, the beneficiary will use 750 EUR of the total amount of 1100 EUR (mobility & family allowance) to pay the rent. The remaining 350 EUR must be paid as part of the salary (or in another acceptable form). Example: Researcher Y intends to travel to his/her home country for the summer holidays. S/he requests the beneficiary to directly purchase the tickets for him/her, and the beneficiary agrees to do so. The tickets cost 450 EUR and the beneficiary pays the remaining 150 EUR of the mobility allowance as part of the salary (or in another acceptable form). For a beneficiary with accounting in a currency other than the euro:  if a daily rate is published in the in the C series of the Official Journal of the European Union for the currency in question: costs must be converted into euro at the average of the daily exchange rates published over the corresponding reporting period, as reported on the ECB website94  if no daily rate is published: amounts must be converted at the average of the monthly accounting rates over the reporting period, using the currency converter on the Commission’s website95. 94 Available at http://www.ecb.europa.eu/stats/exchange/eurofxref/html/index.en.html 95 Available at http://ec.europa.eu/budget/contracts_grants/info_contracts/inforeuro/inforeuro_en.cfm Usually, payment as part of the salary is the simplest way to pay these allowances. H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-IF 420 For ease of implementation, the monthly allowances for the recruited researcher can be calculated using a conservative exchange rate, if a corrective payment is then made (to the researcher) immediately after the end of the reporting period. This must be clearly explained in the contract or fixed-amount-fellowship agreement. Example: Researcher X is recruited in a country outside the euro-zone. The average exchange rate is normally EUR 0.9 but this fluctuates from time to time. In order to ensure that the fellow receives a regular monthly income and to avoid exchange rate losses, the beneficiary chooses to apply a conservative exchange rate of EUR 0.87 and to make a payment to correct any underpayment at the end of the reporting period. The fellow is fully informed of this procedure at the time of recruitment. The Agency will check if the allowances are used fully for the benefit of the researcher. Any underpayments, if not corrected, may lead to a rejection of costs (for the researcher). 1.4 The costs are calculated (automatically by the IT system) as follows:  for the living allowance: amount per unit (see Annex 2) x number of months actually spent by the researchers on the research activities (‘number of implemented person-months’)  for the mobility allowance: amount per unit (see Annex 2) x number of implemented person-months Other conditions — Although NOT formal cost eligibility conditions for MSCA-IF (because already checked by the Agency during the selection procedure), the recruited researcher must — at the time of the call deadline —:  comply with the mobility rule, i.e. not have resided or carried out his/her main activity (work, studies, etc.) in the country of the beneficiary for more than 12 months in the three years immediately prior to the call deadline Beneficiaries that are ‘international European interest organisations’ or international organisations — The researcher may not have spent more than 12 months with the beneficiary in the three years immediately before the call deadline. EF Career Restart Panel and Reintegration Panel — The researcher may not have resided or carried out his/her main activity in the country of the beneficiary for more than three years in the five years immediately before the call deadline. GF — The researcher must comply with the mobility rule with regard to the country of the partner organisation (i.e. where the outgoing phase takes place), not for the country of the beneficiary (i.e. where the return phase takes place). Researchers that are refugees — For refugees under the Geneva Convention (1951 Refugee Convention and the 1967 Protocol), the refugee procedure (i.e. before refugee status is conferred) will not be counted as ‘period of residence/activity in the country of the beneficiary’.  for GF and EF Reintegration Panel: be nationals or long-term residents of a Member State or an associated country. ‘Long-term resident’ means full-time research activity in a Member State (or associated country) for five or more consecutive years.  for EF Reintegration Panel: not have been active in research for at least 12 months immediately before the call deadline  for the family allowance: have a family, i.e.:  be married  be in a partnership with equivalent status to marriage as recognised by the legislation of the country or region in which it was formalised or  have dependent children for whose maintenance s/he is actually responsible under national law. . H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-IF 421  for the family allowance: amount per unit (see Annex 2) x number of implemented person-months For partial months of recruitment, a pro-rata unit cost of 1/30 will be reimbursed for each day (for ease of implementation, each month is considered to have 30 days). Example: If the researcher spent 20 months and 15 days on the project, the calculation for the 15 days is: 15/30 = 0.5. In this case, insert ‘20.5’ as number of person-months. The beneficiary may NOT declare more than 24 person-months for the researcher (or 36 months for GF). (Person-months exceeding this number will be rejected by the Agency.) H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-IF 422 1. Institutional costs: Types of costs — Cost form — Conditions for eligibility — Cost calculation 1.1 What? This budget category covers:  research, training and networking costs, i.e.:  costs for training and networking activities that contribute directly to the researcher’s career development (e.g. participation in conferences, trips related to the work of the action, training, language courses, seminars, lab material, books, library records, publication costs)  costs for research expenses  management and indirect96 costs (i.e. the beneficiary’s additional costs in connection with the action). 1.2 The costs must be declared on the basis of the unit costs fixed by Commission Decision C(2013) 819497 and set out in Annex 2 and 2a of the GA (currently:  for research, training and networking costs: EUR 800 for the researcher per month (‘person-month’)  for management and indirect costs: EUR 650 per person-month (for beneficiaries that already receive an EU/Euratom operating grant98: this amount is halved, i.e. EUR 325)). In practice, the declaration of institutional costs for MSCA grants is completely automatised because the IT system automatically calculates them on the basis of the number of person- months declared for the researcher cost. 96 For the definition, see Article 6.2 of the H2020 General MGA: ‘indirect costs’ are costs that are not directly linked to the action implementation and therefore cannot be attributed directly to it. 97 Available at http://ec.europa.eu/research/participants/data/ref/h2020/other/legal/unit_costs/unit- costs_msca_en.pdf 98 For the definition, see Article 121(1)(b) of the Financial Regulation No 966/2012: ‘operating grant’ means direct financial contribution, by way of donation, from the budget in order to finance the functioning of a body which pursues an aim of general EU interest or has an objective forming part of and supporting EU policy. B. Institutional costs (B.1 Research, training and networking costs and B.2 Management and indirect costs) are eligible if the costs for the recruited researcher (living allowance, mobility allowance, family allowance; see above) are eligible. Budget flexibility — Since MSCA-IF uses unit costs, there is some flexibility as regards the use of the amounts received:  The unit cost for research, training and networking should be used for the research, training and networking activities foreseen in Annex 1, but unused amounts may be used for other action- related purposes, for instance to increase the salary of the researcher or to organise additional training activities.  The unit cost for management and indirect costs should be used for the management of the action, but unused amounts may also be used for other action-related purposes, for example, to increase the salary of the researcher. Management and indirect costs should be shared with partner organisations which incurred management or indirect costs for secondments (see Article 8). . H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-IF 423 1.3 The eligibility of the institutional costs is directly linked to and conditional on the eligibility of the costs for the recruited researcher. Institutional costs (research training and networking costs, management and indirect costs) are eligible only if all the eligibility conditions for the recruited researcher are met. Person- months which are not eligible for the budget category ‘costs for the recruited researcher’ are also not eligible for the budget category ‘institutional costs’. Institutional costs can NOT be claimed separately (e.g. management and indirect costs cannot be claimed without living allowance, etc.). 1.4 The costs are calculated (automatically by the IT system) like the costs for recruited researchers:  for the research, training and networking costs: amount per unit (see Annex 2) x number of implemented person-months (declared for the researcher cost)  for the management and indirect costs: amount per unit (see Annex 2) x number of implemented person-months (declared for the researcher cost) 6.3 Ineligible costs ‘Ineligible costs’ are: (a) costs that do not comply with the conditions set out above (in Article 6.1), and in particular costs incurred during suspension of the action implementation (see Article 49); (b) costs reimbursed under another EU or Euratom grant (including grants awarded by a Member State and financed by the EU or Euratom budget and grants awarded by bodies other than the Agency for the purpose of implementing the EU or Euratom budget), in particular, management and indirect costs if the beneficiary is already receiving an operating grant financed by the EU or Euratom budget in the same period. (c) [OPTION for cost categories explicitly excluded in the work programme: [insert name of excluded cost category]]. 6.4 Consequences of declaration of ineligible costs Declared costs that are ineligible will be rejected (see Article 42). This may also lead to any of the other measures described in Chapter 6. H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-IF 424 ARTICLE 8 — RESOURCES TO IMPLEMENT THE ACTION — THIRD PARTIES INVOLVED IN THE ACTION 1. Appropriate own resources — Use of third party resources — Third parties involved in the action The rules of the General MGA on third party involvement do not apply. Specific cases (third parties involved in the action): Partner organisations — MSCA-IF allow nevertheless for the involvement of partner organisations (i.e. organisations that are not beneficiaries, but that provide training and host researchers during a secondment; see Article 32). Partner organisations are not explicitly mentioned as third parties in the GA, since no additional costs arise for the action. Their costs are covered by the unit costs paid to the beneficiary. Partner organisations can NOT employ the researcher under the action. (For GF: this does not however prevent a partner organisation in a third country from contributing to the income of the researcher, in line with Article 32.1(c)(v)) For GF: the partner organisation must be located in a third country and must be described in Annex 1. ARTICLE 8 — RESOURCES TO IMPLEMENT THE ACTION — THIRD PARTIES INVOLVED IN THE ACTION Not applicable The beneficiary remains fully responsible for the implementation of the action in accordance with the GA. Best practice: In order to be able to fulfil this obligation, the beneficiary should establish internal arrangements (e.g. partnership agreements) with partner organisations. H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-IF 425 ARTICLE 18 — KEEPING RECORDS — SUPPORTING DOCUMENTATION 1. Records and other supporting documentation For MSCA-IF, simplified rules on record-keeping apply: The beneficiary only needs to keep appropriate and sufficient evidence to prove that the person-months declared are correct, i.e.:  the employment contract (or other suitable documents, e.g. fixed-fellowship agreement)  proof that:  the eligibility conditions for the researcher were complied with (e.g. CV showing the researcher’s seniority, copies of diplomas)  the researcher actually worked on the action (e.g. lab books, scientific articles, library records)  the obligations set out in Article 32 were complied with  the living, mobility and family allowances (including the employer’s compulsory social security payments) were fully paid to the researcher This evidence must be verifiable, auditable and available. It must be correctly archived — for at least five years after the balance is paid (three years for grants up to EUR 60 000) or longer if:  national laws foresee longer document retention periods (e.g. for tax or social security purposes)  there are ongoing procedures (such as audits, investigations or litigation). (In this case the evidence must be kept until these end.) Costs that are not supported by appropriate and sufficient evidence may be rejected (and other measures described in Chapter 6 may be applied as well). Beneficiaries that throw supporting documents away during the retention period bear the full risk of rejection by the Agency. . ARTICLE 18 — KEEPING RECORDS — SUPPORTING DOCUMENTATION […] 18.1.2 Records and other documentation to support the costs declared The beneficiary must keep adequate records and other supporting documentation to prove the number of units declared and that the costs for the recruited researcher (living allowance, mobility allowance, family allowance) have been fully incurred for the benefit of the researcher. […] H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-IF 426 ARTICLE 25 — ACCESS RIGHTS TO BACKGROUND ARTICLE 31 — ACCESS RIGHTS TO RESULTS 1. Access rights for the researcher In view of the key role of the recruited researcher in MSCA-IF, the MSCA-IF MGA foresees special access rights for him/her (in addition to those of the General MGA; see Articles 25 and 31 H2020 General MGA): The beneficiary must give the recruited researcher access to both background AND results necessary for his/her research training activities. ‘Background’ means any data, know-how or information — whatever its form or nature (tangible or intangible), including any rights such as intellectual property rights — that:  is held by the beneficiary before they accede to the GA (i.e. before grant signature)  is needed to implement the action or exploit the results AND that  has been identified by the beneficiary in accordance with Article 24. ‘Results’ means any (tangible or intangible) output of the action, such as data, knowledge or information — whatever its form or nature, whether it can be protected or not — that is generated in the action as well as any rights attached to it, including intellectual property rights. ARTICLE 31 — ACCESS RIGHTS TO RESULTS […] 31.6 Access rights for the researcher The beneficiary must — on a royalty-free basis — give, access to the recruited researcher to results necessary for the research training activities under the action. […] ARTICLE 25 — ACCESS RIGHTS TO BACKGROUND […] 25.5 Access rights for the researcher The beneficiary must — on a royalty-free basis — give access to the recruited researcher to background necessary for their research training activities under the action. […] H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-IF 427 ARTICLE 32 — RECRUITMENT AND WORKING CONDITIONS FOR THE RECRUITED RESEARCHER ARTICLE 32 — RECRUITMENT AND WORKING CONDITIONS FOR THE RECRUITED RESEARCHER 32.1 Obligations towards the recruited researcher The beneficiary must respect the following recruitment and working conditions for the researcher recruited under the action: (a) take all measures to implement the principles set out in the Commission Recommendation on the European Charter for Researchers and the Code of Conduct for the Recruitment of Researchers and ensure that the researcher is aware of them; (b) ensure that the researcher enjoys at the place of the implementation at least the same standards and working conditions as those applicable to local researchers holding a similar position; (c) ensure that the employment contract, other direct contract or fixed-amount-fellowship agreement (see Article 6) specifies: (i) the name of the supervisor for the research training activities as indicated in Annex 1; (ii) the starting date and duration of the research training activities under the action; (iii) the monthly support for the researcher under this Agreement (in euro and, if relevant, in the currency in which the remuneration is paid); (iv) the obligation of the researcher to work exclusively for the action; (v) the obligation of the researcher not to receive for activities carried out in the frame of the action, other incomes than those received from the beneficiary (or any other entity referred to in Annex 1); (vi) the obligation of the researcher to inform the beneficiary as soon as possible of any events or circumstances likely to affect the Agreement (see Article 17); (vii) the arrangements related to the intellectual property rights between the beneficiary and the researcher — during implementation of the action and afterwards; (viii) the obligation of the researcher to maintain confidentiality (see Article 36); (ix) the obligation of the researcher to ensure the visibility of EU funding in communications or publications and in applications for the protection of results (see Articles 27, 28, 29 and 38); (x) [OPTION for GF: the obligation of the researcher to carry out a mandatory return period of 12 months at the premises of the beneficiary;] (d) assist the researcher in the administrative procedures related to the recruitment; (e) inform the researcher about: - the description, conditions, location and the timetable for the implementation of the research training activities under the action and the name of the supervisor; - the rights and obligations of the beneficiary toward the researcher under this Agreement; - the obligation of the researcher to complete and submit — at the end of the research training activities — the evaluation questionnaire and — two years later — follow-up questionnaire provided by the Agency; H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-IF 428 1. Recruitment and working conditions — Rights for the researcher In view of the key role of the recruited researcher in MSCA-IF, the MSCA-IF MGA foresees a series of obligations in order to guarantee objective selection procedures and best possible working conditions for him/her. Main obligations (towards the researcher):  Ensure that the researcher enjoys at the place of the implementation at least the same standards and working conditions as those applicable to local researchers holding a similar position  Host the researcher at its premises and provide training as well as the necessary means for implementing the action If the Agency finds that the beneficiary is not supporting the research training activities in line with Annex 1 to the GA, it may reduce the grant.  Ensure that the researcher is adequately supervised  Ensure that — at the beginning of the research training activities — a career development plan is established and support its implementation  Support secondments of the researcher, if any (and, for GF, support his/her return during a mandatory ‘return-period’ of 12 months) Researchers may be seconded to a partner organisation established in a EU Member State or H2020 associated country (see Article 8):  if this is provided for in Annex 1 to the GA  for a maximum of three months in an action with a duration of up to 18 months, or up to six months in an action of up to 24 months (f) ensure that the researcher does not receive, for activities carried out in the frame of the action, other incomes than those received from the beneficiary (or any other entity referred to in Annex 1); (g) host the researcher at its premises and provide training as well as the necessary means for implementing the action; (h) ensure that the researcher is adequately supervised; (i) ensure that — at the beginning of the research training activities — a career development plan is established together with the supervisor; (j) support the secondment of the researcher in Member State or associated country as set out in Annex 1: - for actions with a duration up to 18 months: for a maximum of three months or - for actions with a duration of more than 18 months: for a maximum of six months; (k) [OPTION for GF: support the return of the researcher to its premises to carry out a mandatory return period of 12 months.] […] 11 Commission Recommendation 2005/251/EC of 11 March 2005 on the European Charter for Researchers and on a Code of Conduct for the Recruitment of Researchers (OJ L 75, 22.3.2005, p. 67). H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-IF 429  Comply with the arrangements on intellectual property rights. Assistance with intellectual property rights can be obtained via the IPR Helpdesk99.  Assist the researcher in the administrative procedures related to his/her recruitment (e.g. helping with visa procedures or preparing the career development plan) Assistance with relocating researchers can be obtained via EURAXESS Services100.  Inform the researcher about key elements of the grant Thus, the beneficiary must provide the researcher with information on:  basic facts about the Marie Skłodowska-Curie actions, to make the researcher aware that s/he is a MSCA fellow, including:  the researcher’s rights and obligations and  where to look for details (MSCA website, Participant Portal, Marie Curie Alumni Association (MCAA), etc.)  the specific action in question (e.g. planned secondments, events, etc.) and  whom they have appointed to supervise him/her for the duration of the research training activities, including during secondments to partner organisations. Moreover, the employment contract/equivalent direct contract (or fixed-amount-fellowship agreement) contract must clearly state:  the starting date of research training activities under the action and its duration The starting date and duration must match those in Article 3 of the GA.  the allowances that the researcher is entitled to receive (and if this is paid in a currency other than the euro, the exchange rate; for the exchange rate, see Article 6). The employment contract can state the total/annual salary — as long as it is possible to determine the monthly salary (e.g. by dividing the annual salary by 12).  Ensure that the researcher does NOT receive, for activities carried out in the frame of the action, other incomes than those received from the beneficiary (or any other entity referred to in Annex 1) 2. Employment contract — Obligations on the researcher The MSCA-IF GA foresees that there must be an employment contract/equivalent direct contract (or fixed-amount-fellowship agreement), in order to formalise the commitments in the GA also towards the researcher. Main obligations (of the researcher):  Work exclusively on the research training activities This also means that a researcher can NOT hold two MSCA grants at the same time, or engage in another professional activity or employment.  Not receive (for activities carried out in the frame of the action) other incomes than those received from the beneficiary (or any other entity referred to in Annex 1) Example: If the researcher’s allowances fall short of the legal minimum salary in the country in question, the beneficiary (or other entity in Annex 1) may pay a top-up to make up the difference. 99 Available at https://www.iprhelpdesk.eu/. 100 Available at http://ec.europa.eu/euraxess/. The beneficiary remains fully responsible for the action implementation (in accordance with the GA) also during a secondment. H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-IF 430  Inform the beneficiary as soon as possible of any events or circumstances likely to affect the GA (such as, significant changes to their career development plan or personal circumstances affecting the foreseen activities)  Comply with the arrangements related to the intellectual property rights  Maintain confidentiality  Ensure the visibility of EU funding The researcher must acknowledge funding under the MSCA in publications, communications or patent applications.  Complete and submit — at the end of the training — the evaluation questionnaire and — two years later — follow-up questionnaire provided by the Agency. H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-IF 431 ARTICLE 38 — PROMOTING THE ACTION — VISIBILITY OF EU FUNDING 1. Communication activities (by the beneficiaries) — Promoting the action — Mainstream media coverage For MSCA, the rules for promoting the actions are in principle the same as in the General MGA (see Article 38.1.1 H2020 General MGA). ARTICLE 38 — PROMOTING THE ACTION — VISIBILITY OF EU FUNDING 38.1 Communication activities by the beneficiaries 38.1.1 Obligation to promote the action and its results The beneficiary must promote the action and its results, by providing targeted information to multiple audiences (including the media and the public) in a strategic and effective manner. This does not change the dissemination obligations in Article 29, the confidentiality obligations in Article 36 or the security obligations in Article 37, all of which still apply. Before engaging in a communication activity expected to have a mainstream media coverage the beneficiary must inform the Agency (see Article 52). 38.1.2 Information on EU funding — Obligation and right to use the EU emblem Unless the Agency requests or agrees otherwise or unless it is impossible, any communication activity related to the action (including in electronic form, via social media, etc.) and any infrastructure, equipment and major results funded by the grant must: (a) display the European Union emblem and (b) include the following statement: For communication activities: “This project has received funding from the European Union’s Horizon 2020 research and innovation programme under the Marie Skłodowska-Curie grant agreement No [number].” For infrastructure, equipment and major results: “This [infrastructure][equipment][insert type of result] is part of a project that has received funding from the European Union’s Horizon 2020 research and innovation programme under the Marie Skłodowska-Curie grant agreement No [number].” When displayed together with another logo, the EU emblem must have appropriate prominence. For the purposes of its obligations under this Article, the beneficiary may use the EU emblem without first obtaining approval from the Agency. This does not, however, give it the right to exclusive use. Moreover, it may not appropriate the EU emblem or any similar trademark or logo, either by registration or by any other means. […] H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-IF 432 However, the beneficiary must inform the Agency not only before a communication activity expected to have a major media impact, but before any activity expected to have mainstream media coverage (i.e. coverage in any forms of media (e.g. print, TV, radio and electronic) addressing a non-specialist, non-scientific audience (e.g. local, regional or national news). (This allows the Agency to ensure maximum publicity and to disseminate the coverage further through social media, news updates, etc.). 2. Visibility of EU funding For MSCA, the same rules on visibility of EU funding apply as in the General MGA (see Articles 27.3, 28.2, 29.4 and 38.1.2 H2020 General MGA). In addition, the beneficiary must however make specific reference to the MSCA grant. Thus, the clause acknowledging EU funding is slightly adapted. H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-IF 433 ARTICLE 49 — SUSPENSION OF THE ACTION IMPLEMENTATION 1. Suspension of the action implementation — Additional grounds for suspension: Professional, personal or family reasons In addition to the normal grounds for suspension of the action implementation (see Article 49 H2020 General MGA), beneficiaries of MSCA-IF may request suspension for professional, personal or family grounds of the recruited researcher (including parental leave or another professional opportunity). ARTICLE 49 — SUSPENSION OF THE ACTION IMPLEMENTATION 49.1 Suspension of the action implementation by the beneficiary 49.1.1 Conditions — Procedure 49.1.1.1 The beneficiary may suspend implementation of the action or any part of it, if exceptional circumstances — in particular force majeure (see Article 51) — make implementation impossible or excessively difficult. In this case, the beneficiary must immediately formally notify suspension to the Agency (see Article 52), stating: (a) the reasons why and (b) the expected date of resumption. The suspension will take effect the day this notification is received by the Agency. Once circumstances allow for implementation to resume, the beneficiary must immediately formally notify the Agency and request an amendment of the Agreement to set the date on which the action will be resumed, extend the duration of the action and make other changes necessary to adapt the action to the new situation (see Article 55) — unless the Agreement or the participation of a beneficiary has been terminated (see Article 50). The suspension will be lifted with effect from the resumption date set out in the amendment. This date may be before the date on which the amendment enters into force. Costs incurred during suspension of the action implementation are not eligible (see Article 6). 49.1.1.2 The beneficiary may request suspension of the action implementation (or any part of it) for professional, personal or family reasons (including parental leave) of the recruited researcher. For this purpose, the beneficiary must formally notify a request for amendment (to make the necessary changes and to set the date of resumption) in accordance with Article 55. The suspension will take effect on the date set out in the amendment. Costs incurred during suspension of the action implementation are not eligible (see Article 6). […] H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-IF 434 2. Procedure The beneficiary must submit a request for amendment, indicating:  the starting and end date of the suspension and  the ‘resumption date’ when the action is resumed (i.e. automatically one day after the end date). In principle, suspensions (other than for parental leave) should not exceed 30 % of the action duration. For the amendment, the rules of the General MGA apply (see Article 55 H2020 General MGA). 3. Effects Costs incurred during the suspension are not eligible (see Article 6.3). H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-IF 435 ARTICLE 55 — AMENDMENTS TO THE AGREEMENT 1. Amendments — Additional grounds for amendments: Change to part-time employment For MSCA-IF, the beneficiary may request an amendment to change the time the researcher spends on the action (i.e. from full-time to part-time, part-time to full-time or to a different percentage of part-time), on personal or family grounds (including parental leave). Such amendments are NOT possible for any other reasons (e.g. other professional opportunities, etc.). In those cases, the beneficiary must request suspension of the action implementation or termination of the action. ARTICLE 55 — AMENDMENTS TO THE AGREEMENT 55.1 Conditions The Agreement may be amended, unless the amendment entails changes to the Agreement which would call into question the decision awarding the grant or breach the principle of equal treatment of applicants. Amendments may be requested by any of the parties. The beneficiary may, in particular, request a change of the time spent on the action (part-time employment) for personal or family reasons (including parental leave). […] H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-IF 436 ARTICLE 56a — TRANSFER OF THE AGREEMENT TO A NEW BENEFICIARY 1. Transfer of the GA MSCA-IF grants can be transferred to a new beneficiary. ARTICLE 56a — TRANSFER OF THE AGREEMENT TO A NEW BENEFICIARY 56a.1 Conditions The beneficiary may request that the research training activities are transferred to a new beneficiary, if there are serious reasons affecting its capacity to implement the action (without being entitled to any additional EU funding for doing so). 56a.2 Procedure The beneficiary must formally notify a request for amendment to the Agency (see Article 55). The request must include: - the reasons why; - the date the change takes effect; - the opinion of the researcher and its supervisor; - a proposal for the necessary changes, including — if necessary — the appointment of the new supervisor and a statement from the new beneficiary to take over all rights and obligations under the Agreement. The change will take effect on the day set out in the amendment. 56a.3 Effects If the request for amendment is accepted by the Agency, the Agreement will be amended to introduce the necessary changes in order to reallocate the tasks of the former beneficiary (see Article 55). In this case, the former beneficiary must: - transfer immediately the remaining contribution to the new beneficiary and - submit — within 30 days from the change — a ‘transfer report’, containing an overview of the progress of the work and the individual financial statement (see Article 20). The maximum grant amount will be split between the former beneficiary and the new beneficiary, on the basis of the number of actual units in line with Article 6. The maximum grant amount set out in Article 5.1 will be decreased if a lower country correction coefficient is applicable to the new beneficiary. The former and the new beneficiary must agree on arrangements concerning the management of intellectual property rights and other issues under the Agreement. If the Agency considers that the reasons provided do not justify the transfer, it will reject the request specifying the grounds for the rejection. H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-IF 437 The transfer may be based on any ground that is linked to the beneficiary and affects the researcher’s ability to perform the activities. Examples: Internal reorganisation affecting implementation of the project; dismantling of the research team involved in the action; departure of the supervisor from the beneficiary’s premises; serious conflict between the researcher and the supervisor. Personal circumstances of the researcher are NOT considered valid grounds for transferring the GA to a new beneficiary. (These must be addressed by suspending the action (see Article 49.1) or a switch to part-time employment (see Article 55), so that the researcher can benefit from other professional opportunities or better reconcile work and family commitments without having to forego the grant). The transfer may NOT entail changes to the GA which would call into question the decision to award the grant or breach the principle of equal treatment of applicants. Example: The transfer will not be accepted if the new beneficiary does not fulfil the eligibility criteria or financial and operational capacity. 2. Procedure The former beneficiary must submit a request for amendment to the Agency. For the amendment, the rules of the General MGA apply (see Article 55 H2020 General MGA). The amendment request must include the Accession Form (i.e. the statement to take over all rights and obligations under the Agreement) of the new beneficiary (signed in the Participant Portal). 3. Effects The transfer may result in a reduction of the maximum grant amount (see Article 5.1), if the correction coefficient for the country of the new beneficiary is lower than the one of the former beneficiary. After approval of the amendment, the former beneficiary must:  transfer the remaining contribution to the new beneficiary and  submit a report to the Agency, including:  an overview of progress on results and  a financial statement up to the date of the transfer. By contrast, the maximum grant amount will NOT be increased if the country correction coefficient (CCC) for the country of the new beneficiary is higher. In order to allow the new beneficiary to pay the higher CCC , the action duration can be reduced accordingly. (If, by contrast, the initial action duration is not changed, the beneficiary must top-up the salary of the researcher and pay the difference between the former and the new CCC (using e.g. the management and indirect costs). The rights and obligations under the GA are transferred from the beneficiary to a new beneficiary — without passing via ‘termination’ (Article 50) or ‘addition of a new beneficiary’ (Article 56). NO transfer before the amendment has been accepted by the Agency. Any interruption of the action implementation due to an unauthorised transfer is a breach of contractual obligations and the former beneficiary bears the full responsibility for any activity/commitment undertaken before the Agency has approved the amendment.) H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-RISE 438 III.4 H2020 MGA MSCA-RISE: Annotations ARTICLE 2 — ACTION TO BE IMPLEMENTED 1. Action: MSCA-RISE What? MSCA-RISE funds:  the exchange of staff members (between beneficiaries or between a beneficiary and a partner organisation) for research and innovation activities (‘secondments’). MSCA-RISE are multi-beneficiary actions. They are funded under Part I of the Horizon 2020 Framework Programme, ‘Marie Skłodowska- Curie actions’ (e.g. H2020-MSCA-RISE-2014). For more information on MSCA-RISE, see the Online Manual and the H2020 grants fact sheets on the Participant Portal. For more information on the conditions for participation and funding, see the Online Manual or the Main Work Programme — MSCA and the call and topics pages of the call. ARTICLE 2 — ACTION TO BE IMPLEMENTED The grant is awarded for the action entitled [insert title of the action] — [insert acronym] (‘action’), as described in Annex 1. H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-RISE 439 ARTICLE 4 — ESTIMATED BUDGET AND BUDGET TRANSFERS 1. Budget categories The MSCA-RISE MGA does not use the budget categories of the General MGA. Budget categories of the MSCA-RISE MGA:  costs for seconded staff members  institutional costs. 2. Budget transfers The beneficiaries may re-distribute person-months between them (as compared with the original planning set out in Annex 2). This re-distribution can be done without requesting an amendment (see Article 55) provided that it does not imply a substantial change to the action as described in Annex 1. Best practice: The coordinator should inform the Agency in advance of any redistribution of person-months, in order to establish if an amendment is needed. Changes that only concern the consortium-internal arrangements on the distribution of the ‘institutional costs’ do NOT need to be notified to the Agency. Example: Beneficiary A plans to second 24 person-months, but can finally only implement 22. At the same time, beneficiary B is able to implement 2 additional person-months compared to the original planning. In this case, the budget transfer between the beneficiaries is possible without an amendment. A re-distribution of person-months will also have an impact on the institutional unit costs (since they are also paid according to the person-months declared for seconded staff members). Re-distributions are subject to the following: The budget categories are relevant for the estimated budget (Article 4 and Annex 2), forms of costs (Article 5), cost eligibility rules (Article 6.2) and the cost declarations (i.e. financial statements; Article 20 and Annex 4). . The maximum grant amount (see Article 5) can however NEVER be increased. . ARTICLE 4 — ESTIMATED BUDGET AND BUDGET TRANSFERS 4.1 Estimated budget The ‘estimated budget’ for the action is set out in Annex 2. It contains the estimated eligible costs and the forms of costs, broken down by beneficiary and budget category (see Articles 5, 6). 4.2 Budget transfers The estimated budget breakdown indicated in Annex 2 may be adjusted by transfers of amounts between the beneficiaries. This does not require an amendment according to Article 55, if the action is implemented as described in Annex 1. H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-RISE 440  no impact on the action as described in Annex 1 If the transfer of person-months implies a substantial change to the action as described in Annex 1, a formal amendment will be required.  the minimum and maximum secondment duration. Transfers between budget categories are formally NOT possible, because all budget categories are all linked to the same person-months declared for the seconded staff. (It is therefore technically not possible to move budgeted amounts from one budget category to another.) Budget flexibility — Since MSCA-RISE uses unit costs, there is however some flexibility as regards the use of the amounts received:  The unit cost for the seconded staff members (i.e. top-up allowance) must be fully used for each staff member. They can NOT be used to pay other staff members or other types of costs (see Article 32).  The unit cost for research, training and networking should be used for the research, training and networking activities foreseen in Annex 1, but unused amounts may be used for other action- related purposes, for instance to cover travel and subsistence costs of a staff member or to organise additional training activities.  The unit cost for management and indirect costs should be used for the management of the action, but unused amounts may also be used for other action-related purposes, for example, to cover travel and subsistence costs a staff member. Re-distributions of management and indirect costs within the consortium are allowed, but should be done via an internal agreement and should roughly correspond to the actual division of (management) tasks within the consortium. Management and indirect costs should also be shared with partner organisations which incurred management or indirect costs for secondments (see Article 8). . H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-RISE 441 ARTICLE 5 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATES AND FORMS OF COSTS 1. Reimbursement rate How much? For MSCA-RISE, the reimbursement rate is set at 100% (see the Main Work Programme — MSCA). 2. Cost forms The MSCA MGAs do not use the cost forms of the General MGA, but the unit costs set out in Commission Decision C(2013) 8194101. For MSCA-RISE these are unit costs for:  costs for seconded staff members: top-up allowance  institutional costs: research, training and networking costs and management and indirect costs. These are fixed amounts that must be multiplied by the number of months the staff were seconded and spent on research and innovation activities (‘person-months’); they cannot be changed. The conditions for eligibility are set out in Article 6. 101 Available at http://ec.europa.eu/research/participants/data/ref/h2020/other/legal/unit_costs/unit- costs_msca_en.pdf ARTICLE 5 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATES AND FORMS OF COSTS […] 5.2 Form of grant, reimbursement rate and form of costs The grant reimburses 100 % of the action’s eligible costs (see Article 6) (‘reimbursement of eligible costs grant’) (see Annex 2). The estimated eligible costs of the action are EUR [insert amount (insert amount in words)]. Eligible costs (see Article 6) must be declared under the following forms (‘form of costs’): (a) for costs for seconded staff members: on the basis of the amount(s) per unit set out in Annex 2 (‘unit costs’) and (b) for institutional costs (research, training and networking costs, management and indirect costs): on the basis of the amount per unit set out in Annex 2 (unit costs). H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-RISE 442 1. Final grant amount For MSCA, the rules on the calculation of the final grant amount are in principle the same as in the General MGA (see Article 5.3 H2020 General MGA). However, since MSCA uses only unit costs, there is NO reduction due to the no-profit rule in MSCA MGAs (Step 3 of Article 5.3 of the General MGA). 5.3 Final grant amount — Calculation The ‘final grant amount’ depends on the actual extent to which the action is implemented in accordance with the Agreement’s terms and conditions. This amount is calculated by the Agency — when the payment of the balance is made (see Article 21.4) — in the following steps: Step 1 — Application of the reimbursement rate to the eligible costs Step 2 — Limit to the maximum grant amount Step 3 — Reduction due to improper implementation or breach of other obligations 5.3.1 Step 1 — Application of the reimbursement rates to the eligible costs The reimbursement rate (see Article 5.2) is applied to eligible costs (unit costs; see Article 6) declared by the beneficiaries and approved by the Agency (see Article 21). 5.3.2 Step 2 — Limit to the maximum grant amount If the amount obtained following Step 1 is higher than the maximum grant amount set out in Article 5.1, it will be limited to the latter. 5.3.3 Step 3 — Reduction due to improper implementation or breach of other obligations — Reduced grant amount — Calculation If the grant is reduced (see Article 43), the Agency will calculate the reduced grant amount by deducting the amount of the reduction (calculated in proportion to the improper implementation of the action or to the seriousness of the breach of obligations in accordance with Article 43.2) from the maximum grant amount set out in Article 5.1. The final grant amount will be the lower of the following two: - the amount obtained following Steps 1 and 2 or - the reduced grant amount following Step 3. […] H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-RISE 443 ARTICLE 6 — ELIGIBLE AND INELIGIBLE COSTS 1. Eligible costs The grant can only reimburse eligible costs (i.e. costs that comply with the general and specific conditions set out in this Article) (‘reimbursement of eligible costs grant’). Article 6.1 refers to general eligibility conditions applicable per cost form (for MSCA: only unit costs; see Article 5). Article 6.2 refers to specific eligibility conditions applicable per budget category (see Article 4). 2. General conditions for unit costs to be eligible The general conditions for eligibility of unit costs are the same as in the General MGA (see Article 6.1 H2020 General MGA). ONLY eligible costs may be entered into the estimated budget for the action (see Article 4) or declared in the financial statements (see Article 20). Moreover, the burden on proof for eligibility is on the beneficiaries (and linked third parties). They must keep sufficient supporting documents (see Article 18) to show that the person-months they declare are eligible. Compliance with eligibility rules may be subject to a check or audit by the Commission/Agency. Any ineligible costs found will be rejected (see Article 42). . ARTICLE 6 — ELIGIBLE AND INELIGIBLE COSTS 6.1 General conditions for costs to be eligible Unit costs are eligible (‘eligible costs’), if: (i) they are calculated as follows: {amounts per unit set out in Annex 2 multiplied by the number of actual units}. (ii) the number of actual units complies with the following: - the units must be actually used or produced in the period set out in Article 3; - the units must be necessary for implementing the action or produced by it, and - the number of units must be identifiable and verifiable, in particular supported by records and documentation (see Article 18). H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-RISE 444 1. Specific conditions for costs to be eligible Article 6.2 refers to specific eligibility conditions applicable per budget category. The MSCA MGAs have their own budget categories, with their own types of costs, conditions for eligibility and rules for cost calculation. For ease of reference, the annotations for Article 6.2 will summarise — for each budget category — the information necessary to establish the eligible costs, i.e.  types of costs covered by the budget category  cost form under which the costs must be declared (for MSCA: unit costs)  conditions for eligibility  how the costs must be calculated. 6.2 Specific conditions for costs to be eligible Costs are eligible, if they comply with the general conditions (see above) and the specific conditions set out below for each of the following two budget categories: H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-RISE 445 1. Costs for seconded staff members: Types of costs — Cost form — Conditions for eligibility — Cost calculation 1.1 What? This budget category covers the costs for the seconded staff members (by providing for: A. Costs for seconded staff members are eligible, if: (a) the number of units declared: (i) corresponds to the actual number of months spent by the seconded staff members on the research and innovation activities and (ii) does not exceed 12 months (per seconded staff member); (b) the seconded staff members comply — at the date of secondment — with the following conditions: (i) be one of the following: - an ‘early stage researcher’ (i.e. in the first four years of his/her research career and not have a doctoral degree); - an ‘experienced researcher’ (i.e. in possession of a doctoral degree or have at least four years of research experience), or - administrative, managerial or technical staff supporting research and innovation activities under the action, and (ii) have been actively engaged in or linked to research and innovation activities for at least 6 months at the beneficiary or a partner organisation; (c) the secondment complies with the following conditions: (i) last at least 1 month and no longer than 12 months; (ii) be between: - a beneficiary established in a EU Member State (or associated country6) and a beneficiary established in another EU Member State (or associated country) from different sectors (academic and non-academic) or - a beneficiary established in a EU Member State (or associated country) and a partner organisation established in a non-EU Member State (or non-associated country), and (iii) the beneficiary or partner organisation sending the person is established in a country listed in General Annex A of the Main Work Programme. 6 For the definition, see Article 2.1(3) of Regulation (EU) No 1290/2013 of the European Parliament and of the Council of 11 December 2013 laying down the rules for participation and dissemination in “Horizon 2020 - the Framework Programme for Research and Innovation (2014- 2020)” (‘Rules for Participation Regulation No 1290/2013’) (OJ L 347, 20.12.2013 p.81): ‘associated country’ means a third country which is party to an international agreement with the Union, as identified in Article 7 of the H2020 Framework Programme Regulation No 1291/2013. Article 7 sets out the conditions for association of non-EU countries to Horizon 2020. H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-RISE 446  a monthly top-up allowance for travel, accommodation and subsistence costs relating to the secondment. What not? Costs of the beneficiaries for research, training, networking and management and indirect costs are not covered under this budget category; they are covered under the budget category ‘institutional costs’ (Article 6.2.B). 1.2 These costs must be declared on the basis of the unit cost fixed by Commission Decision C(2013) 8194102 and set out in Annex 2 and 2a of the GA (currently − for the top-up allowance: EUR 2 000 per seconded staff member per month (‘person- month’)). In practice, the declaration of costs for MSCA grants is very simple and almost completely automatised: The beneficiaries must only indicate the number of implemented person-months (for staff members seconded under the action) and the costs are then automatically calculated by the IT system. 1.3 Moreover, the costs (in practice for MSCA: the person-months) must fulfil the following conditions for eligibility:  fulfil the general conditions for unit costs to be eligible (i.e. the declared number of person-months must be demonstrably linked to the implementation of the action (and its duration), identifiable and verifiable etc.; see Article 6.1)  be incurred for staff members that — at the date of secondment —:  are one of the following three:  an early stage researcher (i.e. not have a doctoral degree and be in the first four years (full-time equivalent research experience) of his/her research career);  an experienced researcher (i.e. have a doctoral degree or at least four years (full-time equivalent research experience) of research career), or  administrative, managerial or technical staff supporting research and innovation activities under the action (i.e. actively involved in the R&D activities of the organisation and not with a purely administrative role). Examples (not eligible administrative, managerial or technical staff): 1. Ms A, employed by beneficiary B as an accountant, is not eligible for secondment as her tasks are not directly related to support research and innovation activities. 2. Mr X, employed by beneficiary/partner organisation Y and carrying out secretarial tasks, is not eligible for secondment because he is not directly involved in research and innovation activities. Years of ‘research career’ are counted as full-time-equivalent research experience, from the date on which the researcher obtained the degree entitling him/her to embark 102 Available at http://ec.europa.eu/research/participants/data/ref/h2020/other/legal/unit_costs/unit- costs_msca_en.pdf For the latest information on the amount, see the Main Work Programme — MSCA in force at the time of the call. Budget flexibility — There is NO flexibility as regards the use of the unit cost for the seconded staff members (i.e. top-up allowance). They must be fully used for the staff member (to cover the travel, accommodation and subsistence costs of the staff member); they can NOT be used to pay other staff members or other types of costs (see Article 32). . H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-RISE 447 on a doctoral programme (either in the country in which it was obtained or in which s/he is recruited).  have already worked continuously for at least six months (full-time equivalent) on research and innovation activities at the premises of the sending beneficiary/partner organisation Examples: 1. Mr X is employed by beneficiary Y as from 1 January 2014; Mr X will not be eligible for a secondment from 1 March but would be eligible for secondment as from 1 July 2014. 2. Ms Y is employed 50% part-time by beneficiary X as from 1 January 2014. Ms Y will not be eligible for a secondment from 1 July, but would be eligible for secondment as from 1 January 2015. The type is NOT relevant — as long as it:  complies with national law  complies with internal practices and  confers to the sending beneficiary/partner organisation the necessary legal means in terms of controls and instructions to ensure the implementation of the activities in line with GA obligations. Example: A PhD-candidate can be seconded if s/he:  is at least an early stage researcher (ESR)  has been linked/actively engaged in the R&I activities of the sending beneficiary/partner organisation for at least six months (full-time equivalent) and  will be covered by an appropriate contract allowing him/her to work full-time on the R&I activities of the project during the secondment under the instructions of the sending beneficiary/partner organisation.  be incurred for secondments:  that last at least 1 month and no longer than 12 months Splitting into several periods is allowed. Example: If a secondment is split into two-week periods, the person-month may be claimed (since the one-month minimum is satisfied). However, if the staff member participates only in the first two-week period and the second one never takes place, the beneficiary may not claim any person- months for the secondment. Best practice: If the split is not already indicated in Annex 1, the coordinator should inform the Agency before the secondment. However, only splits within the same secondment (same staff, same sending beneficiary/partner organisation, same hosting beneficiary/partner organisation) can be added to reach the minimum duration of one month. Example: Two secondments of two weeks of the same staff member to different organisations are not eligible since the minimum duration of 1 month is not reached.  that are one of the following three:  secondments between beneficiaries in different EU Member States (or H2020 associated countries) and between different sectors, i.e. academic and non-academic Both elements must be fulfilled (i.e. location in different EU Member States or H2020 associated countries AND different sectors (academic and non-academic sector). ‘Academic sector’ means:  public or private higher education establishments awarding academic degrees H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-RISE 448  public or private non-profit research organisations whose primary mission is to pursue research or  international European interest organisations. ‘Non-academic sector’ means any socio-economic actor not included in the academic sector.  secondments from a beneficiary in an EU Member State (or H2020 associated country) to a partner organisation in a third country (see Article 8) OR  secondments from a partner organisation in a third country listed in General Annex A to the Main Work Programme (see Article 8) to a beneficiary in an EU Member State (or H2020 associated country). Examples: A and B exchange staff for 12 months within a RISE project. A sends 10 persons to B for one year (i.e. 120 person-months) and B sends the same number to A (also 120 person-months). Case 1: A is a beneficiary established in an EU Member State or H2020 associated country and B is a partner organisation established in a third country listed in General Annex A to the Main Work Programme. A may claim 240 person-months (120 for its own staff and 120 for the staff seconded by the partner organisation). Case 2: A is a beneficiary established in an EU Member State or H2020 associated country and B is a partner organisation established in a third country NOT listed in General Annex A to the Main Work Programme. A may claim only 120 person-months (for its own staff; the person-months of the staff seconded by the partner organisation are not eligible). Case 3: A and B are both beneficiaries established in an EU Member State or H2020 associated country. They may each claim 120 person-months (for their own staff). Partner organisations are not beneficiaries and therefore can NOT declare costs; their costs are covered by the unit costs paid to the beneficiary that hosted the seconded staff member from the partner organisation. During a secondment to a partner organisation, the beneficiaries remain solely and fully responsible for the implementation of the action in accordance with the GA (see Article 8). If a person is a staff member of two or more organisations which participate in a RISE project, s/he can NOT be seconded from both organisations. Example: A researcher is both professor at the university and CEO of its own SME and both organisations are involved in a RISE project. This researcher can only be seconded from one of the two organisations. By contrast, a staff member can be seconded from one participating organisation to two or more participating organisations in a RISE project (— as long as the total person-months per staff member do not exceed 12 (see also Article 19). 1.4 The costs are calculated (automatically by the IT system) as follows:  for the top-up allowance: Other conditions — Although NOT a cost eligibility condition for MSCA-RISE, but an ‘other obligation’ under Article 32:  the top-up allowance must also be fully used for the staff member (i.e. fully used to cover the travel, accommodation and subsistence costs of the staff member for whom it is claimed). . H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-RISE 449 amount per unit (see Annex 2) x number of months actually spent by the seconded staff members on the research and innovation activities (including travel) (‘number of implemented person-months’) For partial months of recruitment, a pro-rata unit cost of 1/30 will be reimbursed for each day (for ease of implementation, each month is considered to have 30 days). Example: A staff member is seconded from a beneficiary to a partner organisation from 12 March to 25 August. The calculation is five months (from 12 March to 11 August) plus 14/30 (for the 14 days from 12 to 25 August). In this case, insert ‘5.47’ as number of person-months. Beneficiaries may NOT declare more than 12 person-months per seconded staff member. (Person- months exceeding this number will be rejected by the Agency.) . H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-RISE 450 1. Institutional costs: Types of costs — Cost form — Conditions for eligibility — Cost calculation 1.1 What? This budget category covers:  research, training and networking costs, i.e.:  costs for training, transfer of knowledge and networking activities  costs for research expenses  management and indirect103 costs (i.e. the beneficiary’s additional costs in connection with the action). 1.2 The costs must be declared on the basis of the unit costs fixed by Commission Decision C(2013) 8194104 and set out in Annex 2 and 2a of the GA (currently:  for research, training and networking costs: EUR 1800 per researcher per month (‘person- month’)  for management and indirect costs: EUR 700 per person-month (For beneficiaries that already receive an EU/Euratom operating grant105, this amount will be halved, i.e. EUR 350)). In practice the declaration of institutional costs for MSCA grants is completely automatised because the IT system automatically calculates them on the basis of the number of person- months declared for the costs for seconded staff. 103 For the definition, see Article 6.2 of the H2020 General MGA: ‘indirect costs’ are costs that are not directly linked to the action implementation and therefore cannot be attributed directly to it. 104 Available at http://ec.europa.eu/research/participants/data/ref/h2020/other/legal/unit_costs/unit- costs_msca_en.pdf 105 For the definition, see Article 121(1)(b) of the Financial Regulation No 966/2012: ‘operating grant’ means direct financial contribution, by way of donation, from the budget in order to finance the functioning of a body which pursues an aim of general EU interest or has an objective forming part of and supporting EU policy. B. Institutional costs (B.1 Research, training and networking costs and B.2 Management and indirect costs) are eligible if the costs for the seconded staff members (see above) are eligible. Budget flexibility — Since MSCA-RISE uses unit costs, there is some flexibility as regards the use of the amounts received:  The unit cost for research, training and networking should be used for the research, training and networking activities foreseen in Annex 1, but unused amounts may be used for other action- related purposes, for instance to cover travel and subsistence costs of a staff member or to organise additional training activities.  The unit cost for management and indirect costs should be used for the management of the action, but unused amounts may also be used for other action-related purposes, for example, to cover travel and subsistence costs of a staff member. Re-distributions of management and indirect costs within the consortium are allowed, but should be done via an internal agreement and should roughly correspond to the actual division of (management) tasks within the consortium. Management and indirect costs should also be shared with partner organisations which incurred management or indirect costs for secondments (see Article 8). . H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-RISE 451 1.3 The eligibility of the institutional costs is directly linked to and conditional on the eligibility of the costs for seconded staff. Institutional costs (research training and networking costs, management and indirect costs) are eligible only if all the eligibility conditions for seconded staff are met. Person-months which are not eligible for the budget category ‘costs for seconded staff’ are also not eligible for the budget category ‘institutional costs’. Institutional costs can NOT be claimed separately (e.g. management and indirect costs cannot be claimed without top-up allowance). 1.4 The costs are calculated (automatically by the IT system) like the costs for seconded staff members:  for the research, training and networking costs: amount per unit (see Annex 2) x number of implemented person-months (declared for the costs for seconded staff)  for the management and indirect costs: amount per unit (see Annex 2) x number of implemented person-months (declared for the costs for seconded staff) 6.3 Ineligible costs ‘Ineligible costs’ are: (a) costs that do not comply with the conditions set out above (in Article 6.1), in particular costs incurred during suspension of the action implementation (see Article 49); (b) costs reimbursed under another EU or Euratom grant (including grants awarded by a Member State and financed by the EU or Euratom budget and grants awarded by bodies other than the Agency for the purpose of implementing the EU budget), in particular, management and indirect costs if the beneficiary is already receiving an operating grant financed by the EU or Euratom budget in the same period. (c) [OPTION for cost categories explicitly excluded in the work programme: [insert name of excluded cost category]]. 6.4 Consequences of declaration of ineligible costs Declared costs that are ineligible will be rejected (see Article 42). This may also lead to any of the other measures described in Chapter 6. Budget flexibility — Even if the consortium re-distributes parts of the institutional unit costs, the reporting is always based on the person-months implemented by the beneficiary. . H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-RISE 452 ARTICLE 8 — RESOURCES TO IMPLEMENT THE ACTION — THIRD PARTIES INVOLVED IN THE ACTION 1. Appropriate own resources — Use of third party resources — Third parties involved in the action The rules of the General MGA on third party involvement do not apply. Specific cases (third parties involved in the action): Partner organisations — MSCA-COFUND allow nevertheless for the involvement of partner organisations (i.e. organisations that are not beneficiaries, but that participate in the exchanges by seconding and hosting staff). Partner organisations are not explicitly mentioned as third parties in the GA, since no additional costs arise for the action. Their costs are covered by the unit costs paid to the beneficiaries. Authorisation to administer — Coordinators that are secondary or higher education establishments and public bodies may exceptionally delegate the administration of the payments to another legal entity (third party), in most cases a foundation. The third party must fulfil the following conditions:  it must have granted an ‘authorisation to administer’ by the coordinator AND  it must be affiliated, controlled or set up by the coordinator in order to handle its administrative affairs, including receiving and administering EU funds. In this case, the bank account number to be provided under Article 21.8 must be that of the entity and the payments will be transferred directly to it. The entity must therefore be registered in the Beneficiary Register and validated by the Commission/Agency. It will get its own PIC — although it is not a beneficiary. Since MSCA-RISE uses unit costs, no additional costs arise for the action. The costs of the entity are covered by the unit costs paid to the coordinator (see Article 6). ARTICLE 8 — RESOURCES TO IMPLEMENT THE ACTION – THIRD PARTIES INVOLVED IN THE ACTION Not applicable The beneficiaries remain fully responsible for the implementation of the action in accordance with the GA. Best practice: In order to be able to fulfil this obligation, beneficiaries should establish internal arrangements (e.g. partnership agreements) with partner organisations. Coordination and administration tasks are considered action tasks. Coordinators using a third party with authorisation to administer remain fully responsible for it under the GA. H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-RISE 453 ARTICLE 18 — KEEPING RECORDS — SUPPORTING DOCUMENTATION 1. Records and other supporting documentation For MSCA-RISE, simplified rules on record-keeping apply: Beneficiaries only need to keep appropriate and sufficient evidence to prove that the person-months declared are correct, i.e.:  proof that:  the eligibility conditions for the seconded staff members were complied with (e.g. CV showing the researcher’s seniority, copies of diplomas)  the secondment was eligible (e.g. agreement on the secondment; travel documents and/or access rights for the host organisation's premises to show the duration; lab books, registration documents, scientific articles, library records to show research and innovation activities) The nature of the records and supporting documents to be kept by the beneficiary must be adequate to show the duration of the secondments clearly and unequivocally  the obligations set out in Article 32 were complied with Thus for the obligation to fully use the unit cost for seconded staff members (to cover their travel, accommodation and subsistence costs): the beneficiaries must keep proof of the amounts paid (e.g. bank transfers to the staff member, travel tickets, hotel accommodation, etc.). This evidence must be verifiable, auditable and available. It must be correctly archived — for at least five years after the balance is paid (three years for grants up to EUR 60 000) or longer if:  national laws foresee longer document retention periods (e.g. for tax or social security purposes)  there are ongoing procedures (such as audits, investigations or litigation). (In this case the evidence must be kept until these procedures end). Specific cases (record-keeping): Documents for staff of the partner organisations — For secondments from partner organisations, it is the beneficiary that must keep the documents for the staff of the partner organisation. Costs that are not supported by appropriate and sufficient evidence may be rejected (and other measures described in Chapter 6 may be applied as well). Beneficiaries that throw supporting documents away during the retention period bear the full risk of rejection by the Agency. . ARTICLE 18 — KEEPING RECORDS — SUPPORTING DOCUMENTATION […] Art. 18.1.2 Records and other documentation to support the costs declared The beneficiaries must keep adequate records and other supporting documentation to prove the number of units declared. […] H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-RISE 454 ARTICLE 19 — SUBMISSION OF DELIVERABLES 1. Deliverable: Progress report What & When? The coordinator must — after each year except if a periodic report is due (i.e. normally after the first and third year of the action) — submit to the Agency a progress report, to inform the project officer about progress on the action. How? The report must be prepared and submitted directly in the Participant Portal (see Article 52). 2. Deliverable: Mid-term review meeting What & When? The coordinator must — before the deadline for the periodic report for RP 1 — organise a mid-term review meeting. 3. Deliverable: Researcher declaration What? The beneficiary must send to the Agency a document with information about each seconded staff member (‘researcher declaration’). It is important to give correct and complete information. (This information will be used to determine the eligibility of the person-months that are declared.) When? The researcher declaration must be submitted within 20 days from the start of the secondment. ARTICLE 19 — SUBMISSION OF DELIVERABLES 19.1 Obligation to submit deliverables The coordinator must: - submit a ‘progress report’ within 30 days after the end of each year, except when the periodic and final reports are due; - organise a ‘mid-term review meeting’ between the beneficiaries, the partner organisation(s) and the Agency before the deadline for the submission of the report for RP 1 (reporting period 1) and - submit any other deliverables identified in Annex 1, in accordance with the timing and conditions set out in it. The beneficiaries must: - submit a ‘researcher declaration’ within 20 days of the secondment of each seconded staff member. 19.2 Consequences of non-compliance If a beneficiary or the coordinator breaches any of its obligations under this Article, the Agency may apply any of the measures provided for in Chapter 6. H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-RISE 455 If a secondment is split in several stays of shorter duration, the researcher declaration must only be submitted once — at the beginning of the secondment — (and indicate each split). Example: Beneficiary A is sending Mr X to partner organisation B for one year, though split in two half-year periods. In this case, A has to submit the researcher declaration only at the beginning of the first period of secondment. No additional declaration is necessary for the second half. If a staff member is seconded to more than one beneficiary/partner organisation within the action duration, several researcher declarations must be submitted (an updated one within 20 days from the start date of each secondment). Example: Beneficiary A is sending Mr X to partner organisation B for half a year and to beneficiary C for half a year. In this case, the researcher declaration has to be submitted twice, each time within 20 days from the beginning of the secondment to a different beneficiary/partner organisation. How? The researcher declaration must be prepared and submitted directly in the Participant Portal (see Article 52). Specific case (deliverables): Researcher declaration for staff of the partner organisations — For secondments from partner organisations, it is the beneficiary that must submit the researcher declaration. H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-RISE 456 ARTICLE 25 — ACCESS RIGHTS TO BACKGROUND ARTICLE 31 — ACCESS RIGHTS TO RESULTS 1. Access rights for seconded staff members In view of the key role of the seconded staff members in MSCA-RISE, the MSCA-RISE MGA foresees special access rights for them (in addition to those of the General MGA; see Articles 25 and 31 H2020 General MGA): The beneficiaries must give the seconded staff members access to both background AND results necessary for their research training activities. ‘Background’ means any data, know-how or information — whatever its form or nature (tangible or intangible), including any rights such as intellectual property rights — that:  is held by beneficiaries before they accede to the GA  is needed to implement the action or exploit the results AND that  has been identified by the beneficiaries in accordance with Article 24. ‘Results’ means any (tangible or intangible) output of the action, such as data, knowledge or information — whatever its form or nature, whether it can be protected or not — that is generated in the action as well as any rights attached to it, including intellectual property rights. Beneficiaries must moreover ensure that the partner organisations give similar access. ARTICLE 25 — ACCESS RIGHTS TO BACKGROUND […] 25.5 Access rights for seconded staff members The beneficiaries must — on a royalty-free basis — give access to the seconded staff members to background necessary for their research and innovation activities under the action. […] ARTICLE 31 — ACCESS RIGHTS TO RESULTS […] 31.6 Access rights for seconded staff members The beneficiaries must — on a royalty-free basis — give access to the seconded staff members to results necessary for their research and innovation activities under the action. […] H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-RISE 457 ARTICLE 32 — RECRUITMENT AND WORKING CONDITIONS FOR SECONDED STAFF MEMBERS ARTICLE 32 — RECRUITMENT AND WORKING CONDITIONS FOR SECONDED STAFF MEMBERS 32.1 Obligations towards seconded staff members The beneficiaries must respect the following recruitment and working conditions for the seconded staff member under the action: (a) take all measures to implement the principles set out in the Commission Recommendation on the European Charter for Researchers and the Code of Conduct for the Recruitment of Researchers and ensure that the seconded staff members are aware of them; (b) ensure that the rights and obligations of the seconded staff members remain unchanged during the secondment; (c) ensure that seconded staff members are reintegrated after the secondment; (d) ensure that the seconded staff members enjoy at the place of the implementation at least the same standards and working conditions as those applicable to local persons holding a similar position; (e) ensure that the seconded staff members are covered by an appropriate medical insurance scheme; (f) ensure that the staff members are seconded full-time; (g) ensure that the seconded staff members have the relevant expertise for the action; (h) inform the seconded staff members about: - the description, conditions, location and the timetable for the implementation of the secondment under the action; - the rights and obligations of the beneficiary toward the seconded staff members under this Agreement; - the obligation of the seconded staff members to complete and submit — at the end of the secondment — the evaluation questionnaire and — two years later — the follow-up questionnaire provided by the Agency; - the arrangements related to the intellectual property rights between the beneficiary and the seconded staff members — during implementation of the secondment and afterwards; - the obligation of the seconded staff members to maintain confidentiality (see Article 36); - the obligation of the seconded staff members to ensure the visibility of EU funding in communications or publications and in applications for the protection of results (see Articles 27, 28, 29 and 38); (i) assist the seconded staff members in the administrative procedures related to their secondment; (j) use the costs of seconded staff members (see Article 6) to contribute to their subsistence and mobility. 32.2 Consequences of non-compliance If a beneficiary breaches any of its obligations under this Article, the grant may be reduced (see Article 43). Such breaches may also lead to any of the other measures described in Chapter 6. H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-RISE 458 1. Recruitment and working conditions — Rights for the seconded staff members In view of the key role of the seconded staff members in MSCA-RISE, the MSCA-RISE MGA foresees a series of obligations in order to guarantee best possible working conditions for them. Main obligations (towards the staff members):  Ensure that the rights and obligations remain unchanged during the secondment Beneficiaries and partner organisations must:  not penalise the staff members or reduce their rights due to the participation in the action and  in particular, since their normal remuneration is not covered by the grant (which is a top-up allowance to cover the travel, accommodation and subsistence costs of the secondment), continue to pay them as before, according to their internal practices. Changes in favour of the seconded staff member are obviously accepted.  Ensure that the seconded staff members are reintegrated (into the beneficiary or partner organisation) after the secondment, so as to allow for a transfer of knowledge and maximise the impact of the action (as regards knowledge-sharing and long-term collaboration)  Ensure that the seconded staff members enjoy at least the same standards and working conditions at the place of secondment as those applicable to persons holding a similar position there  Ensure that the seconded staff members are covered by an appropriate medical insurance scheme  Ensure that the staff members are seconded full-time  Comply with the arrangements on intellectual property rights. Assistance with intellectual property rights can be obtained via the IPR Helpdesk106.  Assist the seconded staff members in the administrative procedures related to their secondment (e.g. helping with visa procedures)  Inform the staff member about key elements of the grant Beneficiaries must inform seconded staff members of all details concerning the secondment and the research and innovation activities (such as description, conditions, location, and timetable for implementation).  Ensure that the seconded staff members have the relevant expertise to participate in the action The profiles of the staff to be seconded must be in line with the tasks and objectives described in Annex 1.  Ensure that the costs for seconded staff members are fully used for the benefit of the seconded staff members They can be:  paid directly to the seconded staff member in advance or via different instalments or  managed centrally by the beneficiary according to the specific needs of the secondment. 106 Available at https://www.iprhelpdesk.eu/. H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-RISE 459 2. Obligations on the seconded staff members Although they do not need to be explicitly reflected in their employment contract, some of the basic obligations under the MSCA-RISE MGA must also be respected by the seconded staff members. Main obligations (of the staff member):  Comply with the arrangements related to the intellectual property rights  Maintain confidentiality  Ensure the visibility of EU funding Seconded staff members must acknowledge funding under the MSCA in publications, communications or patent applications.  Complete and submit — at the end of the secondment — the evaluation questionnaire and — two years later — the follow-up questionnaire provided by the Agency. The beneficiaries remain fully responsible for the action implementation (in accordance with the GA) during the secondments. Best practice: It is strongly recommended that the beneficiaries establish internal arrangements (e.g. partnership agreements) with the partner organisations, to ensure that they fulfil their obligations (see Article 8). H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-RISE 460 ARTICLE 38 — PROMOTING THE ACTION — VISIBILITY OF EU FUNDING 1. Communication activities (by the beneficiaries) — Promoting the action — Mainstream media coverage For MSCA, the rules for promoting the action are in principle the same as in the General MGA (see Article 38.1.1 H2020 General MGA). However, the beneficiaries must inform the Agency not only before a communication activity expected to have a major media impact, but before any activity expected to have mainstream media coverage (i.e. coverage in any forms of media (e.g. print, TV, radio and electronic) addressing a non-specialist, non-scientific audience (e.g. local, regional or national news). (This ARTICLE 38 — PROMOTING THE ACTION — VISIBILITY OF EU FUNDING 38.1 Communication activities by the beneficiaries 38.1.1 Obligation to promote the action and its results The beneficiaries must promote the action and its results, by providing targeted information to multiple audiences (including the media and the public) in a strategic and effective manner. This does not change the dissemination obligations in Article 29, the confidentiality obligations in Article 36 or the security obligations in Article 37, all of which still apply. Before engaging in a communication activity expected to have a mainstream media coverage the beneficiaries must inform the Agency (see Article 52). 38.1.2 Information on EU funding — Obligation and right to use the EU emblem Unless the Agency requests or agrees otherwise or unless it is impossible, any communication activity related to the action (including in electronic form, via social media, etc.) and any infrastructure, equipment and major results funded by the grant must: (a) display the EU emblem and (b) include the following text: For communication activities: "This project has received funding from the European Union’s Horizon 2020 research and innovation programme under the Marie Skłodowska-Curie grant agreement No [number]." For infrastructure, equipment and major results: “This [infrastructure][equipment][insert type of result] is part of a project that has received funding from the European Union’s Horizon 2020 research and innovation programme under the Marie Skłodowska-Curie grant agreement No [number].” When displayed together with another logo, the EU emblem must have appropriate prominence. For the purposes of their obligations under this Article, the beneficiaries may use the EU emblem without first obtaining approval from the Agency. This does not, however, give them the right to exclusive use. Moreover, they may not appropriate the EU emblem or any similar trademark or logo, either by registration or by any other means. […] H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-RISE 461 allows the Agency to ensure maximum publicity and to disseminate the coverage further through social media, news updates, etc.). 2. Visibility of EU funding For MSCA, the same rules on visibility of EU funding apply as in the General MGA (see Articles 27.3, 28.2, 29.4 and 38.1.2 H2020 General MGA). In addition, the beneficiaries must however make specific reference to the MSCA grant. Thus, the clause acknowledging EU funding is slightly adapted. H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-COFUND 462 III.5 H2020 MGA MSCA-COFUND: Annotations ARTICLE 2 — ACTION TO BE IMPLEMENTED 1. Action: MSCA-COFUND What? MSCA-COFUND funds:  a regional, national or international doctoral or fellowship training programme for training, mobility and career development of researchers (— implemented by the beneficiary or a partner organisation). MSCA-COFUND cover doctoral programmes for early-stage researchers (DP) and fellowship programmes for experienced researchers (FP). MSCA-COFUND are mono-beneficiary actions. They are funded under Part I of the Horizon 2020 Framework Programme, ‘Marie Skłodowska- Curie actions’ (e.g. H2020-MSCA-COFUND-2014). For more information on MSCA-COFUND, see the Online Manual and the H2020 grants fact sheets on the Participant Portal. For more information on the conditions for participation and funding, see the Online Manual or the Main Work Programme — MSCA and the call and topics pages of the call. ARTICLE 2 — ACTION TO BE IMPLEMENTED The grant is awarded for the action entitled [insert title of the action] — [insert acronym] (‘action’), as described in Annex 1. H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-COFUND 463 ARTICLE 4 — ESTIMATED BUDGET AND BUDGET TRANSFERS 1. Budget categories The MSCA-COFUND MGA does not use the budget categories of the General MGA. Budget categories of the MSCA-COFUND MGA:  costs for researchers:  costs for researchers in programmes implemented by the beneficiary  costs of providing financial support to costs for researchers in programmes implemented by a partner organisation  management costs. 2. Budget transfers Given that MSCA-COFUND is a mono-beneficiary action, there is NO re-distribution of person- months between beneficiaries. Transfers between budget categories are formally NOT possible because all budget categories are all linked to the same person-months declared for the recruited researchers. (It is therefore technically not possible to move budgeted amounts from one budget category to another.) The budget categories are relevant for the estimated budget (Article 4 and Annex 2), forms of costs (Article 5), cost eligibility rules (Article 6.2) and the cost declarations (i.e. financial statements; Article 20 and Annex 4). . ARTICLE 4 — ESTIMATED BUDGET AND BUDGET TRANSFERS 4.1 Estimated budget The ‘estimated budget’ for the action is set out in Annex 2. It contains the estimated eligible costs and the forms of costs, broken down for the beneficiary, by budget category (see Articles 5, 6). 4.2 Budget transfers Not applicable Budget flexibility — Since MSCA-COFUND uses unit costs; there is however some flexibility as regards the use of the amounts received:  The unit cost for the recruited researchers (i.e. living allowance) must be fully used for the researchers (the unit cost covers only a part of the minimum remuneration that must be paid to them; see Articles 6 and 15).  The unit costs for management should be used for the management of the action, but unused amounts may also be used for other action-related purposes, for example, to increase the salary of the researchers. Management costs should be shared with partner organisations which incurred management or indirect costs for secondments (see Article 8). H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-COFUND 464 ARTICLE 5 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATES AND FORMS OF COSTS 1. Reimbursement rate How much? For MSCA-COFUND, the reimbursement rate is set at 50 % (see the Main Work Programme — MSCA). 2. Cost forms The MSCA MGAs do not use the cost forms of the General MGA, but the unit costs set out in Commission Decision C(2013) 8194107. For MSCA-COFUND, these are unit costs for:  costs for researchers: living allowance  management costs. These are fixed amounts that must be multiplied by the number of months the recruited researchers spent on research training activities (‘person-months’); they cannot be changed. The conditions for eligibility are set out in Article 6. 107 Available at http://ec.europa.eu/research/participants/data/ref/h2020/other/legal/unit_costs/unit- costs_msca_en.pdf ARTICLE 5 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATES AND FORMS OF COSTS […] 5.2 Form of grant, reimbursement rate and form of costs The grant reimburses 50 % of the action’s eligible costs (see Article 6) (‘reimbursement of eligible costs grant’) (see Annex 2). The estimated eligible costs of the action are EUR [insert amount (insert amount in words)]. Eligible costs (see Article 6) must be declared under the following form (‘form of costs’): (a) for costs for researchers in programmes implemented by the beneficiary (living allowance): on the basis of the amount(s) per unit set out in Annex 2 (‘unit costs’); (b) for costs of providing financial support to costs for researchers in programmes implemented by a partner organisation: on the basis of the amount(s) per unit set out in Annex 2 (unit costs) and (c) for management costs: on the basis of the amount per unit set out in Annex 2 (unit costs). H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-COFUND 465 1. Final grant amount For MSCA, the rules on the calculation of the final grant amount are in principle the same as in the General MGA (see Article 5.3 H2020 General MGA). However, since MSCA applies only unit costs, there is NO reduction due to the no-profit rule in the MSCA MGAs (Step 3 in the Article 5.3 General MGA). 5.3 Final grant amount — Calculation The ‘final grant amount’ depends on the actual extent to which the action is implemented in accordance with the Agreement’s terms and conditions. This amount is calculated by the Agency — when the payment of the balance is made (see Article 21.4) — in the following steps: Step 1 – Application of the reimbursement rate to the eligible costs Step 2 – Limit to the maximum grant amount Step 3 – Reduction due to improper implementation or breach of other obligations 5.3.1 Step 1 — Application of the reimbursement rates to the eligible costs The reimbursement rate (see Article 5.2) is applied to eligible costs (unit costs; see Article 6) declared by the beneficiaries and approved by the Agency (see Article 21). 5.3.2 Step 2 — Limit to the maximum grant amount If the amount obtained following Step 1 is higher than the maximum grant amount set out in Article 5.1, it will be limited to the latter. 5.3.3 Step 3 — Reduction due to improper implementation or breach of other obligations — Reduced grant amount — Calculation If the grant is reduced (see Article 43), the Agency will calculate the reduced grant amount by deducting the amount of the reduction (calculated in proportion to the improper implementation of the action or to the seriousness of the breach of obligations in accordance with Article 43.2) from the maximum grant amount set out in Article 5.1. The final grant amount will be the lower of the following two: - the amount obtained following Steps 1 and 2 or - the reduced grant amount following Step 3. H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-COFUND 466 ARTICLE 6 — ELIGIBLE AND INELIGIBLE COSTS 1. Eligible costs The grant can only reimburse eligible costs (i.e. costs that comply with the general and specific conditions set out in this Article) (‘reimbursement of eligible costs grant’). Article 6.1 refers to general eligibility conditions applicable per cost form (for MSCA: only unit costs; see Article 5). Article 6.2 refers to specific eligibility conditions applicable per budget category (see Article 4). 2. General conditions for unit costs to be eligible The general conditions for eligibility of unit costs are the same as in the General MGA (see Article 6.1 H2020 General MGA). ONLY eligible costs may be entered into the estimated budget for the action (see Article 4) or declared in the financial statements (see Article 20). Moreover, the burden on proof for eligibility is on the beneficiaries (and linked third parties). They must keep sufficient supporting documents (see Article 18) to show that the person-months they declare are eligible. Compliance with eligibility rules may be subject to a check or audit by the Commission/Agency. Any ineligible costs found will be rejected (see Article 42). . ARTICLE 6 — ELIGIBLE AND INELIGIBLE COSTS 6.1 General conditions for costs to be eligible Unit costs are eligible (‘eligible costs’), if: (a) they are calculated as follows: {amounts per unit set out in Annex 2 multiplied by the number of actual units}; (b) the number of actual units complies with the following conditions: - the units must be actually used or produced in the period set out in Article 3; - the units must be necessary for implementing the action or produced by it, and - the number of units must be identifiable and verifiable, in particular supported by records and documentation (see Article 18). H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-COFUND 467 1. Specific conditions for costs to be eligible Article 6.2 refers to specific eligibility conditions applicable per budget category. The MSCA MGAs have their own budget categories, with their own types of costs, conditions for eligibility and rules for cost calculation. For ease of reference, the annotations for Article 6.2 will summarise — for each budget category — the information necessary to establish the eligible costs, i.e.  types of costs covered by the budget category  cost form under which the costs must be declared (for MSCA: unit costs)  conditions for eligibility  how the costs must be calculated. 6.2 Specific conditions for costs to be eligible Costs are eligible, if they comply with the general conditions (see above) and the specific conditions set out below for each of the following two budget categories: H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-COFUND 468 1. Costs for researchers: Types of costs — Cost form — Conditions for eligibility — Cost calculation 1.1 What? This budget category covers the costs for the researchers (recruited either by the beneficiary or by the partner organisation implementing the programme) (by providing for:  a monthly living allowance to cover the employment or fixed-amount fellowship (with social security coverage, including compulsory deductions under national law, i.e. gross amount)). What not? Other costs are not covered. Thus, management costs are covered under the other budget category (‘management costs’; see Article 6.2.B). Other costs (such as mobility and family allowances, research, training and networking costs, indirect costs) are not eligible under the grant; they may be funded through other EU funding programmes. 1.2 The costs must be declared on the basis of the unit costs fixed by Commission Decision C(2013) 8194108 and set out in Annex 2 and 2a of the GA (currently: − for the living allowance:  for early-stage researchers (‘ESRs’) in doctoral programmes: EUR 3 710 per researcher per month (‘person-month’)  for experienced researchers (‘ERs’) in fellowship programmes: EUR 5 250 per person- month). 108 Available at http://ec.europa.eu/research/participants/data/ref/h2020/other/legal/unit_costs/unit- costs_msca_en.pdf A. Costs for researchers (‘living allowance’) A.1 Costs for researchers in programmes implemented by the beneficiary are eligible, if the number of units declared corresponds to the actual number of months spent by the researchers on the research training activities and if the conditions set out in Article 15.1.1 are met. A.2. Costs of providing financial support to costs for researchers in programmes implemented by a partner organisation are eligible, if the number of units declared corresponds to the actual number of months spent by the researchers on the research training activities and if the conditions set out in Article 15.1.1 are met. For more information on how to combine EU funding from different programmes (‘complementary EU funding’ or ‘synergies’), see the Online Manual. Budget flexibility — There is NO flexibility as regards the use of the unit cost for the recruited researchers (i.e. living allowance). It must be fully used for each researcher; it can NOT be used to pay other researchers or other types of costs (see Article 15). . Since MSCA-COFUND grants have a reimbursement rate of 50%, the unit cost that the beneficiary receives is EUR 1 855/2 625. For the latest information on the amounts, see the Main Work Programme — MSCA in force at the time of the call. H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-COFUND 469 In practice, the declaration of costs for MSCA grants is very simple and almost completely automatized: The beneficiary must only indicate the number of implemented person-months (for researchers recruited under the action) and the costs are then automatically calculated by the IT system. 1.3 Moreover, the costs (in practice for MSCA: the person-months) must fulfil the following conditions for eligibility:  fulfil the general conditions for unit costs to be eligible (i.e. the declared number of person-months must be demonstrably linked to the implementation of the action (including its duration), identifiable and verifiable etc.; see Article 6.1)  fulfil the additional cost eligibility conditions set out in Article 15.1.1. 1.4 The costs are calculated (automatically by the IT system) as follows:  for the living allowance: amount per unit (see Annex 2) x number of months actually spent by the recruited researchers on the research training activities (‘number of implemented person-months’) For partial months of recruitment, a pro-rata unit cost of 1/30 will be reimbursed for each day (for ease of implementation, each month is considered to have 30 days). Example: If the researcher spent 20 months and 15 days on the project, the calculation for the 15 days is: 15/30 = 0.5. In this case, insert ‘20.5’ as number of person-months. H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-COFUND 470 1. Management costs: Types of costs — Cost form — Conditions for eligibility — Cost calculation 1.1 What? This budget category covers only the:  management costs (i.e. direct costs of managing the action). What not? Other costs (such as research, training and networking costs AND indirect costs) are NOT eligible under the grant; they may be funded through OTHER EU funding programmes. 1.2 The costs must be declared on the basis of the unit cost fixed by Commission Decision C(2013) 8194109 and set out in Annex 2 and 2a of the GA (currently: − for management costs: EUR 650 per researcher per month (‘person-month’)). In practice, the declaration of management costs for MSCA-COFUND grants is completely automatized because the IT system automatically calculates them on the basis of the number of person-months declared for the researcher cost. 1.3 The eligibility of the management costs is directly linked to and conditional on the eligibility of the costs for researchers. Management costs are eligible only if all the eligibility conditions for the researchers are met. Person-months which are not eligible for the budget category ‘costs for researchers’ are also not eligible for the budget category ‘management costs’. Management costs can NOT be claimed separately (i.e. management costs cannot be claimed without living allowance). 1.4 The costs are calculated (automatically by the IT system) like the costs for researchers:  for the management costs: amount per unit (see Annex 2) x number of implemented person-months (declared for the researcher cost) 109 Available at http://ec.europa.eu/research/participants/data/ref/h2020/other/legal/unit_costs/unit- costs_msca_en.pdf B. Management costs are eligible if the costs of the researchers (living allowance; see above) are eligible. Budget flexibility — Since MSCA-COFUND uses unit costs, there is some flexibility as regards the use of the amounts received:  The unit cost for management should be used for the management of the action, but unused amounts may be used for other action-related purposes, for example, to increase the salary of the researchers. Management costs should be shared with partner organisations which incurred management or indirect costs for secondments or for the implementation of programmes (see Article 8). . Since MSCA-COFUND grants have a reimbursement rate of 50%, the unit cost that the beneficiary receives is EUR 325. For the latest information on the amount, see the Main Work Programme — MSCA in force at the time of the call. . H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-COFUND 471 6.3 Ineligible costs ‘Ineligible costs’ are: (a) costs that do not comply with the conditions set out above (in Article 6.1 and 6.2); (b) costs reimbursed under another EU or Euratom grant (including grants awarded by a Member State and financed by the EU or Euratom budget and grants awarded by bodies other than the Agency for the purpose of implementing the EU or Euratom budget). (c) [OPTION for cost categories explicitly excluded in the work programme: [insert name of excluded cost category]]. 6.4 Consequences of declaration of ineligible costs Declared costs that are ineligible will be rejected (see Article 42). This may also lead to any of the other measures described in Chapter 6. H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-COFUND 472 ARTICLE 8 — RESOURCES TO IMPLEMENT THE ACTION — THIRD PARTIES INVOLVED IN THE ACTION 1. Appropriate own resources — Use of third party resources — Third parties involved in the action The rules of the General MGA on third party involvement do not apply. Specific cases (third parties involved in the action): Partner organisations —MSCA-COFUND allows nevertheless for the involvement of partner organisations (i.e. organisations that are not beneficiaries, but that participate in the action either:  by implementing a doctoral or fellowship programme (i.e. recruiting the researchers)  by providing training and hosting researchers during a secondment) (see Article 15). Partner organisations are not explicitly mentioned as third parties in the GA, since no additional costs arise for the action. Their costs are covered by the unit costs paid to the beneficiary. Partner organisations that implement a doctoral or fellowship programme must be established in an EU Member State, H2020 associated country, or third country listed in General Annex A to the Main Work Programme. Other partner organisations can be established anywhere. Partner organisations that implement a doctoral or fellowship programme and are established in a third country must recruit researchers that are nationals or long-term residents of a EU Member State (or H2020 associated country) (see Article 15.1.1(b)). ARTICLE 8 — RESOURCES TO IMPLEMENT THE ACTION — THIRD PARTIES INVOLVED IN THE ACTION Not applicable The beneficiary remains fully responsible for the implementation of the action in accordance with the GA. Best practice: In order to be able to fulfil this obligation, the beneficiary should establish internal arrangements (e.g. partnership agreements) with partner organisations. H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-COFUND 473 ARTICLE 15 — FINANCIAL SUPPORT TO OR IMPLEMENTATION OF [DOCTORAL] [FELLOWSHIP] PROGRAMMES ARTICLE 15 — FINANCIAL SUPPORT TO OR IMPLEMENTATION OF [DOCTORAL] [FELLOWSHIP] PROGRAMMES 15.1 Rules for providing financial support to or implementation of [doctoral][fellowship] programmes 15.1.1 The beneficiary must implement [doctoral][fellowship] programmes or provide financial support to such programmes implemented by partner organisations, in accordance with the following conditions: (a) types of programmes: [OPTION for DPs: The programmes must concern research training activities for recruited researchers that lead to the award of a doctoral degree (‘doctoral programmes’);] [OPTION for FPs: The programmes must concern fellowships for research training activities for recruited researchers (‘fellowship programmes’). For fellowships where the main part of the research training activity does not take place in an EU Member State or associated country, the return phase to an EU Member State or associated country may not be more than 50 % of the total duration of the research training activity;] (b) categories of persons that may be supported by the programmes: [OPTION for DPs: The doctoral programmes must support researchers, who — at the time of recruitment —: - are ‘early-stage researchers’ (i.e. in the first four years of their research careers and not have a doctoral degree); - show transnational mobility by carrying out the research training activities in a country (or — in case of international European interest organisations — in this organisation) where they have not resided or carried out their main activity for more than 12 months in the 3 years immediately prior to the recruitment, unless otherwise specified in Annex 1 for existing programmes; - are nationals or long-term residents of an EU Member State or associated country, in case of research training activities carried out in a country other than an EU Member State or associated country; - fulfil any additional conditions set out in Annex 1.] [OPTION for FPs: The fellowship programmes must support researchers, who — at the time of recruitment —: - are ‘experienced researchers’ (i.e. in possession of a doctoral degree or have at least four years of research experience); - show transnational mobility by carrying out the research training activities in a country (or — in case of international European interest organisations — in this organisation) where they have not resided or carried out their main activity for more than 12 months in the 3 years immediately prior to the recruitment, unless otherwise specified in Annex 1 for existing programmes; - are nationals or long-term residents of an EU Member State or associated country, in case of research training activities carried out in a country other than an EU Member State or associated country; - fulfil any additional conditions set out in Annex 1. ] H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-COFUND 474 Researchers that are already permanently employed by the entity where the research training activities take place and that is recruiting them may not be supported. (c) procedure and criteria for selecting researchers in the programmes: [OPTION for DPs: Researchers must be selected following an open, transparent, merit-based, impartial and equitable selection procedure, as described in Annex 1. Vacancies must be internationally advertised and published (including on the web-sites requested by the Agency).] [OPTION for FP: Researchers must be selected following an open, transparent, merit-based, impartial and equitable selection procedure, based on international peer review, as described in Annex 1. Selection committees must bring together diverse expertise, have an adequate gender balance and include members from other countries and with relevant experience to assess the candidates. Fellowships must be granted via regular calls that are internationally advertised and published (including on the web-sites requested by the Agency) and have fixed deadlines or regular cut-off dates. There must be no more than 4 deadlines or cut-off dates per year.] (d) conditions for the recruitment of researchers under the programmes: - researchers must be recruited under an employment contract (or other direct contract with equivalent benefits, including social security coverage) or — if not otherwise possible under national law — under a fixed-amount-fellowship agreement with minimum social security coverage; - researchers must be recruited for at least 3 months; - [OPTION for DPs: for researchers recruited under an employment contract (or other direct contract with equivalent benefits, including social security): the total remuneration costs (salaries, social security contributions, taxes and other costs included in the remuneration) for each researcher per month are equal to or higher than EUR 2 597. For researchers recruited under a fixed-amount-fellowship agreement: the total costs of each fixed-amount fellowship per month are equal to or higher than EUR 1 298.50;] - [OPTION for FPs: for researchers recruited under an employment contract (or other direct contract with equivalent benefits, including social security): the total remuneration costs (salaries, social security contributions, taxes and other costs included in the remuneration) for each researcher per month are equal to or higher than EUR 3 675. For researchers recruited under a fixed-amount-fellowship agreement: the total costs of each fixed-amount fellowship per month are equal to or higher than EUR 1 837.50.] 15.1.2 In addition, the beneficiary must: - take all measures to implement the principles set out in the Commission Recommendation on the European Charter for Researchers and the Code of Conduct for the Recruitment of Researchers7 and ensure that the researchers are aware of them; - ensure that researchers enjoy — wherever the research training activities take place — the same standards of safety and occupational health as those of local researchers holding a similar position; - ensure that researchers are provided with the means to carry out the research training activities (including the infrastructure, equipment and products); - ensure that researchers receive appropriate assistance in all administrative procedures before national authorities; H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-COFUND 475 1. Providing financial support — Implementing doctoral/fellowship programmes MSCA-COFUND provides support both for programmes implemented by the beneficiary itself or programmes of partner organisations which the beneficiary funds by providing financial support. - ensure that researchers are employed full-time, unless duly justified for reasons associated with personal or family reasons; - ensure that researchers work exclusively on the research training activities; - ensure that the research training activities (including activities raising ethical issues and research on human embryos or human embryonic stem cell) comply with the ethical principles set out in Article 34; - ensure that the researchers are informed that they are ‘Marie Skłodowska-Curie fellows’; - ensure that researchers are paid in accordance with their contract (employment contract, other direct contract or fixed-amount fellowship agreement); - ensure that the contract (employment contract, other direct contract or fixed-amount fellowship agreement) complies with the provisions of this Agreement and specifies the research training activities; - ensure that the contract (employment contract, other direct contract or fixed-amount fellowship agreement) specifies arrangements relating to confidentiality and intellectual property rights (in particular to access to background, use of foreground, promoting the action) — during the research training activities and afterwards; - inform the researchers about their obligation to complete and submit — at the end of the research training activities — the evaluation questionnaire and — two years later — follow-up questionnaire provided by the Agency; - in case of third parties implementing the programmes: ensure that the Commission and the Agency, the European Court of Auditors (ECA) and the European Anti-Fraud Office (OLAF) can exercise their rights under Article 22 and 23 also towards those third parties; [OPTIONS for DPs: - ensure gender balance in the recruited researchers; - appoint a supervisor with adequate experience to provide the researchers with academic support and a career plan.] 15.2 Consequences of non-compliance If a beneficiary breaches its obligations under Article 15.1.1, the costs of the researchers will be ineligible (see Article 6) and will be rejected (see Article 42). If the beneficiary breaches its obligations under Article 15.1.2, the grant may be reduced (see Article 43). Such breaches may also lead to the application of any of the other measures provided for in Chapter 6. 7 Commission Recommendation No 251/2005/EC of 11 March 2005 on the European Charter for Researchers and on a Code of Conduct for the Recruitment of Researchers (OJ L 75, 22.3.2005, p. 67). H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-COFUND 476 ‘Providing financial support’ means that the beneficiary passes on the EU support it receives via the MSCA-COFUND grant to the partner organisations that implement doctoral/fellowship programmes (also called ‘cascade funding’). 2. Additional eligibility condition: Types of programmes — Categories of persons The beneficiary/partner organisation must implement the following types of research training programmes supporting transnational mobility:  doctoral programmes (DP), i.e. programmes with research training activities for recruited early-stage researchers that lead to the award of a doctoral degree The degree does not necessarily need to be awarded within the action duration. However, if requested by the Agency, the beneficiary must be able to provide proof that the researcher actually received (or failed the examination for) the doctoral degree. OR  fellowship programmes (FP), i.e. programmes with fellowships for recruited experienced researchers. The researchers must — at the date of recruitment —:  be one of the following two:  early-stage researchers (‘ESRs’; i.e. not have a doctoral degree and be in the first four years (full-time-equivalent research experience) of their research career) or  experienced researchers (‘ERs’; i.e. have a doctoral degree or have at least four years (full-time-equivalent research experience) of research career). Years of ‘research career’ are counted as full-time-equivalent research experience, from the date when the researcher obtained a degree entitling him/her to embark on a doctoral programme (either in the country in which it was obtained or in which s/he is recruited) — even if the doctorate was never started or envisaged.  comply with the mobility rule, i.e. not have resided or carried out their main activity (work, studies, etc.) in the country of the beneficiary/partner organisation for more than 12 months in the three years immediately prior to the recruitment date (unless Annex 1 to the GA specifies otherwise for already existing programmes or the beneficiary/partner organisation is an ‘international European interest organisation’110 for whom the mobility rule is limited to time spent with them). Researchers are NOT eligible if they are already permanently employed by the entity where the research training activities take place. For refugees under the Geneva Convention111, the refugee procedure (i.e. before refugee status is conferred) will not be counted as ‘period of residence/activity in the country of the beneficiary’. 110 For the definition, see Article 2.1(12) of the Rules for Participation: ‘international European interest organisation’ means an international organisation, the majority of whose members are Member States or associated countries, and whose principal objective is to promote scientific and technological cooperation in Europe. 111 1951 Refugee Convention and the 1967 Protocol. Article 15 contains both additional cost eligibility conditions (in Article 15.1.1) and ‘other obligations’ (in Article 15.1.2). H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-COFUND 477  if the programme is implemented by a partner organisation established in a third country or if a secondment to such an organisation constitutes the main part of the research training activities: be nationals or long-term residents of a EU Member State (or H2020 associated country). ‘Long-term resident’ normally means full-time research activity in a EU Member State (or associated country) for five or more consecutive years. (The Agency may however, exceptionally accept a different definition, if it is linked to long-term residence and justified in the proposal). ‘Full-time research activity’ is measured from the date when the researcher obtained a degree entitling him/her to embark on a doctoral programme (either in the country in which it was obtained or in which s/he is recruited) — even if the doctorate was never started or envisaged. Short secondments are possible also for researchers that are not nationals or long-term residents. 3. Additional eligibility condition: Selection procedure The beneficiary/partner organisation must select researchers in line with the following criteria:  open  transparent  merit-based  impartial  equitable  described in Annex 1 and  for fellowship programmes: based on international peer review. For doctoral programmes: the beneficiary/partner organisation must publish vacancies as widely as possible  at international level and  on web-sites requested by the Agency (e.g. on EURAXESS Jobs112). For fellowship programmes: the beneficiary/partner organisation must publish calls for proposals (with a maximum of 4 fixed deadlines or regular cut-off dates per year) as widely as possible:  at international level and  on web-sites requested by the Agency (e.g. on EURAXESS Jobs). 4. Additional eligibility condition: Recruitment and working conditions The beneficiary/partner organisation must recruit the researchers under an employment contract/equivalent direct contract (i.e. other direct contract with equivalent benefits and social security coverage), including:  sickness, parental, unemployment and invalidity benefits 112 Available at http://ec.europa.eu/euraxess/. H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-COFUND 478  pension rights and  benefits for accidents at work and occupational diseases. If national law prevents them from recruiting researchers under an employment contract/equivalent direct contract, beneficiaries/partner organisations may offer a ‘fixed- amount fellowship agreement’ with minimum social security coverage, including:  sickness, parental and invalidity benefits and  benefits for accidents at work and occupational diseases. In this case, the researcher unit costs will be reduced by 50%. The researchers must be recruited for at least 3 months. Researchers recruited under an employment contract/equivalent direct contract must receive a minimum monthly remuneration (including salary, social security contributions, taxes and other costs included in the remuneration) of:  for early-stage researchers (doctoral programmes); EUR 2 597  for experienced researchers (fellowship programmes): EUR 3 675. These amounts are halved for fixed-amount fellowship agreements (i.e. for early stage researchers EUR 1 298,50; for experienced researchers EUR 1 837,50). A beneficiary with accounting in a currency other than the euro must ensure that — by the end of the doctoral programme/fellowship — the average monthly remuneration (over the duration of the doctoral programme/fellowship) respects the minimum remuneration. Amounts must be converted into euro as follows:  if a daily rate is published in the C series of the Official Journal of the European Union for the currency in question: costs must be converted into euro at the average of the daily exchange rates published over the doctoral programme/fellowship duration, as reported on the ECB website113  if no daily rate is published: amounts must be converted at the average of the monthly accounting rates over the fellowship period, using the currency converter on the Commission’s website114. The Agency will check if the living allowance was used fully for the benefit of the researchers. Any underpayments, if not corrected, may lead to a rejection of costs (for that researcher). 5. ‘Other obligations’ In addition to the additional cost eligibility conditions in Article 15.1.1, the beneficiary/partner organisation must comply with the following ‘other obligations’: 113 Available at http://www.ecb.europa.eu/stats/exchange/eurofxref/html/index.en.html 114 Available at http://ec.europa.eu/budget/contracts_grants/info_contracts/inforeuro/inforeuro_en.cfm Since the MSCA-COFUND grant reimburses 50% of the unit cost for the researchers (i.e. EUR 1 855/EUR 2 625), this means that the grant covers only a part of the minimum remuneration. The beneficiary must bear (‘co-fund’) the difference of EUR 742/1050 per researcher. It also means that there can be NO budget flexibility. The researcher unit cost must have been fully incurred for the benefit of the researcher (i.e. fully paid to the individual for whom they are claimed). There can be no amounts left (which the beneficiary could use for other action-related activities). . H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-COFUND 479  the researchers must:  be employed full-time This also means that a researcher can NOT hold two MSCA grants at the same time.  work exclusively on the research training activities carried out under the action (i.e. may not combine several activities) Complementary skills training (e.g. a teaching activity as part of the research training) are not incompatible, but must not jeopardise the implementation of the research training activities.  complete and submit — at the end of the training — the evaluation questionnaire and — two years later — follow-up questionnaire provided by the Agency  the contract must set out arrangements relating to confidentiality and intellectual property rights. Assistance with intellectual property rights can be obtained via the IPR Helpdesk115.  for doctoral programmes: the beneficiary/partner organisation must  ensure gender balance regarding the recruited researchers  appoint a supervisor with adequate experience to provide the researchers with academic support and a career plan. 115 Available at https://www.iprhelpdesk.eu/. H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-COFUND 480 ARTICLE 18 — KEEPING RECORDS — SUPPORTING DOCUMENTATION 1. Records and other supporting documentation For MSCA-COFUND, simplified rules on record-keeping apply: The beneficiary only needs to keep appropriate and sufficient evidence to prove that the person-months declared are correct, i.e.:  the employment contracts (or other suitable documents, e.g. fixed-fellowship agreements)  proof that:  the eligibility conditions for the researchers were complied with (e.g. CV showing the researchers’ seniority, copies of diplomas)  the researchers actually worked on the project (e.g. lab books, scientific articles, library records)  the obligations set out in Article 15 were complied with  the minimum remuneration was paid to the researchers. This evidence must be verifiable, auditable and available. It must be correctly archived — for at least five years after the balance is paid (three years for grants up to EUR 60 000) or longer if:  national laws foresee longer document retention periods (e.g. for tax or social security purposes)  there are ongoing procedures (such as audits, investigations or litigation). (In this case the evidence must be kept until these procedures end.) Specific case (record-keeping): Documents for programmes implemented by partner organisations —For programmes implemented by partner organisations, it is the beneficiary that must keep the documents also for the partner organisations. Costs that are not supported by appropriate and sufficient evidence may be rejected (and other measures described in Chapter 6 may be applied as well). Beneficiaries that throw supporting documents away during the retention period bear the full risk of rejection by the Agency. . ARTICLE 18 — KEEPING RECORDS — SUPPORTING DOCUMENTATION […] 18.1.2 Records and other documentation to support the costs declared The beneficiary must keep adequate records and other supporting documentation to prove the number of units declared and the total remuneration or fixed-amount fellowship costs of the recruited researchers. […] H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-COFUND 481 ARTICLE 19 — SUBMISSION OF DELIVERABLES 1. Deliverable: Researcher declaration What and When? The beneficiary must send to the Agency a document with information about each recruited researcher (‘researcher declaration’) — within 20 days of the start of the research training activities (of the researcher). It is important to give correct and complete information since the data will be automatically transmitted to Annex 4 (financial statement), for calculating the living allowance units. How? The researcher declaration must be prepared and submitted directly in the Participant Portal (see Article 52). 2. No deliverable: Mid-term review meeting For MSCA-COFUND, the Agency will organise a mid-term review meeting (to monitor implementation of the action in the light of the schedule in Annex 1). The mid-term review is therefore not a deliverable, as in other types of MSCA. ARTICLE 19 — SUBMISSION OF DELIVERABLES 19.1 Obligation to submit deliverables The beneficiary must submit: - a ‘researcher declaration’ within 20 days of the start of the research training activities, for each researcher; - any other deliverables identified in Annex 1, in accordance with the timing and conditions set out in it. 19.2 Consequences of non-compliance If the beneficiary breaches any of its obligations under this Article, the Agency may apply any of the measures described in Chapter 6. H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-COFUND 482 ARTICLE 38 — PROMOTING THE ACTION — VISIBILITY OF EU FUNDING 1. Communication activities (by the beneficiaries) — Promoting the action — Mainstream media coverage For MSCA, the rules for promoting the action are in principle the same as in the General MGA (see Article 38.1.1 H2020 General MGA). However, the beneficiary must inform the Agency not only before a communication activity expected to have a major media impact, but before any activity expected to have mainstream media coverage (i.e. coverage in any forms of media (e.g. print, TV, radio and electronic) ARTICLE 38 — PROMOTING THE ACTION — VISIBILITY OF EU FUNDING 38.1 Communication activities by the beneficiaries 38.1.1 Obligation to promote the action and its results The beneficiary must promote the action and its results, by providing targeted information to multiple audiences (including the media and the public) in a strategic and effective manner. This does not change the dissemination obligations in Article 29, the confidentiality obligations in Article 36 or the security obligations in Article 37, all of which still apply. Before engaging in a communication activity expected to have a mainstream media coverage the beneficiaries must inform the Agency (see Article 52). 38.1.2 Information on EU funding — Obligation and right to use the EU emblem Unless the Agency requests or agrees otherwise or unless it is impossible, any communication activity related to the action (including in electronic form, via social media, etc.) and any infrastructure, equipment and major results funded by the grant must: (a) display the EU emblem and (b) include the following text: For communication activities: "This project has received funding from the European Union’s Horizon 2020 research and innovation programme under the Marie Skłodowska-Curie grant agreement No [number]." For infrastructure, equipment and major results: “This [infrastructure][equipment][insert type of result] is part of a project that has received funding from the European Union’s Horizon 2020 research and innovation programme under the Marie Skłodowska-Curie grant agreement No [number].” When displayed together with another logo, the EU emblem must have appropriate prominence. For the purposes of their obligations under this Article, the beneficiaries may use the EU emblem without first obtaining approval from the Agency. This does not, however, give them the right to exclusive use. Moreover, they may not appropriate the EU emblem or any similar trademark or logo, either by registration or by any other means. […] H2020 AGA — Annotated Grant Agreement: V2.1 – 30 October 2015 MGA MSCA-COFUND 483 addressing a non-specialist, non-scientific audience (e.g. local, regional or national news). (This allows the Agency to ensure maximum publicity and to disseminate the coverage further through social media, news updates, etc.). 2. Visibility of EU funding For MSCA, the same rules on visibility of EU funding apply as in the General MGA (see Articles 27.3, 28.2, 29.4 and 38.1.2 H2020 General MGA). In addition, the beneficiary must however make specific reference to the MSCA grant. Thus, the clause acknowledging EU funding is slightly adapted. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 SME Instrument 484 IV. SME Instrument MGAs IV.1 Background information and approach The SME Instrument Model Grant Agreements are used for SME Instrument actions only, i.e.:  SME Ph1  SME Ph2. The SME Instrument MGAs follow the General MGA for numbering and content, except for: The annotations will concentrate on differences in substance and interpretation that require explanation. Parts that do not apply or differ only in presentation (e.g. Articles 11, 12, 14, 15, 16, 23a - 33, 37, 39 H2020 MGA SME Ph1, Annexes) will not be shown. By contrast, provisions that do not deviate from the General MGA, but that require clarification or a specific explanation or interpretation for SME Instrument actions are added: for SME Ph1:  Article 2 (SME Ph1 actions)  Article 8 (SME Ph1 rules on third party involvement) For SME Ph2:  Article 2 (SME Ph2 actions)  Article 4.1 (SME Ph2 budget categories) The H2020 MGA SME Ph 2 deviates from the General MGA as follows:  Article 5.2 (SME Ph2 specific provisions on reimbursement rate)  Article 13 (SME Ph2 specific provisions on subcontracting)  Article 26.3 (SME Ph2 ownership of results, rights of third parties) The H2020 MGA SME Ph1 deviates from the General MGA as follows:  Article 4 (estimated budget of the action)  Article 5 (maximum grant amount, form of grant and reimbursement rate)  Article 6 (lump sum specific form of costs)  Article 7 (specific provision for SME Ph1)  Article 8, 12, 14, 15, 16, 23a-33, 37, 39 (not applicable)  Article 10 (SME Ph1 specific provision for purchase)  Article 13 (SME Ph1 specific provision subcontracting)  Article 18 (SME Ph1 specific provision for record-keeping)  Article 20 (SME Ph1 specific reporting provisions)  Article 21 (SME Ph1 specific payment provisions)  Article 36 (SME Ph1 specific provision on confidentiality)  Article 38 (SME Ph1 specific provision on promoting the action)  Article 42 (SME Ph1 specific provision for lump-sum)  Article 50 (SME Ph1 specific provision for lump-sum)  Annex 2 Model for the estimated budget for the action  Annex 4 Model for the financial statement H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 SME Instrument 485  Article 6 (SME Ph2 eligible and ineligible costs)  Article 8 (SME Ph2 rules on third party involvement)  Article 20 (SME Ph2 reporting) The annotations (for both Ph1 and Ph2) are based on the mono-beneficiary version, since it is the most common for SME Instrument actions. They normally also apply to multi-beneficiary grant agreements. Where there are significant differences (i.e. Articles 21, 41, 44 and 50), the multi- beneficiary version of the Article is shown. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 1 486 IV.2 H2020 MGA SME Ph1: Annotations ARTICLE 2 — ACTION TO BE IMPLEMENTED 1. SME Instrument Ph1 actions What? SME Instrument Ph1 funds:  the feasibility study for an innovation idea (i.e. a ‘proof of concept’ or ‘business plan’ for new, altered or improved product, process or service). The innovation idea must have commercial potential and considerable novelty for its sector (i.e. for technological innovation ideas: ‘technology readiness level’ of 6 or above; see General Annex G to the Main Work Programme). The feasibility study of Phase 1 should cover all topics that are necessary to assess quality and potential of the innovation idea (e.g. risk assessment, market study, user involvement, intellectual property management, innovation strategy development, partner search, feasibility of concept etc.). The implementation in Phase 2 must then focus on innovation activities (e.g. demonstration, testing, prototyping, piloting, scaling-up, miniaturisation, design, market replication) but may also include some research. If provided for in the work programme/call, an SME Instrument Ph2 action may exceptionally concern pre-dominantly research activities. In this case, it will be funded with a GA based on the General MGA (instead of the SME Instrument Ph2 MGA). SME actions are normally mono-beneficiary actions, but can also be multi-beneficiary. SME actions are funded under Part II of the Horizon 2020 Framework Programme: ‘Innovation in SMEs’ (e.g. H2020-SMEINST-1-2014). For more information on SME Instrument Ph1 actions, see the Online Manual and the H2020 grants fact sheets on the Participant Portal. For more information on the conditions for participation and funding, see the Online Manual or the General Annexes to the Main Work Programme and the call and topics pages of the call. ARTICLE 2 — ACTION TO BE IMPLEMENTED The grant is awarded for the action entitled [insert title of the action] — [insert acronym] (‘action’), as described in Annex 1. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 1 487 ARTICLE 4 — ESTIMATED BUDGET AND BUDGET TRANSFERS 1. Budget category The SME Ph 1 MGA does not use the budget categories of the General MGA. Since these grants consist in a single lump sum, there is only one budget category. Budget category of the SME Ph1 MGA:  costs for the feasibility study (direct and indirect costs) ARTICLE 4 — ESTIMATED BUDGET AND BUDGET TRANSFERS 4.1 Estimated budget The ‘estimated budget’ for the action is set out in Annex 2. It contains the budget category, the estimated eligible costs and the form of costs (see Articles 5 and 6). 4.2 Budget transfers Not applicable The budget categories are relevant for the estimated budget (Article 4 and Annex 2), forms of costs (Article 5), cost eligibility rules (Article 6.2) and the cost declarations (i.e. financial statements; Article 20 and Annex 4). . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 1 488 ARTICLE 5 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATE AND FORM OF COSTS 1. Maximum grant amount — Reimbursement rate — Cost forms How much & which form? The SME Ph 1 MGA does not use the cost forms of the General MGA, but only the lump sum set out in Commission Decision C(2013) 8198116. The lump sum has been set at EUR 71 429, to give a round amount of EUR 50 000 when the reimbursement rate of 70 % is applied. It is one amount (for the entire consortium). The conditions for eligibility are set out in Article 6. If the action is correctly implemented, the beneficiaries are entitled to receive this fixed amount of EU funding (lump sum). 116 Commission Decision C(2013) 8198 of 10 December 2013 authorising the reimbursement on the basis of a lump sum for SME instrument phase 1 actions under the Horizon 2020 Framework Programme. Available at http://ec.europa.eu/research/participants/data/ref/h2020/other/legal/unit_costs/unit-costs_sme-ph1_en.pdf ARTICLE 5 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATE AND FORM OF COSTS 5.1 Maximum grant amount The maximum grant amount is EUR 50 000 (fifty thousand euros). 5.2 Form of grant, reimbursement rate and form of costs The grant reimburses 70 % of the action’s eligible costs (see Article 6) (‘reimbursement of eligible costs grant’) (see Annex 2). The estimated eligible costs of the action are EUR 71 429 (seventy one thousand four hundred and twenty nine). Eligible costs (see Article 6) for the costs for the feasibility study must be declared as the lump sum set out in Annex 2 (i.e. under the form of ‘lump sum costs’). The lump sum is deemed to cover ALL (direct and indirect) costs that are incurred for the feasibility study. NO other costs will be reimbursed. . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 1 489 1. Final grant amount For SME Ph1 grants, the rules on the calculation of the final grant amount are in principle the same as in the General MGA (see Article 5.3 H2020 General MGA). However, since they are lump sum grants (and the amount declared is pre-filled by the system), there is NO:  limit to the maximum grant amount or  reduction due to the no-profit rule. 5.3 Final grant amount — Calculation The final grant amount depends on the proper implementation of the action in accordance with the Agreement’s terms and conditions. This amount is calculated by the Agency — when the payment of the balance is made (see Article 21) — in the following steps: Step 1 — Application of the reimbursement rate Step 2 — Reduction due to breach of obligations 5.3.1 Step 1 — Application of the reimbursement rates to the eligible costs The reimbursement rate (see Article 5.2) is applied to the eligible costs (lump sum costs; see Article 6) declared by the beneficiary and approved by the Agency (see Article 21). 5.3.2 Step 2 — Reduction due to breach of obligations other than improper implementation — Reduced maximum grant amount — Calculation If the grant is reduced (see Article 43), the Agency will calculate the reduced maximum grant amount by deducting the amount of the reduction (calculated in proportion to the seriousness of the breach of obligations in accordance with Article 43.2) from the maximum grant amount set out in Article 5.1. In this case, the final grant amount will be the lower of the following two: - the amount obtained in Step 1 or - the amount obtained in Step 2. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 1 490 1. Revised final grant amount For SME Ph1 grants, the rules on the calculation of the revised final grant amount are in principle the same as in the General MGA (see Article 5.3 H2020 General MGA). However, since they are lump sum grants, improper implementation of the action leads to ineligibility of the costs (NOT to the reduction of the grant). Therefore, the grant reduction mentioned in this provision does not relate to improper implementation of the action (but only to breaches of ‘other obligations’; see Article 43). 5.4 Revised final grant amount — Calculation If — after the payment of the balance (in particular, after checks, reviews, audits or investigations; see Article 22) — the Agency rejects costs (see Article 42) or reduces the grant (see Article 43), it will calculate the ‘revised final grant amount’. This amount is calculated by the Agency on the basis of the findings, as follows: - in case of rejection of costs: by applying the reimbursement rate to the revised eligible costs approved by the Agency; - in case of reduction of the grant: in proportion to the seriousness of its breach of obligations (see Article 43.2). In case of rejection of costs and reduction of the grant, the revised final grant amount will be the lower of the two amounts above. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 1 491 ARTICLE 6 — ELIGIBLE AND INELIGIBLE COSTS 1. Eligible costs The SME Ph1 MGA has its own budget category, with its own types of costs, conditions for eligibility and rules for cost calculation. 2. Costs for the feasibility study: Types of costs — Cost form — Conditions for eligibility — Cost calculation 2.1 What? The budget category ‘costs for the feasibility study’ covers the (direct and indirect costs) for the feasibility study for the innovation idea (see Article 2). 2.2 These costs must be declared as the amount fixed by Commission Decision C(2013) 8198117 and indicated in Annex 2 of the GA (currently EUR 71 429 per action). In practice, the declaration of costs for SME Ph1 grants is completely automatized. The coordinator only needs to sign and submit the financial statement (pre-filled by the IT system). 2.3 They must fulfil the following eligibility conditions:  the action tasks must have been carried out as described in Annex 1. 2.4 NO cost calculation is necessary (since it is a fixed global amount). By signing the financial statement (for multi-beneficiary actions: one common financial statement for the consortium; see Article 20), the beneficiaries automatically declare the amount of EUR 71 429 as the total eligible costs of the action (the amount is fixed and pre- filled by the IT system). ARTICLE 6 — ELIGIBLE AND INELIGIBLE COSTS 6.1 Eligible costs Costs for the budget category: A. Costs for the feasibility study (direct and indirect costs) are eligible (‘eligible costs’), if they correspond to the lump sum set out in Annex 2 and if the corresponding tasks or parts of the action have been properly implemented in accordance with Annex 1. Since SME Ph1 grants have a reimbursement rate of 70%, the lump sum that the beneficiaries receive is EUR 50 000. . The lump sum is deemed to cover ALL (direct and indirect) costs that are incurred for the feasibility study. NO other costs will be reimbursed. . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 1 492 117 Available at http://ec.europa.eu/research/participants/data/ref/h2020/other/legal/unit_costs/unit-costs_sme- ph1_en.pdf 6.2 Ineligible costs ‘Ineligible costs’ are: (a) costs that do not comply with the conditions set out above (see Article 6.1) and (b) costs declared under another EU or Euratom grant (including grants awarded by a Member State and financed by the EU or Euratom budget and grants awarded by bodies other than the Agency for the purpose of implementing the EU and Euratom budget. [(c) OPTION for cost categories explicitly excluded in the work programme: [insert name of excluded cost category]]. 6.3 Consequences of declaration of ineligible costs Declared costs that are ineligible will be rejected (see Article 42). This may also lead to any of the other measures described in Chapter 6. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 1 493 ARTICLE 7 — GENERAL OBLIGATION TO PROPERLY IMPLEMENT THE ACTION 1. Consequences of improper implementation Since the SME Ph1 grant consists in a lump sum, ‘improper implementation of the action not in accordance with Annex 1’ does NOT lead to a reduction of the grant, but to the ineligibility of the costs (see Article 6.1). By contrast, if ‘other obligations’ have been breached (e.g. other provisions of the GA or provisions of EU, international and national law are not complied with), the grant may be reduced (see Article 43). If the action is not carried out as described in Annex 1, costs will be rejected proportionally to the tasks or parts of the action not implemented (see Article 42). If the feasibility study is incomplete and thus does not meet the intended objective or is of insufficient quality (e.g. does not permit to assess the quality and potential of the innovation idea), ALL costs will be declared ineligible and there will be NO EU financial contribution . ARTICLE 7 — GENERAL OBLIGATION TO PROPERLY IMPLEMENT THE ACTION 7.1 General obligation to properly implement the action The beneficiary must implement the action as described in Annex 1 and in compliance with the provisions of the Agreement and all legal obligations under applicable EU, international and national law. 7.2 Consequences of non-compliance If the beneficiary does not properly implement the action (or part of it), the corresponding costs will be ineligible (see Article 6) and will be rejected (see Article 42). If the beneficiary breaches any other obligation, the grant may be reduced (see Article 43). This may also lead to any of the other measures described in Chapter 6 H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 1 494 ARTICLE 8 — RESOURCES TO IMPLEMENT THE ACTION—THIRD PARTIES INVOLVED IN THE ACTION 1. Appropriate own resources — Use of third party resources — Third parties involved in the action The rules of the General MGA on third party involvement are only partly applicable. Third party involvement in SME Ph1 actions is limited to purchases (Article 10) and subcontracting (Article 13). In-kind contributions (Articles 11 and 12 H2020 General MGA) and linked third parties (Article 14 H2020 General MGA) are NOT allowed (Since it is a very simple action and moreover targeted at SMEs, the Agency expects the beneficiaries to implement the main part of the work — without relying on third parties). ARTICLE 8 — RESOURCES TO IMPLEMENT THE ACTION — THIRD PARTIES INVOLVED IN THE ACTION The beneficiary must have the appropriate resources to implement the action. If it is necessary to implement the action, the beneficiary may: - purchase goods, works and services (see Article 10) and - call upon subcontractors to implement action tasks described in Annex 1 (see Article 13). In these cases, the beneficiary retains sole responsibility towards the Agency for implementing the action. The costs of purchases and subcontracts are ALL covered by the lump sum. NO other costs will be reimbursed. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 1 495 ARTICLE 10 — PURCHASE OF GOODS, WORKS OR SERVICES 1. Purchase of goods, works or services The rules on contracts for the purchase of goods, works or services for SME Ph1 actions are almost identical to the General MGA (see Article 13 H2020 General MGA). Since SMEs are, by definition, not ‘contracting authorities’, there is however NO obligation as regards compliance with the EU public procurement Directives 2004/18/EC, 2004/17/EC or Directive 2009/81/EC and the national legislation implementing them (— or any EU legislation that replaces these Directives118). Moreover, the obligations in Article 10.1 are NOT considered to be additional eligibility conditions, but ‘other obligations’. In case of breach, the Commission/Agency may therefore reduce the grant in proportion to the seriousness of the breach (instead of rejecting the costs). 118 See Directives 2014/24/EU and 2014/25/EU. ARTICLE 10 — PURCHASE OF GOODS, WORKS OR SERVICES 10.1 Rules for purchasing goods, works or services If necessary to implement the action, the beneficiary may purchase goods, works or services. The beneficiary must make such purchases ensuring the best value for money or, if appropriate, the lowest price. In doing so, it must avoid any conflict of interests (see Article 35). The beneficiary must ensure that the Agency, the Commission, the European Court of Auditors (ECA) and the European Anti-Fraud Office (OLAF) can exercise their rights under Articles 22 and 23 also towards its contractors. 10.2 Consequences of non-compliance If the beneficiary breaches any of its obligations under this Article, the grant may be reduced (see Article 43). Such breaches may also lead to any of the other measures described in Chapter 6. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 1 496 ARTICLE 13 — IMPLEMENTATION OF ACTION TASKS BY SUBCONTRACTORS 1. Subcontracting The rules on subcontracting for SME Ph1 actions are similar to the General MGA (see Articles 8 and 13 H2020 General MGA). The SME Ph1 MGA has however the following specificities: Subcontracting is NOT restricted to a limited part of the action. Moreover, the estimated costs do NOT have to be included in Annex 1 or shown in the table of estimated costs of Annex 2 (since they are covered by the lump sum). Since SMEs are not contracting authorities, there is also NO obligation as regards compliance with the EU public procurement Directives 2004/18/EC, 2004/17/EC or Directive 2009/81/EC and the national legislation implementing them (— or any EU legislation that replaces these Directives119). Finally, the obligations in Article 13.1 are NOT considered to be additional eligibility conditions, but ‘other obligations’. In case of breach, the Agency may therefore reduce the grant in proportion to the seriousness of the breach (instead of rejecting the costs). 119 See Directives 2014/24/EC and 2014/25/EC. ARTICLE 13 — IMPLEMENTATION OF ACTION TASKS BY SUBCONTRACTORS 13.1 Rules for subcontracting action tasks If necessary to implement the action, the beneficiary may award subcontracts covering the implementation of certain action tasks described in Annex 1. The beneficiary must award the subcontracts ensuring the best value for money or, if appropriate, the lowest price. In doing so, it must avoid any conflict of interests (see Article 35). The beneficiary must ensure that the Agency, the Commission, the European Court of Auditors (ECA) and the European Anti-Fraud Office (OLAF) can exercise their rights under Articles 22 and 23 also towards its subcontractors. The beneficiary must ensure that its obligations under Articles 35, 36, 38 and 46 also apply to the subcontractors. 13.2 Consequences of non-compliance If the beneficiary breaches any of its obligations under this Article, the grant may be reduced (see Article 43). Such breaches may also lead to any of the other measures described in Chapter 6. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 1 497 ARTICLE 18 — KEEPING RECORDS — SUPPORTING DOCUMENTATION 1. Records and other supporting documentation For SME Ph1 actions, beneficiaries do not need to keep full records on their actual costs; they only need to keep the evidence (documentation, records) that the action’s tasks (as described in Annex 1) were properly carried out. Examples: Evidence means documentation that proves that the tasks were carried out. Describing all the tasks relating to the feasibility study is usually enough. ARTICLE 18 — KEEPING RECORDS — SUPPORTING DOCUMENTATION 18.1 Obligation to keep records and other supporting documentation to support the costs declared The beneficiary must — for a period of three years after the balance is paid — keep adequate records and other supporting documentation to prove that the corresponding tasks or part of the action as described in Annex 1 have been implemented properly. The beneficiary does not need to identify the actual eligible costs covered or provide supporting documentation (such as accounting statements) to prove the amount declared as the lump sum. It must make them available upon request (see Article 17) or in the context of checks, reviews, audits or investigations (see Article 22). If there are on-going checks, reviews, audits, investigations, litigation or other pursuits of claims under the Agreement (including the extension of findings; see Article 22), the beneficiary must keep the records and other supporting documentation until the end of these procedures. The beneficiary must keep the original documents. Digital and digitalised documents are considered originals if they are authorised by the applicable national law. The Agency may accept non-original documents if it considers that they offer a comparable level of assurance 18.2 Consequences of non-compliance If the beneficiary breaches any of its obligations under this Article, costs insufficiently substantiated will be ineligible (see Article 6) and will be rejected (see Article 42). Such breaches may also lead to any of the other measures described in Chapter 6. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 1 498 ARTICLE 20 — REPORTING — PAYMENT REQUESTS ARTICLE 20 — REPORTING — PAYMENT REQUESTS 20.1 Obligation to submit the report The beneficiary must submit to the Agency (see Article 52) the final report set out in this Article. This report includes the request for payment and must be drawn up using the forms and templates provided in the electronic exchange system (see Article 52). 20.2 Reporting period The action has one reporting period: - RP1: from month 1 to month [X] 20.3 Periodic reports — Requests for interim payments Not applicable 20.4 Final report — Request for payment of the balance The beneficiary must submit to the Agency (see Article 52) — within 60 days following the end of the reporting period — a final report, which includes the request for payment of the balance. The final report must include the following: (a) a ‘final technical report’ containing a summary with: (i) an overview of the results; (ii) the conclusions on the action; (iii) the answers to the ‘questionnaire’, covering issues related to the action implementation and the economic and societal impact, notably in the context of the Horizon 2020 key performance indicators and the Horizon 2020 monitoring requirements. (b) a ‘final financial report’ containing a ‘financial statement’ (see Annex 4), which includes the request for payment of the balance. The financial statement must detail the eligible costs (lump sum costs; see Article 6 and Annex 2). Amounts which are not declared in the financial statement will not be taken into account by the Agency. The beneficiary must certify that: - the information provided is full, reliable and true; - the costs declared are eligible (i.e. that the action has been properly implemented; see Article 6); - the costs (i.e. the proper implementation of the action) can be substantiated by adequate records and supporting documentation (see Article 18) that will be produced upon request (see Article 17) or in the context of checks, reviews, audits and investigations (see Article 22). 20.5 Information on cumulative expenditure incurred Not applicable H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 1 499 1. Report When & What? At the end of the action, the beneficiary (for multi-beneficiary actions: the coordinator) must submit a final report, containing a:  final technical report  final financial report. 2. Reporting period SME Ph1 actions have only one reporting period (with one pre-financing payment; see Article 21). 3. Final financial report: Financial statement The final financial statement (for multi-beneficiary actions: one common financial statement for the consortium) is automatically pre-filled by the system (with EUR 50 000 as final grant amount and EUR 71 429 as the total eligible costs of the action; see Article 5). 20.6 Currency for financial statements The financial statement must be drafted in euro. 20.7 Language of report The report (technical and financial final report, including the financial statement) must be submitted in the language of the Agreement. […] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 1 500 ARTICLE 21 — PAYMENTS AND PAYMENT ARRANGEMENTS MONO-BENEFICIARY: ARTICLE 21 — PAYMENTS AND PAYMENT ARRANGEMENTS 21.1 Payments to be made The following payments will be made to the beneficiary: - one pre-financing payment; - one payment of the balance, on the basis of the request for payment of the balance (see Article 20). 21.2 Pre-financing payment — Amount — Amount retained for the Guarantee Fund The aim of the pre-financing is to provide the beneficiary with a float. It remains the property of the EU until the payment of the balance. The amount of the pre-financing payment will be EUR [insert amount (insert amount in words)]. The Agency will — except if Article 48 applies — make the pre-financing payment to the beneficiary within 30 days, either from the entry into force of the Agreement (see Article 58) or from 10 days before the starting date of the action (see Article 3), whichever is the latest. An amount of EUR [insert amount (insert amount in words)], corresponding to 5% of the maximum grant amount (see Article 5.1), is retained by the Agency from the pre-financing payment and transferred into the ‘Guarantee Fund’ 21.3 Interim payments — Amount — Calculation Not applicable 21.4 Payment of the balance — Amount — Calculation — Release of the amount retained for the Guarantee Fund The payment of the balance reimburses the remaining part of the eligible costs incurred by the beneficiary for the implementation of the action. If the total amount of earlier payments is greater than the final grant amount (see Article 5.3), the payment of the balance takes the form of a recovery (see Article 44). If the total amount of earlier payments is lower than the final grant amount, the Agency will pay the balance within 90 days from receiving the final report (see Article 20.4), except if Articles 47 or 48 apply. Payment is subject to the approval of the final report. Its approval does not imply recognition of the compliance, authenticity, completeness or correctness of its content. The amount due as the balance is calculated by the Agency by deducting the total amount of pre-financing already made, from the final grant amount determined in accordance with Article 5.3: {final grant amount (see Article 5.3) minus pre-financing made}. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 1 501 MULTI-BENEFICIARY: ARTICLE 21 — PAYMENTS AND PAYMENT ARRANGEMENTS […] 21.4 Payment of the balance — Amount — Calculation — Release of the amount retained for the Guarantee Fund The payment of the balance reimburses the remaining part of the eligible costs incurred by the beneficiaries for the implementation of the action. If the total amount of earlier payments is greater than the final grant amount (see Article 5.3), the payment of the balance takes the form of a recovery (see Article 44). If the total amount of earlier payments is lower than the final grant amount, the Agency will pay the balance within 90 days from receiving the final report (see Article 20.4), except if Articles 47 or 48 apply. Payment is subject to the approval of the final report. Its approval does not imply recognition of the compliance, authenticity, completeness or correctness of its content. The amount due as the balance is calculated by the Agency by deducting the total amount of pre- financing already made, from the final grant amount determined in accordance with Article 5.3: {final grant amount (see Article 5.3) minus pre-financing made}. At the payment of the balance, the amount retained for the Guarantee Fund (see above) will be released and: - if the balance is positive: the amount released will be paid in full to the beneficiary together with the amount due as the balance; - if the balance is negative (payment of the balance taking the form of recovery): it will be deducted from the amount released (see Article 44.1.2). If the resulting amount: - is positive, it will be paid to the beneficiary - is negative, it will be recovered. The amount to be paid may however be offset — without the beneficiary’s consent — against any other amount owed by the beneficiary to the Agency, the Commission or another executive agency (under the EU or Euratom budget), up to the maximum EU contribution indicated, for the beneficiary, in the estimated budget (see Annex 2). 21.5 Notification of amounts due The Agency will formally notify to the beneficiary the amount due and specify the final grant amount. In the case of reduction of the grant or recovery of undue amounts, the notification will be preceded by the contradictory procedure set out in Articles 43 and 44. […] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 1 502 1. Payments to be made — No interim payments SME Ph1 actions have only one reporting period (see Article 20.2), with one pre-financing payment. There are NO interim payments. The balance is paid when the action ends. 2. Amount of pre-financing payment How much? The pre-financing payment for SME Ph1 actions is up to 50% of the maximum grant amount (i.e. up to EUR 25 000). 3. Amount of the payment of the balance The amount of the payment of the balance depends on the overall financial situation of the action, after calculation of the final grant amount (see Article 5.3). At the payment of the balance, the amount retained for the Guarantee Fund (see above) will be released and: - if the balance is positive: the amount released will be paid in full to the coordinator together with the amount due as the balance; - if the balance is negative (payment of the balance taking the form of recovery): it will be deducted from the amount released (see Article 44.1.2). If the resulting amount: - is positive, it will be paid to the coordinator - is negative, it will be recovered from the coordinator. The amount to be paid may however be offset — without the coordinator’s consent — against any other amount owed by the coordinator to the Agency, the Commission or an[other] executive agency (under the EU or Euratom budget), up to the maximum grant amount set out in Article 5.1. […] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 1 503 ARTICLE 36 — CONFIDENTIALITY 1. Confidential information The SME Ph1 MGA foresees lighter provisions on confidentiality than the General MGA. ARTICLE 36 — CONFIDENTIALITY 36.1 General obligation to maintain confidentiality The parties must keep confidential any data, documents or other material (in any form) that is identified as confidential at the time it is disclosed (‘confidential information’). They may use confidential information to implement the Agreement. The confidentiality obligations no longer apply if: (a) the disclosing party agrees to release the other party; (b) the information was already known by the recipient or is given to him without obligation of confidentiality by a third party that was not bound by any obligation of confidentiality; (c) the recipient proves that the information was developed without the use of confidential information; (d) the information becomes generally and publicly available, without breaching any confidentiality obligation, or (e) the disclosure of the information is required by EU or national law. 36.2 Consequences of non-compliance If the beneficiary breaches any of its obligations under this Article, the grant may be reduced (see Article 43). Such breaches may also lead to any of the other measures described in Chapter 6. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 1 504 ARTICLE 38 — PROMOTING THE ACTION — VISIBILITY OF EU FUNDING ARTICLE 38 — PROMOTING THE ACTION — VISIBILITY OF EU FUNDING 38.1 Obligation to promote the action and its results — Information on EU funding — Obligation and right to use the EU emblem — Disclaimer excluding Agency responsibility — Agency right to use materials, documents or information The beneficiary must promote the action and its results. Any communication activity related to the action must: (c) display the EU emblem and (d) include the following text: “This project has received funding from the [European Union’s Horizon 2020 research and innovation programme][Euratom research and training programme 2014-2018] under grant agreement No [number]”. Any communication activity related to the action must indicate that it reflects only the author’s view and that the Agency is not responsible for any use that may be made of the information it contains. The Agency may use, for its own communication and publicising activities, information relating to the action, documents notably summaries for publication and public deliverables as well as any other material such as pictures or audio-visual material that it receives from the beneficiary (including in electronic form). The right to use the beneficiary’s materials, documents and information includes: (a) use for its own purposes (in particular, making them available to persons working for the Agency or any other EU institution, body, office or agency or body or institutions in EU Member States; and copying or reproducing them in whole or in part, in unlimited numbers); (b) distribution to the public (in particular, publication as hard copies and in electronic or digital format, publication on the internet, as a downloadable or non-downloadable file, broadcasting by any channel, public display or presentation, communicating through press information services, or inclusion in widely accessible databases or indexes); (c) editing or redrafting for communication and publicising activities (including shortening, summarising, inserting other elements (such as meta-data, legends, other graphic, visual, audio or text elements), extracting parts (e.g. audio or video files), dividing into parts, use in a compilation); (d) translation; (e) giving access in response to individual requests under Regulation (EC) No 1049/2001, without the right to reproduce or exploit; (f) storage in paper, electronic or other form; (g) archiving, in line with applicable document-management rules, and (h) the right to authorise third parties to act on its behalf or sub-license the modes of exploitation set out in points (b),(c),(d) and (f) to third parties if needed for the communication and publicising activities of the Agency. 38.2 Consequences of non-compliance If the beneficiary breaches any of its obligations under this Article, the grant may be reduced (see Article 43). Such breaches may also lead to any of the other measures described in Chapter 6. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 1 505 1. Communication activities (by the beneficiaries) — Promoting the action — Visibility of EU funding The SME Ph1 MGA foresees lighter requirements for promoting the action and acknowledging EU funding. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 1 506 ARTICLE 41 — DIVISION OF THE BENEFICIARY’S ROLES AND RESPONSIBILITIES — RELATIONSHIP WITH COMPLEMENTARY BENEFICIARIES — RELATIONSHIP WITH PARTNERS OF A JOINT ACTION MONO-BENEFICIARY: ARTICLE 41 — DIVISION OF BENEFICIARIES’ ROLES AND RESPONSIBILITIES — RELATIONSHIP WITH COMPLEMENTARY BENEFICIARIES — RELATIONSHIP WITH PARTNERS OF A JOINT ACTION 41.1 Role and responsibility towards the Agency The beneficiary has full responsibility for implementing the action and complying with the Agreement. The beneficiary is itself responsible for: (a) monitoring that the action is implemented properly (see Article 7); (b) informing the Agency immediately of any events or circumstances likely to affect significantly or delay the implementation of the action (see Article 17); (c) submit the deliverables and the report to the Agency (see Articles 19 and 20); (d) submit to the Agency in good time any documents or information required by it and may not subcontract these tasks to any third party. 41.2 Internal division of roles and responsibilities Not applicable […] MULTI-BENEFICIARY: ARTICLE 41 — DIVISION OF BENEFICIARIES’ ROLES AND RESPONSIBILITIES — RELATIONSHIP WITH COMPLEMENTARY BENEFICIARIES — RELATIONSHIP WITH PARTNERS OF A JOINT ACTION 41.1 Roles and responsibilities towards the Agency The beneficiaries have full responsibility for implementing the action and complying with the Agreement. The beneficiaries are jointly and severally liable for the technical implementation of the action as described in Annex 1. If a beneficiary fails to implement its part of the action, the other beneficiaries become responsible for implementing this part (without being entitled to any additional EU funding for doing so), unless the Agency expressly relieves them of this obligation. The financial responsibility of each beneficiary is governed by Articles 44, 45 and 46. 41.2 Internal division of roles and responsibilities The internal roles and responsibilities of the beneficiaries are divided as follows: (a) Each beneficiary must: (i) keep information stored in the Beneficiary Register (via the electronic exchange system) up to date (see Article 17); (ii) inform the coordinator immediately of any events or circumstances likely to affect significantly or delay the implementation of the action (see Article 17); H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 1 507 1. Division of roles and responsibilities — Responsibilities towards the Agency The rules on internal division of roles and responsibilities are similar to the General MGA (see Article 41 H2020 General MGA). Since for SME Ph1 multi-beneficiary actions there is however only one (common) financial statement (see Article 20), there is NO obligation for the beneficiaries to submit their own individual financial statements to the coordinator. (iii) submit to the coordinator in good time: - the data needed to draw up the technical report (see Article 20); - ethics committee opinions and notifications or authorisations for activities raising ethical issues (see Article 34); - any other documents or information required by the Agency or the Commission under the Agreement, unless the Agreement requires the beneficiary to submit this information directly to the Agency or the Commission. (b) The coordinator must: (i) monitor that the action is implemented properly (see Article 7); (ii) act as the intermediary for all communications between the beneficiaries and the Agency (in particular, providing the Agency with the information described in Article 17), unless the Agreement specifies otherwise; (iii) request and review any documents or information required by the Agency and verify their completeness and correctness before passing them on to the Agency; (iv) submit the deliverables and the report to the Agency (see Articles 19 and 20); (v) ensure that all payments are made to the other beneficiaries without unjustified delay (see Article 21); (vi) inform the Agency of the amounts paid to each beneficiary, when required under the Agreement (see Articles 44 and 50) or requested by the Agency. The coordinator may not delegate the above-mentioned tasks to any other beneficiary or subcontract them to any third party. [OPTION to be used when the coordinator is a secondary or higher education establishment or public body and there is an ‘authorisation to administer’ given to a third party created, controlled or affiliated to the coordinator: As an exception, the coordinator delegates the tasks set out in Point 2(b)(v) and (vi) above to [insert name of third party with an authorisation to administer]. The coordinator retains sole responsibility for the EU contribution and for compliance with the obligations under the Agreement.] […] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 1 508 ARTICLE 42 — REJECTION OF INELIGIBLE COSTS 1. Rejection of ineligible costs The rules on rejection of ineligible costs are in principle the same as in the General MGA (see Article 42 H2020 General MGA). However, since SME Ph1 grants consist in a lump sum, the main cost eligibility condition refers to ‘proper implementation of the action in accordance with Annex 1’ (see Article 6.1). Improper implementation therefore leads to the ineligibility of the costs (NOT reduction of the grant; see also Article 7). If the action is not carried out as described in Annex 1, the costs will be considered ineligible and rejected proportionally to the tasks or parts of the action not implemented. If the feasibility study is incomplete and thus does not meet the intended objective or is of insufficient quality (e.g. does not permit to assess the quality and potential of the innovation idea), ALL costs will be declared ineligible and there will be NO EU financial contribution. A ‘rejection of costs’ will be made for improper implementation of the action (see Article 7). ARTICLE 42 — REJECTION OF INELIGIBLE COSTS 42.1 Conditions 42.1.1 The Agency will —at the payment of the balance or afterwards — reject any costs which are ineligible (i.e. if the action as described in Annex 1 is not properly implemented; see Article 6), in particular following checks, reviews, audits or investigations (see Article 22). 42.1.2 The rejection may also be based on the extension of findings from other grants to this grant, under the conditions set out in Article 22.5.2. 42.2 Ineligible costs to be rejected — Calculation — Procedure Ineligible costs will be rejected proportionally to the tasks or parts of the action not implemented. If the Agency rejects costs without reduction of the grant (see Article 43) or recovery of undue amounts (see Article 44), it will formally notify the beneficiary the rejection of costs, the amounts and the reasons why (if applicable, together with the notification of amounts due; see Article 21.5). The beneficiary may — within 30 days of receiving notification — formally notify the Agency of its disagreement and the reasons why. If the Agency rejects costs with reduction of the grant or recovery of undue amounts, it will formally notify the rejection in the ‘pre-information letter’ on reduction or recovery set out in Articles 43 and 44. 42.3 Effects If the Agency rejects costs at the payment of the balance, it will deduct them from the total eligible costs declared, for the action, in the financial statement (see Article 20.4). It will then calculate the payment of the balance as set out in Article 21.4. If the Agency rejects costs after the payment of the balance, it will deduct the amount rejected from the total eligible costs declared, in the financial statement. It will then calculate the revised final grant amount as set out in Article 5.4. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 1 509 ARTICLE 43 — REDUCTION OF THE GRANT 1. Reduction of the grant The rules on rejection of ineligible costs are in principle the same as in the General MGA (see Article 42 H2020 General MGA). However, since SME Ph1 grants consist in a lump sum, ‘proper implementation of the action in accordance with Annex 1’ is an eligibility rule and does NOT lead to the reduction of the grant (see also Articles 6.1 and 7). The grant may thus be reduced if ‘other obligations’ have been breached (e.g. another obligation under the GA or applicable EU, international and national law; see Article 43 H2020 General MGA). A ‘reduction of the grant’ is possible for any breach of obligation other than proper implementation (under the GA or applicable EU, international and national law; see Article 7). . ARTICLE 43 — REDUCTION OF THE GRANT 43.1 Conditions 43.1.1 The Agency may — at the payment of the balance or afterwards — reduce the maximum grant amount (see Article 5.1), if an obligation under the Agreement (other than improper implementation of the action as described in Annex 1) has been breached 43.1.2 The Agency may also reduce the maximum grant amount on the basis of the extension of findings from other grants to this grant, under the conditions set out in Article 22.5.2. 43.2 Amount to be reduced — Calculation — Procedure The amount of the reduction will be proportionate to the seriousness of the breach. Before reduction of the grant, the Agency will formally notify a ‘pre-information letter’ to the beneficiary: - informing it of its intention to reduce the grant, the amount it intends to reduce and the reasons why and - inviting it to submit observations within 30 days of receiving notification. If the Agency does not receive any observations or decides to pursue reduction despite the observations it has received, it will formally notify confirmation of the reduction (if applicable, together with the notification of amounts due; see Article 21). 43.3 Effects If the Agency reduces the grant at the time of the payment of the balance, it will calculate the reduced grant amount for the action and then determine the amount due as payment of the balance (see Articles 5.3.4 and 21.4). If the Agency reduces the grant after the payment of the balance, it will calculate the revised final grant amount (see Article 5.4). If the revised final grant amount is lower than the final grant amount, the Agency will recover the difference (see Article 44). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 1 510 ARTICLE 44 — RECOVERY OF UNDUE AMOUNTS MONO-BENEFICIARY: ARTICLE 44 — RECOVERY OF UNDUE AMOUNTS 44.1 Amount to be recovered — Calculation — Procedure The Agency will — at the payment of the balance or afterwards — claim back any amount that was paid, but is not due under the Agreement. 44.1.1 Recovery after termination of a beneficiary’s participation Not applicable 44.1.2 Recovery at payment of the balance If the payment of the balance takes the form of a recovery (see Article 21.4), the Agency will formally notify a ‘pre-information letter’ to the beneficiary: - informing it of its intention to recover, the amount due as the balance and the reasons why; - specifying that it intends to deduct the amount to be recovered from the amount retained for the Guarantee Fund; and - inviting it to submit observations within 30 days of receiving notification. If no observations are submitted or the Agency decides to pursue recovery despite the observations it has received, it will confirm recovery (together with the notification of amounts due; see Article 21.5) and: - pay the difference between the amount to be recovered and the amount retained for the Guarantee Fund, if the difference is positive or - formally notify to the beneficiary a debit note for the difference between the amount to be recovered and the amount retained for the Guarantee Fund, if the difference is negative. This note will also specify the terms and the date for payment. If payment is not made by the date specified in the debit note, the Agency will recover the amount: (a) by offsetting it — without the beneficiary’s consent — against any amounts owed to the beneficiary by the Agency, the Commission or another executive agency (from the EU or Euratom budget). In exceptional circumstances, to safeguard the EU’s financial interests, the Agency may offset before the payment date specified in the debit note; (b) by drawing on the Guarantee Fund. The Agency or the Commission will formally notify the beneficiary the debit note on behalf of the Guarantee Fund and recover the amount: (i) not applicable; (ii) by taking legal action (see Article 57) or by adopting an enforceable decision under Article 299 of the Treaty on the Functioning of the EU (TFEU) and Article 79(2) of the Financial Regulation No 966/2012. If payment is not made by the date in the debit note, the amount to be recovered (see above) will be increased by late-payment interest at the rate set out in Article 21.11, from the day following the payment date in the debit note, up to and including the date the Agency or the Commission receives full payment of the amount. Partial payments will be first credited against expenses, charges and late-payment interest and then against the principal. Bank charges incurred in the recovery process will be borne by the beneficiary, unless Directive 2007/64/EC applies. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 1 511 MULTI-BENEFICIARY: ARTICLE 44 — RECOVERY OF UNDUE AMOUNTS 44.1 Amount to be recovered — Calculation — Procedure The Agency will —at the payment of the balance or afterwards — claim back any amount that was paid, but is not due under the Agreement. 44.1.1 Recovery after termination of a beneficiary’s participation Not applicable 44.1.3 Recovery of amounts after payment of the balance If, the revised final grant amount (see Article 5.4) is lower than the final grant amount, the beneficiary must repay the difference to the Agency. The Agency will formally notify a pre-information letter to the beneficiary: - informing it of its intention to recover, the due amount and the reasons why and - inviting it to submit observations within 30 days of receiving notification. If no observations are submitted or the Agency decides to pursue recovery despite the observations it has received, it will confirm the amount to be recovered and formally notify to the beneficiary a debit note. This note will also specify the terms and the date for payment. If payment is not made by the date specified in the debit note, the Agency will recover the amount: (a) by offsetting it — without the beneficiary’s consent — against any amounts owed to the beneficiary by the Agency, the Commission or another executive agency (from the EU or Euratom budget). In exceptional circumstances, to safeguard the EU’s financial interests, the Agency may offset before the payment date specified in the debit note; (b) by drawing on the Guarantee Fund. The Agency or the Commission will formally notify the beneficiary the debit note on behalf of the Guarantee Fund and recover the amount: (i) not applicable; (ii) by taking legal action (see Article 57) or by adopting an enforceable decision under Article 299 of the Treaty on the Functioning of the EU (TFEU) and Article 79(2) of the Financial Regulation No 966/2012. If payment is not made by the date in the debit note, the amount to be recovered (see above) will be increased by late-payment interest at the rate set out in Article 21.11, from the day following the date for payment in the debit note, up to and including the date the Agency or the Commission receives full payment of the amount. Partial payments will be first credited against expenses, charges and late-payment interest and then against the principal. Bank charges incurred in the recovery process will be borne by the beneficiary, unless Directive 2007/64/EC applies. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 1 512 44.1.2 Recovery at payment of the balance If the payment of the balance takes the form of a recovery (see Article 21.4), the Agency will formally notify a ‘pre-information letter’ to the coordinator: - informing it of its intention to recover, the amount due as the balance and the reasons why; - specifying that it intends to deduct the amount to be recovered from the amount retained for the Guarantee Fund and - inviting the coordinator to submit observations within 30 days of receiving notification. If no observations are submitted or the Agency decides to pursue recovery despite the observations it has received, it will confirm recovery (together with the notification of amounts due; see Article 21.5) and: - pay the difference between the amount to be recovered and the amount retained for the Guarantee Fund, if the difference is positive or - formally notify to the coordinator a debit note for the difference between the amount to be recovered and the amount retained for the Guarantee Fund, if the difference is negative. This note will also specify the terms and the date for payment. If the coordinator does not repay the Agency by the date in the debit note, the Agency or the Commission will recover the amount: (a) by offsetting it — without the coordinator’s consent — against any amounts owed to the coordinator by the Agency, the Commission or another executive agency (from the EU or Euratom budget). In exceptional circumstances, to safeguard the EU’s financial interests, the Agency may offset before the payment date specified in the debit note; (b) by drawing on the Guarantee Fund. The Agency or the Commission will formally notify the coordinator the debit note on behalf of the Guarantee Fund and recover the amount: (i) not applicable; (ii) by taking legal action (see Article 57) or by adopting an enforceable decision under Article 299 of the Treaty on the Functioning of the EU (TFEU) and Article 79(2) of the Financial Regulation No 966/2012. If payment is not made by the date in the debit note, the amount to be recovered (see above) will be increased by late-payment interest at the rate set out in Article 21.11, from the day following the payment date in the debit note, up to and including the date the Agency or the Commission receives full payment of the amount. Partial payments will be first credited against expenses, charges and late-payment interest and then against the principal. Bank charges incurred in the recovery process will be borne by the coordinator, unless Directive 2007/64/EC applies. 44.1.3 Recovery of amounts after payment of the balance If the revised final grant amount (see Article 5.4) is lower than the final grant amount, the coordinator must repay the difference to the Agency. The Agency will formally notify a pre-information letter to the coordinator: - informing it of its intention to recover, the due amount and the reasons why and - inviting it to submit observations within 30 days of receiving notification. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 1 513 1. Recovery of undue amounts The rules on recovery of undue amounts are in principle the same as in the General MGA (see Article 44 H2020 General MGA). The SME Ph1 multi-beneficiary MGA has, however, the following specificities: Since the coordinator alone is financially responsible (for the entire grant), the Agency will recover ONLY from it. Best practice: Beneficiaries should foresee internal arrangements to redistribute the financial responsibility internally in the consortium in a fair way. There is therefore also NO need for a ‘report on the distribution of payments’. If no observations are submitted or the Agency decides to pursue recovery despite the observations it has received, it will confirm the amount to be recovered and formally notify to the coordinator a debit note. This note will also specify the terms and the date for payment. If payment is not made by the date specified in the debit note, the Agency will recover the amount: (a) by offsetting it — without the coordinator’s consent — against any amounts owed to the coordinator by the Agency, the Commission or another executive agency (from the EU or Euratom budget). In exceptional circumstances, to safeguard the EU’s financial interests, the Agency may offset before the payment date specified in the debit note; (b) by drawing on the Guarantee Fund. The Agency or the Commission will formally notify the coordinator the debit note on behalf of the Guarantee Fund and recover the amount: (i) not applicable; (ii) by taking legal action (see Article 57) or by adopting an enforceable decision under Article 299 of the Treaty on the Functioning of the EU (TFEU) and Article 79(2) of the Financial Regulation No 966/2012. If payment is not made by the date in the debit note, the amount to be recovered (see above) will be increased by late-payment interest at the rate set out in Article 21.11, from the day following the date for payment in the debit note, up to and including the date the Agency or the Commission receives full payment of the amount. Partial payments will be first credited against expenses, charges and late-payment interest and then against the principal. Bank charges incurred in the recovery process will be borne by the coordinator, unless Directive 2007/64/EC applies. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 1 514 ARTICLE 50 — TERMINATION OF THE AGREEMENT OR OF THE PARTICIPATION OF ONE OR MORE BENEFICIARIES MONO-BENEFICIARY: ARTICLE 50 — TERMINATION OF THE AGREEMENT 50.1 Termination of the Agreement, by the beneficiary 50.1.1 Conditions and procedure The beneficiary may terminate the Agreement. The beneficiary must formally notify termination to the Agency (see Article 52), stating: - the reasons why and - the date the termination will take effect. This date must be after the notification. If no reasons are given or if the Agency considers the reasons do not justify termination, the Agreement will be considered to have been ‘terminated improperly’. The termination will take effect on the day specified in the notification. 50.1.2 Effects The beneficiary must submit — within 60 days from when termination takes effect — the final report (see Article 20). If the Agency does not receive the report within the deadline (see above), no costs will be reimbursed. The Agency will calculate the final grant amount (see Article 5.3) and the balance (see Article 21), on the basis of the report submitted, the eligible costs and compliance with other obligations under the Agreement. In case of improper termination, the grant will be reduced by 100% (see Article 43). 50.2 Termination of the participation of one or more beneficiaries, by the beneficiaries Not applicable 50.3 Termination of the Agreement, by the Agency 50.3.1 Conditions The Agency may terminate the Agreement if: (a) not applicable; (b) a change to the beneficiary’s legal, financial, technical, organisational or ownership situation is likely to substantially affect or delay the implementation of the action or calls into question the decision to award the grant; (c) not applicable; (d) implementation of the action is prevented by force majeure (see Article 51) or suspended by the beneficiary (see Article 49.1) and either: (i) resumption is impossible, or (ii) the necessary changes to the Agreement would call into question the decision awarding the grant or breach the principle of equal treatment of applicants; (e) the beneficiary is declared bankrupt, being wound up, having its affairs administered by the courts, has entered into an arrangement with creditors, has suspended business activities, or is subject to any other similar proceedings or procedures under national law; H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 1 515 (f) the beneficiary (or a natural person who has the power to represent or take decisions on its behalf) has been found guilty of professional misconduct, proven by any means; (g) the beneficiary does not comply with the applicable national law on taxes and social security; (h) the action has lost scientific or technological relevance; (i) not applicable; (j) not applicable; (k) the beneficiary (or a natural person who has the power to represent or take decisions on its behalf) has committed fraud, corruption, or is involved in a criminal organisation, money laundering or any other illegal activity affecting the EU’s financial interests; (l) the beneficiary (or a natural person who has the power to represent or take decisions on its behalf) has — in the award procedure or under the Agreement — committed: (i) substantial errors, irregularities, fraud or (ii) serious breach of obligations, including improper implementation of the action, submission of false information, failure to provide required information, breach of ethical principles; (m) the beneficiary has committed — in other EU or Euratom grants awarded to it under similar conditions — systemic or recurrent errors, irregularities, fraud or serious breach of obligations that have a material impact on this grant (‘extension of findings from other grants to this grant’). 50.3.2 Procedure Before terminating the Agreement, the Agency will formally notify the beneficiary: - informing it of its intention to terminate and the reasons why and - inviting it, within 30 days of receiving notification, to submit observations and — in case of Point (l.ii) above — to inform the Agency of the measures to ensure compliance with the obligations under the Agreement. If the Agency does not receive observations or decides to pursue the procedure despite the observations it has received, it will formally notify to the beneficiary confirmation of the termination and the date it will take effect. Otherwise, it will formally notify that the procedure is not continued. The termination will take effect: - for terminations under Points (b), (e), (g), (h), (j), and (l.ii) above: on the day specified in the notification of the confirmation (see above); - for terminations under Points (d), (f), (i), (k), (l.i) and (m) above: on the day after the notification of the confirmation is received by the beneficiary. 50.3.3 Effects The beneficiary must — within 60 days from when termination takes effect — submit the final report (see Article 20). If the Agency does not receive the report within the deadline (see above), no costs will be reimbursed. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 1 516 MULTI-BENEFICIARY: ARTICLE 50 — TERMINATION OF THE AGREEMENT OR OF THE PARTICIPATION OF ONE OR MORE BENEFICIARIES 50.1 Termination of the Agreement, by the beneficiaries 50.1.1 Conditions and procedure The beneficiaries may terminate the Agreement. The coordinator must formally notify termination to the Agency (see Article 52), stating: - the reasons why and - the date the termination will take effect. This date must be after the notification. If no reasons are given or if the Agency considers the reasons do not justify termination, the Agreement will be considered to have been ‘terminated improperly’. The termination will take effect on the day specified in the notification. 50.1.2 Effects The coordinator must submit — within 60 days from when termination takes effect — the final report (see Article 20). If the Agency does not receive the report within the deadline (see above), no costs will be reimbursed. The Agency will calculate the final grant amount (see Article 5.3) and the balance (see Article 21), on the basis of the report submitted, the eligible costs and compliance with other obligations under the Agreement. In case of improper termination, the grant will be reduced by 100% (see Article 43). 50.2 Termination of the participation of one or more beneficiaries, by the beneficiaries 50.2.1 Conditions and procedure The participation of one or more beneficiaries may be terminated by the coordinator, on request of the beneficiary concerned or on behalf of the other beneficiaries. The coordinator must formally notify termination to the Agency (see Article 52) and inform the beneficiary concerned. If the coordinator’s participation is terminated without its agreement, the formal notification must be done by another beneficiary (acting on behalf of the other beneficiaries). The notification must include: - the reasons why; - the opinion of the beneficiary concerned (or proof that this opinion has been requested in writing); - the date the termination takes effect. This date must be after the notification, and The Agency will calculate the final grant amount (see Article 5.3) and the balance (see Article 21), on the basis of the report submitted, the eligible costs and compliance with other obligations under the Agreement. This does not affect the Agency’s right to reduce the grant (see Article 43) or to impose administrative and financial penalties (Article 45). The beneficiary may not claim damages due to termination by the Agency (see Article 46). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 1 517 - a request for amendment (see Article 55), with a proposal for reallocation of the tasks (see Annex 1) and, if necessary, the addition of one or more new beneficiaries (see Article 56). If termination takes effect after the period set out in Article 3, no request for amendment must be included unless the beneficiary concerned is the coordinator. In this case, the request for amendment must propose a new coordinator. If this information is not given or if the Agency considers that the reasons do not justify termination, the participation will be considered to have been terminated improperly. The termination will take effect on the day specified in the notification. 50.2.2 Effects If the request for amendment is rejected by the Agency (because it calls into question the decision awarding the grant or breaches the principle of equal treatment of applicants) the Agreement may be terminated according to Article 50.3.1(c). If the request for amendment is accepted by the Agency, the Agreement is amended to introduce the necessary changes (see Article 55). Improper termination may lead to a reduction of the grant (see Article 43) or termination of the Agreement (see Article 50). After termination, the concerned beneficiary’s obligations (in particular Articles 20, 22, 23, 36, 38 and 40) continue to apply. 50.3 Termination of the Agreement or of the participation of one or more beneficiaries, by the Agency 50.3.1 Conditions The Agency may terminate the Agreement or the participation of one or more beneficiaries, if: (a) one or more beneficiaries do not accede to the Agreement (see Article 56); (b) a change to their legal, financial, technical, organisational or ownership situation [(or those of its linked third parties)] is likely to substantially affect or delay the implementation of the action or calls into question the decision to award the grant; (c) following termination of participation for one or more beneficiaries (see above), the necessary changes to the Agreement would call into question the decision awarding the grant or breach the principle of equal treatment of applicants (see Article 55); (d) implementation of the action is prevented by force majeure (see Article 51) or suspended by the coordinator (see Article 49.1) and either: (i) resumption is impossible, or (ii) the necessary changes to the Agreement would call into question the decision awarding the grant or breach the principle of equal treatment of applicants; (e) a beneficiary is declared bankrupt, being wound up, having its affairs administered by the courts, has entered into an arrangement with creditors, has suspended business activities, or is subject to any other similar proceedings or procedures under national law; (f) a beneficiary (or a natural person who has the power to represent or take decisions on its behalf) has been found guilty of professional misconduct, proven by any means; H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 1 518 (g) a beneficiary does not comply with the applicable national law on taxes and social security; (h) the action has lost scientific or technological relevance; (i) not applicable; (j) not applicable; (k) a beneficiary (or a natural person who has the power to represent or take decisions on its behalf) has committed fraud, corruption, or is involved in a criminal organisation, money laundering or any other illegal activity affecting the EU’s financial interests; (l) a beneficiary (or a natural person who has the power to represent or take decisions on its behalf) has — in the award procedure or under the Agreement — committed: (i) substantial errors, irregularities, fraud or (ii) serious breach of obligations, including improper implementation of the action, submission of false information, failure to provide required information, breach of ethical principles; (m) a beneficiary has committed — in other EU or Euratom grants awarded to it under similar conditions — systemic or recurrent errors, irregularities, fraud or serious breach of obligations that have a material impact on this grant (‘extension of findings from other grants to this grant’). 50.3.2 Procedure Before terminating the Agreement or participation of one or more beneficiaries, the Agency will formally notify the coordinator: - informing it of its intention to terminate and the reasons why and - inviting it, within 30 days of receiving notification, to submit observations and — in case of Point (l.ii) above — to inform the Agency of the measures to ensure compliance with the obligations under the Agreement. If the Agency does not receive observations or decides to pursue the procedure despite the observations it has received, it will formally notify to the coordinator confirmation of the termination and the date it will take effect. Otherwise, it will formally notify that the procedure is not continued. The termination will take effect: - for terminations under Points (b), (c), (e), (g), (h), (j), and (l.ii) above: on the day specified in the notification of the confirmation (see above); - for terminations under Points (a), (d), (f), (i), (k), (l.i) and (m) above: on the day after the notification of the confirmation is received by the coordinator. 50.3.3 Effects (a) for termination of the Agreement: The coordinator must — within 60 days from when termination takes effect —, submit the final report (see Article 20). If the Agency does not receive the report within the deadline (see above), no costs will be reimbursed The Agency will calculate the final grant amount (see Article 5.3) and the balance (see Article 21), on the basis of the report submitted, the eligible costs and compliance with other obligations under the Agreement. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 1 519 1. Termination of the GA (by the beneficiaries) The rules on termination are in principle the same as in the General MGA (see Article 50 H2020 General MGA). However, for SME Ph1 actions, improper termination by the beneficiaries will lead to a 100% reduction of the grant. 2. Termination of the participation of one or more beneficiaries (by the beneficiaries) The rules on termination are in principle the same as in the General MGA (see Article 50 H2020 General MGA). However, the SME Ph1 multi-beneficiary MGA has the following specificities: The notification must include a reallocation of the tasks (Annex 1), but NO reallocation of the estimated budget of the beneficiary concerned. Moreover, if the GA continues (i.e. it is amended), the termination of the beneficiary will NOT have any effect on the estimated budget (since there is a lump sum for the entire action, i.e. the consortium together). 3. Termination of the Agreement or of the participation of one or more beneficiaries (by the Agency) This does not affect the Agency’s right to reduce the grant (see Article 43) or to impose administrative and financial penalties (Article 53). The beneficiaries may not claim damages due to termination by the Agency (see Article 46). After termination, the beneficiaries’ obligations (in particular Articles 20, 22, 23, Section 3 of Chapter 4, 36, 37, 38 and 40) continue to apply. (b) for termination of the participation of one or more beneficiaries: The coordinator must — within 60 days from when termination takes effect — submit a request for amendment (see Article 55), with a proposal for reallocation of the tasks (see Annex 1) and, if necessary, the addition of one or more new beneficiaries (see Article 56). If termination is notified after the period set out in Article 3, no request for amendment must be submitted unless the beneficiary concerned is the coordinator. In this case the request for amendment must propose a new coordinator. If the request for amendment is rejected by the Agency (because it calls into question the decision awarding the grant or breaches the principle of equal treatment of applicants), the Agreement may be terminated according to Article 50.3.1(c). If the request for amendment is accepted by the Agency, the Agreement is amended to introduce the necessary changes (see Article 56). After termination, the concerned beneficiary’s obligations (in particular Articles 20, 22, 23, 36, 38 and 40) continue to apply. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 1 520 The rules on termination are in principle the same as in the General MGA (see Article 50 H2020 General MGA). However, the SME Ph1 multi-beneficiary MGA has the following specificities: The request for amendment (which the coordinator must send 60 after termination) must include a reallocation of the tasks (Annex 1), but NO reallocation of the estimated budget of the beneficiary concerned. If the GA continues (i.e. it is amended), the termination of the beneficiary will NOT have any effect on the estimated budget (since there is a lump sum for the entire action, i.e. the consortium as a whole). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 2 521 IV.3 H2020 MGA SME Ph2: Annotations ARTICLE 2 — ACTION TO BE IMPLEMENTED 1. SME Ph2 actions What? SME Ph2 funds:  the implementation of an innovation idea (including, prototyping, testing, demonstrating, piloting, large-scale product validation and market replication) — based on a strategic business plan either developed through phase 1 or another means. The innovation idea must have commercial potential and considerable novelty for its sector (i.e. for technological innovation ideas: ‘technology readiness level’ of 6 or above; see General Annex G to the Main Work Programme). The implementation of Phase 2 must focus on innovation activities (e.g. demonstration, testing, prototyping, piloting, scaling-up, miniaturisation, design, market replication) but may also include some research. A project may be funded in Phase 2 even if it was not funded in Phase 1. SME actions are normally mono-beneficiary actions, but can also be multi-beneficiary. SME actions are funded under Part II of the Horizon 2020 Framework Programme: ‘Innovation in SMEs’ (e.g. H2020-SMEINST-2-2014). For more information on SME Instrument Ph2 actions, see the Online Manual and the H2020 grants fact sheets on the Participant Portal. For more information on the conditions for participation and funding, see the Online Manual or the General Annexes to the Main Work Programme and the call and topics pages of the call. ARTICLE 2 — ACTION TO BE IMPLEMENTED The grant is awarded for the action entitled [insert title of the action] — [insert acronym] (‘action’), as described in Annex 1. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 2 522 ARTICLE 4 — ESTIMATED BUDGET AND BUDGET TRANSFERS 1. Budget categories The SME Ph2 MGA uses the same budget categories as the General MGA. Budget categories of the SME Ph2 MGA:  direct personnel costs  costs for employees (or equivalent)  costs for natural persons working under a direct contract  costs of personnel seconded by a third party against payment  costs for SME owners without salary  costs for beneficiaries that are natural persons without salary  direct costs of subcontracting  direct costs of providing financial support to third parties (if option applies)  other direct costs  travel costs and related subsistence allowances  equipment costs  costs of other goods and services  capitalised and operating costs of large research infrastructure  indirect costs  specific cost categories (if option applies). Thus, the SME Ph2 MGA does NOT have:  personnel costs for providing trans-national access to research infrastructure The budget categories are relevant for the estimated budget (Article 4 and Annex 2), forms of costs (Article 5), cost eligibility rules (Article 6.2) and the cost declarations (i.e. financial statements; Article 20 and Annex 4). . ARTICLE 4 — ESTIMATED BUDGET AND BUDGET TRANSFERS 4.1 Estimated budget The ‘estimated budget’ for the action is set out in Annex 2. It contains the estimated eligible costs and the forms of costs, broken down by beneficiary [(and linked third party)] and budget category (see Articles 5, 6, [and 14]). […] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 2 523 ARTICLE 5 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATE AND FORMS OF COSTS ARTICLE 5 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATE AND FORMS OF COSTS […] 5.2 Form of grant, reimbursement rate and forms of costs The grant reimburses 70% of the action’s eligible costs (see Article 6) (‘reimbursement of eligible costs grant’) (see Annex 2). The estimated eligible costs of the action are EUR [insert amount (insert amount in words)]. Eligible costs (see Article 6) must be declared under the following forms (‘forms of costs’): (a) for direct personnel costs [(excluding direct personnel costs covered by the unit cost under Point (f))] 6 : - as actually incurred costs (‘actual costs’) or - on the basis of an amount per unit calculated by the beneficiary in accordance with its usual cost accounting practices (‘unit costs’). Personnel costs for SME owners or beneficiaries that are natural persons not receiving a salary (see Article 6.2, Points A.4 and A.5) must be declared on the basis of the amount per unit set out in Annex 2 (unit costs); (b) for direct costs of subcontracting [(excluding subcontracting costs covered by the unit cost under Point (f))] 7 : as actually incurred costs (actual costs); (c) for direct costs of providing financial support to third parties [(excluding costs of financial support covered by the unit cost under Point (f))] 8 : [OPTION to be used if Article 15 applies: as actually incurred costs (actual costs);][OPTION: not applicable;] (d) for other direct costs [(excluding other direct costs covered by the unit cost under Point (f))]9: as actually incurred costs (actual costs); (e) for indirect costs [(excluding indirect costs covered by the unit cost under Point (f))]10: on the basis of a flat-rate of 25% of the eligible direct costs, from which are excluded the costs set out in Article 6, Point E (‘flat-rate costs’)[;][.] (f) [OPTION for specific unit costs (if unit cost foreseen by Commission decision and applicable to the grant): for [insert name of specific cost category(ies) 11 ]:on the basis of the amount(s) per unit set out in Annex 2 12 (unit costs).] [OPTION: specific cost category(ies): not applicable.] 6 To be used only if option in Point (f) is used. 7 To be used only if option in Point (f) is used. 8 To be used only if option in Point (f) is used. 9 To be used only if option in Point (f) is used. 10 To be used only if option in Point (f) is used 11 Insert precise name of the costs (as in the Commission decision authorising the use of the unit cost/lump-sum). For example: ‘access costs for providing trans-national access to research infrastructures’;, ‘costs for clinical studies’; ‘costs for energy efficiency measures in buildings’. 12 Annex 2 must clearly show, for the beneficiary (and each linked third party) concerned, all the parameters for the unit cost (i.e. the unit(s), the amount(s) per unit, the research installation/infrastructure for which it is used, the clinical study for which it is used, etc.). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 2 524 1. Reimbursement rate How much? For SME Ph2 actions, the reimbursement rate is normally set at 70 % (see General Annex D to the Main Work Programme). If provided for in the work programme/call, an SME Ph2 action may exceptionally be funded at 100%, with a GA based on the General MGA (instead of the SME Ph2 MGA). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 2 525 ARTICLE 6 — ELIGIBLE AND INELIGIBLE COSTS 1. Eligible costs — Ineligible costs The SME Ph2 MGA uses the same budget categories (covering the same types of costs) as the General MGA and the same conditions for eligibility and rules for cost calculation apply (see Article 6 H2020 General MGA). However, since SMEs are not, by definition, ‘non-profit legal entities’, they can NOT declare additional remuneration (as part of the ‘personnel costs – costs for employees (or equivalent)’; see Article 6.2.A.1 H2020 General MGA). ARTICLE 6 — ELIGIBLE AND INELIGIBLE COSTS […] 6.2 Specific conditions for costs to be eligible Costs are eligible if they comply with the general conditions (see above) and the specific conditions set out below for each of the following budget categories: A. direct personnel costs; B. direct costs of subcontracting; C. [OPTION to be used if Article 15 applies: direct costs of providing financial support to third parties;] [OPTION: not applicable;] D. other direct costs; E. indirect costs; F. [OPTION for specific unit costs: [insert name(s) of specific cost category(ies)]][OPTION: not applicable]. ‘Direct costs’ are costs that are directly linked to the action implementation and can therefore be attributed to it directly. They must not include any indirect costs (see Point E below). ‘Indirect costs’ are costs that are not directly linked to the action implementation and therefore cannot be attributed directly to it. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 2 526 ARTICLE 8 — RESOURCES TO IMPLEMENT THE ACTION – THIRD PARTIES INVOLVED IN THE ACTION 1. Appropriate own resources — Use of third party resources — Third parties involved in the action For SME Ph2 actions, the same rules on third party involvement apply as in the General MGA (see Article 8 H2020 General MGA). ARTICLE 8 — RESOURCES TO IMPLEMENT THE ACTION — THIRD PARTIES INVOLVED IN THE ACTION The beneficiaries must have the appropriate resources to implement the action. If it is necessary to implement the action, the beneficiaries may: - purchase goods, works and services (see Article 10); - use in-kind contributions provided by third parties against payment (see Article 11); - use in-kind contributions provided by third parties free of charge (see Article 12); - call upon subcontractors to implement action tasks described in Annex 1 (see Article 13); - call upon linked third parties to implement action tasks described in Annex 1 (see Article 14). In these cases, the beneficiaries retain sole responsibility towards the Agency and the other beneficiaries for implementing the action. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 2 527 ARTICLE 13 — IMPLEMENTATION OF ACTION TASKS BY SUBCONTRACTORS ARTICLE 13 — IMPLEMENTATION OF ACTION TASKS BY SUBCONTRACTORS 13.1 Rules for subcontracting action tasks 13.1.1 If necessary to implement the action, the beneficiary may award subcontracts covering the implementation of certain action tasks described in Annex 1. The beneficiary must award the subcontracts ensuring the best value for money or, if appropriate, the lowest price. In doing so, it must avoid any conflict of interests (see Article 35). [OPTION for actions involving PCP or PPI: In addition, for the pre-commercial procurement (PCP) or procurement of innovative solutions (PPI), the beneficiary must follow a transparent and non-discriminatory procedure, including at least the following: (a) an ‘open market consultation’ published in the Official Journal of the European Union via a ‘prior information notice (PIN)’ and promoted and advertised widely; (b) a ‘contract notice’ allowing for a time-limit for receipt of tenders of at least 2 months, published in the Official Journal of the European Union and promoted and advertised widely; (c) a ‘request for tenders’ based on functional or performance-based specifications (that take into account the outcome of the open market consultation) and describing the practical set-up for the implementation of the subcontract(s); (d) an objective and non-discriminatory evaluation of the tenders and award of subcontract(s); (e) a ‘contract award notice’ published in the Official Journal of the European Union. The beneficiary must also ensure that every prior information notice, contract notice or contract award notice published in relation to the subcontracting includes the following disclaimer: ‘This procurement receives funding under the European Union’s Horizon 2020 research and innovation programme under the grant agreement No [number]). The EU is however not participating as a contracting authority in this procurement.’ ] [OPTION only for actions involving PPI: Participation in PPI tendering procedures must be open on equal terms to tenderers from EU Member States, associated countries 24 and other countries with which the EU has an agreement in the field of public procurement. If the WTO Government Procurement Agreement applies, PPI subcontracts must also be open to tenderers from States that have ratified this agreement. If the procurement of the innovative solution (PPI) consists (and is limited to) buying a set of prototypes and/or test products that were developed during a preceding PCP Cofund action, the beneficiary does not need to make an open market consultation, contract notice and contract award notice under Points (a), (b) and (e) above. In this case, it must make a request for tenders from at least three providers (including the providers that participated in the preceding PCP), in accordance with the negotiated procedure without publication under Directives 2004/18/EC and 2004/17/EC 25 .] [OPTION only for actions involving PCP: Subcontracts for pre-commercial procurement must provide for the following: - the ownership, by the subcontractors, of the intellectual property rights on the results that they generate; - the right of the buyer to access results as well as the background necessary to use the results — on a royalty-free basis — for its own use; - the right of the buyer to grant (or to require the subcontractors to grant) non-exclusive licences to third parties to exploit the results — under fair and reasonable conditions — (without the right to sub-licence); H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 2 528 1. Subcontracting The rules on subcontracting for SME Ph2 actions are similar to those of the General MGA (see Articles 8 and 13 H2020 General MGA). The SME Ph2 MGA has however the following specificities: - the obligation of the subcontractors to transfer to the buyer the ownership of intellectual property generated by subcontractors during the PCP, if subcontractors fail to commercially exploit the results within the period set out in the subcontract; - the right of the buyer to publish — at the time of the contract award notice — the identity of the winning tenderers and a project summary provided by the winning tenderers, and to publish — after R&D has finished and after consulting the subcontractors — summaries of the results as well as the identities of the subcontractors that successfully completed the last phase of the PCP. The beneficiary must ensure that the majority of the research and development work done by the subcontractor(s) (including the work of the main researchers) is located in the EU Member States or associated countries (‘place of performance obligation’).] The tasks to be implemented and the estimated cost for each subcontract must be set out in Annex 1 and the total estimated costs of subcontracting per beneficiary must be set out in Annex 2. The Agency may however approve subcontracts not set out in Annex 1 and 2 without amendment according to Article 55, if: - they are specifically justified in the periodic technical report, and - they do not entail changes to the Agreement which would call into question the decision awarding the grant or breach the principle of equal treatment of applicants. [OPTION for classified results: Classified results may be subcontracted only after explicit approval (in writing) from the Agency (see Article 37).] The beneficiary must ensure that the Agency, the Commission, the European Court of Auditors (ECA) and the European Anti-Fraud Office (OLAF) can exercise their rights under Article 22 and 23 also towards its subcontractors. 13.1.2 The beneficiary must ensure that its obligations under Articles 35, 36 38 and 46 also apply to the subcontractors. 13.2 Consequences of non-compliance If the beneficiary breaches any of its obligations under Article 13.1.1, the costs related to the subcontract concerned will be ineligible (see Article 6) and will be rejected (see Article 42). If the beneficiary breaches any of its obligations under Article 13.1.2, the grant may be reduced (see Article 43). Such breaches may also lead to any of the other measures described in Chapter 6. 24 For the definition, see Article 2.1(3) of Regulation (EU) No 1290/2013 of the European Parliament and of the Council of 11 December 2013 laying down the rules for participation and dissemination in “Horizon 2020 - the Framework Programme for Research and Innovation (2014-2020)” (‘Rules for Participation Regulation No 1290/2013’) (OJ L 347, 20.12.2013 p.81): ‘associated country’ means a third country which is party to an international agreement with the Union, as identified in Article 7 of the Horizon 2020 Framework Programme Regulation No 1291/2013. Article 7 of the Horizon 2020 Framework Programme Regulation No 1291/2013 sets out the conditions for association of non-EU countries to Horizon 2020. 25 See Articles 28 and 31(2)(a) of Directive 2004/18 and Article 40(3)(b) of Directive 2004/17/EC. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 2 529 Subcontracting is NOT restricted to a limited part of the action. Moreover, the Agency will assess compliance with best value for money during the evaluation of the proposal (and therefore be able to give higher security on subcontracts that are part of the proposal). Assurance can only be given on subcontracts that are described in sufficient detail in the proposal. For already awarded subcontracts: action task(s) that are subcontracted; key information on the award procedure; name of subcontractor, price and object; explanation why the subcontractor and the price are appropriate. For future subcontracts: action task(s) to be subcontracted; estimated budget; procedure that will be followed to ensure best value for money. Annex 1 will explicitly identify the subcontracts for which assurance is given by the Agency. (For these subcontracts, beneficiaries have assurance that compliance with best value for money will not be challenged in audits — unless it turns out that the beneficiary did not follow the procedure described or concealed information for the purpose of the approval). Change to a subcontract — Subcontracts which were assessed during proposal evaluation (and for which assurance was granted) may be changed (via an amendment). Best practice: Beneficiaries should contact the Agency (via the Participant Portal messages function), if they intend to amend the grant to change a subcontract assessed during proposal evaluation. The amendment request will not be agreed, if it would result in changes that — if known before awarding the grant — would have had an impact on the award decision (see Article 55). Example (acceptable): the subcontractor went bankrupt Examples (not acceptable): the action tasks subcontracted changed; increase of price of already awarded subcontracts. The Agency will examine the change to evaluate its impact on best value for money — and will either:  grant assurance, on the basis of the justifications provided (similar to those used at the proposal stage), OR  OR refuse it (if it considers that the subcontract is not best value for money or if it cannot be assessed due to a lack of information). New subcontracts — New subcontracts (i.e. not already part of the proposal/Annex1), will be assessed by the Agency for best value for money during the amendment procedure. Finally, for SME Ph2 actions, subcontracts must provide for the right of the beneficiaries to commercially exploit the results generated by subcontractors during the subcontract implementation (by way of transfer of the intellectual property rights, licence or other; see Article 26.3). Changes to a subcontract may only be done if the assurance on best value for money is granted by the Agency. If subcontracts are added not via a formal amendment but via the ‘simplified approval procedure: there is’ NO assessment (and therefore full risk). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 2 530 ARTICLE 20 — REPORTING — PAYMENT REQUESTS 1. Reporting periods The reporting periods for SME Ph2 actions are normally the same as for the General MGA (see Article 20.2 H2020 General MGA). The reporting periods may however be adapted to reflect the action duration. Thus, if considered necessary, SME Ph2 actions may include shorter and more frequent reporting periods. ARTICLE 20 — REPORTING — PAYMENT REQUESTS 20.1 Obligation to submit reports The beneficiary must submit to the Agency (see Article 52) the technical and financial reports set out in this Article. These reports include the requests for payment and must be drawn up using the forms and templates provided in the electronic exchange system (see Article 52). 20.2 Reporting periods The action is divided into the following ‘reporting periods’: - RP1: from month 1 to month [X] - [- RP2: from month [X+1] to month [Y] - RP3: from month [Y+1] to month [Z] - [same for other RPs] - RPN: from month [N+1]to [the last month of the project].] […] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA SME Ph 2 531 ARTICLE 26 — OWNERSHIP OF RESULTS 1. Third parties with rights on results — Freedom to operate ‘Freedom to operate’ means being able to fully commercially exploit the action’s results. The beneficiaries must safeguard their freedom to operate in all agreements with employees and third parties involved in the action (see Article 8 H2020 General MGA). Example: in their agreements with subcontractors, beneficiaries must ensure their right to commercially exploit the results of work subcontracted, even if this involves using the subcontractor’s IPR background. In addition, they may have to obtain licenses to commercially exploit the results from other third parties (i.e. third parties that are not participating in the action implementation). Example: if a third party that is not involved in the action owns IPRs that may stand in the way of commercially exploiting the results, the beneficiary must obtain the license for commercial exploitation. ARTICLE 26 — OWNERSHIP OF RESULTS […] 26.3 Rights of third parties (including personnel) If third parties (including personnel) may claim rights to the results, the beneficiary must ensure that it complies with its obligations under the Agreement. If a third party generates results for a beneficiary, the beneficiary must obtain all necessary rights (transfer, licences or other) from the third party, in order to be able to respect its obligations as if those results were generated by the beneficiary itself and ensure its possibility to commercially exploit the results (‘freedom to operate’). For this purpose, it must: - in agreements with employees or third parties involved in the action (such as, for instance, subcontractors): retain the right to commercially exploit the results (at least for the forms of exploitation set out in the ‘commercialisation plan’; see Annex 1), if necessary by agreeing to a licence and - in all other cases: take measures to obtain, from the third parties, licences for the exploitation. If obtaining the rights is impossible, the beneficiary must refrain from using third parties to generate the results. […] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA ERA-NET Cofund 532 V. ERA-NET Cofund MGA V.1 Background information and approach The ERA-NET Cofund Model Grant Agreement is used for H2020 ERA-NET Cofund actions only. The ERA-NET Cofund MGA follows the H2020 General MGA for numbering and content, except for: The annotations will concentrate on differences in substance and interpretation that require explanation. Parts that do not apply or differ only in presentation (e.g. Articles 10-13, Annexes) will not be shown. By contrast, provisions that do not deviate from the General MGA, but that require clarification or a specific interpretation for ERA-NET Cofund actions are added:  Article 2 (ERA-NET Cofund actions)  Article 4.1 (ERA-NET Cofund budget categories)  Article 8 (ERA-NET Cofund rules on third party involvement). The H2020 MGA ERA-NET Cofund deviates from the General MGA as follows:  Article 3 (duration of ERA-NET Cofund actions: 60 months)  Article 5.2 (ERA-NET Cofund specific reimbursement rate and forms of costs)  Article 6.2 (ERA-NET Cofund specific conditions for eligibility of costs)  Articles 8, 10, 11, 12, 13 (reference to ‘transnational projects’ instead of ‘action’)  Article 15 (provisions for support to or implementation of trans-national projects for the co-funded call)  Article 16 (provision on access to research infrastructures not applicable)  Article 19 (ERA-NET Cofund specific deliverables)  Article 20.1 – 20.5 (ERA-NET Cofund specific reporting provisions)  Article 21.1 – 21.3, 21.5 (ERA-NET Cofund specific payment provisions)  Annex 2 Model for the estimated budget for the action  Annex 4 Model for the financial statement  Annex 7 Model for the commitment on availability of funds  Annex 8 Model for the statement on the use of the previous pre- financing instalment H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA ERA-NET Cofund 533 V.2 H2020 MGA ERA-NET Cofund: Annotations ARTICLE 2 — ACTION TO BE IMPLEMENTED [— COMPLEMENTARY GRANT] [— JOINTLY FUNDED ACTION] 1. ERA-NET Cofund actions What? ERA-NET Cofund funds:  a joint call for proposals for trans-national projects (and additional joint activities) by regional/national research and innovation programmes (— implemented or funded by the beneficiaries). ‘Funded by the beneficiaries’ means funded by providing financial support to third parties. This is normally the case if the beneficiaries are ‘research funders’ and cash contributions are received from national programmes. In this case, the beneficiaries launch a call for proposals, resulting in grants for third parties. Most ERA-NET Cofund actions are implemented in this way. ‘Implemented by the beneficiaries’ means that the beneficiaries implement the trans- national projects themselves. This is normally the case for governmental research organisations implementing a research programme based on institutional funding (i.e. not project-based funding). In this case, the co-funded call for proposals is based on in-kind contributions from their institutional funding and the beneficiaries then carry out the selected trans-national projects themselves, either fully or partially. Only one funded call per GA. and  optional: additional activities related to the coordination of national/regional research and innovation programmes. The additional activities must relate to the coordination of public research and innovation programmes and should focus on preparing and implementing joint activities (including ARTICLE 2 — ACTION TO BE IMPLEMENTED [— COMPLEMENTARY GRANT] [— JOINTLY FUNDED ACTION] The grant is awarded for the action entitled [insert title of the action] — [insert acronym] (‘action’), as described in Annex 1. [OPTION for complementary grants if foreseen in the work programme: The grant is a ‘complementary grant’ to [the grant agreement(s) under the call(s) for proposals [call identifier(s): H2020 — theme —]] [the following complementary grant agreement(s) No(s): - [insert number] [insert acronym] - [insert number] [insert acronym]].] [OPTION for joint actions (joint call with a third country or an international organisation): The action is a ‘jointly funded action’ which must be coordinated with the ‘joint action’ called [insert the name of the third country or international organisation action], as described in Annex 1.] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA ERA-NET Cofund 534 other joint calls without EU co-funding; see General Annex D to the Main Work Programme). These activities must be in addition to implementing a joint call. If the additional activities consist in additional calls without top-up funding from the EU, the requirements set out in Article 15 do NOT apply. Normally, ERA-NET Cofund grants are multi-beneficiary grants; exceptionally they can be mono- beneficiary grants for sole participants (see General Annex D to the Main Work Programme). ERA-NET Cofund actions are funded in all Parts of the Horizon 2020 Framework Programme (e.g. H2020-NMP-ERA-NET-2015). For more information on ERA-NET Cofund actions, see the Online Manual and the H2020 grants fact sheets on the Participant Portal. For more information on the conditions for participation and funding, see the Online Manual or the General Annexes to the Main Work Programme and the call and topics pages of the call. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA ERA-NET Cofund 535 ARTICLE 3 — DURATION AND STARTING DATE OF THE ACTION 1. Action duration For ERA-NET Cofund actions, the action duration is usually 60 months. (This relatively long time is needed because these actions include call preparation, launch of the call, proposal submission and evaluation, the selection decision, and implementation of the selected transnational projects — which typically takes 36 months.) If implementation of the action is justifiably delayed, the consortium may request an extension (i.e. request an amendment extending the duration; see Article 55). Normally, the action’s duration can NOT however exceed 72 months. ARTICLE 3 — DURATION AND STARTING DATE OF THE ACTION The duration of the action will be 60 months as of [OPTION by default: the first day of the month following the date the Agreement enters into force (see Article 58)] [OPTION if needed for the action: [insert date]] 7 (‘starting date of the action’). 4 This date must be the first day of a month and it must be later than the date of entry into force of the agreement, unless authorised otherwise by the authorising officer, if the applicant can demonstrate the need to start the action before the entry into force of the grant agreement, or the need to start the action on another day than the first day of the month. In any case, the starting date should not be earlier than the date of the submission of the grant application (Article 130 FR). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA ERA-NET Cofund 536 ARTICLE 4 — ESTIMATED BUDGET AND BUDGET TRANSFERS 1. Budget categories The ERA-NET Cofund MGA uses its own budget categories. Budget categories of the ERA-NET Cofund MGA:  direct costs related to trans-national projects  direct costs of providing financial support to third parties implementing trans-national projects  direct costs for the implementation of trans-national projects by the beneficiaries:  direct personnel costs for the implementation of trans-national projects by the beneficiaries  costs for employees (or equivalent)  costs for natural persons working under a direct contract  costs of personnel seconded by a third party against payment  direct costs of subcontracting for the implementation of trans-national projects by the beneficiaries  other direct costs for the implementation of trans-national projects by the beneficiaries  travel costs and related subsistence allowances  equipment costs  costs of other goods and services  capitalised and operating costs of large research infrastructure  direct coordination costs for additional activities  indirect costs Thus, the ERA-NET Cofund MGA does NOT have:  personnel costs for SME owners without salary  personnel costs for beneficiaries that are natural persons without salary  personnel costs for providing trans-national or virtual access to research infrastructure  specific cost categories. ARTICLE 4 — ESTIMATED BUDGET AND BUDGET TRANSFERS 4.1 Estimated budget The ‘estimated budget’ for the action is set out in Annex 2. It contains the estimated eligible costs and the forms of costs, broken down by beneficiary [(and linked third party)] and budget category (see Articles 5, 6, [and 14]). [OPTION to be used if Article 9 applies: It also contains the estimated costs of the beneficiaries not receiving EU funding (see Article 9).] […] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA ERA-NET Cofund 537 The budget categories are relevant for the estimated budget (Article 4 and Annex 2), forms of costs (Article 5), cost eligibility rules (Article 6.2) and the cost declarations (i.e. financial statements; Article 20 and Annex 4). . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA ERA-NET Cofund 538 ARTICLE 5 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATE AND FORMS OF COSTS 1. Maximum grant amount — Estimated eligible costs The maximum grant amount and the estimated eligible costs are fixed in Article 5 at grant signature. At the end of reporting period 1, the beneficiaries must however make an amendment, to adjust the initial budget (i.e. Annex 2, estimated eligible and, if needed, maximum grant amount) down to the amount justified by the selection list and the commitments to fund. ARTICLE 5 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATE AND FORM OF COSTS 5.1 Maximum grant amount The ‘maximum grant amount’ is EUR [insert amount (insert amount in words)]. 5.2 Form of grant, reimbursement rate and forms of costs The grant reimburses […%] of the action’s eligible costs (see Article 6) (‘reimbursement of eligible costs grant’) (see in Annex 2). The estimated eligible costs of the action are EUR [insert amount (insert amount in words)]. Eligible costs (see Article 6) must be declared under the following forms (‘forms of costs’): (a) for costs of providing financial support to third parties implementing trans-national projects: as actually incurred costs (‘actual costs’); (b) for direct personnel costs for the implementation of trans-national projects by the beneficiaries: - as actually incurred costs (actual costs) or - on the basis of an amount per unit calculated by the beneficiary in accordance with its usual cost accounting practices (‘unit costs’). (c) for direct costs of subcontracting for the implementation of trans-national projects by the beneficiaries: as actually incurred costs (actual costs); (d) for other direct costs for the implementation of trans-national projects by the beneficiaries: as actually incurred costs (actual costs); (e) for direct coordination costs for additional activities: on the basis of the amount per unit set out in Annex 2 (unit costs); (f) for indirect costs: on the basis of a flat-rate applied as set out in Point C of Article 6.2 (‘flat-rate costs’). […] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA ERA-NET Cofund 539 2. Reimbursement rate How much? For ERA-NET Cofund actions, the reimbursement rate is currently set at 33 % (see General Annex D to the Main Work Programme). 3. Cost forms The ERA-NET Cofund MGA, uses the same cost forms as the General MGA (i.e. actual costs, unit costs and flat rate costs; see Article 5 H2020 General MGA). Cost forms of the ERA-NET Cofund MGA:  actual costs for:  direct costs of providing financial support  direct personnel costs for implementing the trans-national projects (— unless declared as unit cost)  subcontracting costs for implementing the trans-national projects  other direct costs for implementing the trans-national projects  unit costs for:  direct personnel costs calculated by the beneficiaries in accordance with their usual cost accounting practices (‘average personnel costs’)  direct coordination costs for additional activities120  flat-rate costs for:  indirect costs. 120 Commission Decision C(2013) 8200 of 10 December 2013 authorising the use of reimbursement on the basis of unit costs for ERA-NET Cofund actions under the Horizon 2020 Framework Programme. Available at: http://ec.europa.eu/research/participants/data/ref/h2020/other/legal/unit_costs/unit-costs_era- net_cofund_en.pdf. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA ERA-NET Cofund 540 ARTICLE 6 — ELIGIBLE AND INELIGIBLE COSTS 1. Specific conditions for costs to be eligible Article 6.2 refers to specific eligibility conditions applicable per budget category. The ERA-NET Cofund MGA has its own budget categories. Some of them cover however the same types of costs as the General MGA, with the same conditions for eligibility and rules for cost calculation (see Article 6 H2020 General MGA). For ease of reference, the annotations for Article 6.2 will summarise — for each budget category — the information necessary to establish the eligible costs, i.e. 1. types of costs covered by the budget category 2. cost form under which the costs must be declared (i.e. actual costs, unit costs, flat rate) 3. conditions for eligibility 4. how the costs must be calculated. ARTICLE 6 — ELIGIBLE AND INELIGIBLE COSTS […] 6.2 Specific conditions for costs to be eligible Costs are eligible if they comply with the general conditions (see above) and the specific conditions set out below for each of the following budget categories: A. direct costs related to trans-national projects; B. direct coordination costs for additional activities; C. indirect costs. ‘Direct costs’ are costs that are directly linked to the action implementation and can therefore be attributed to it directly. They must not include any indirect costs (see Point C below). ‘Indirect costs’ are costs that are not directly linked to the action implementation and therefore cannot be attributed directly to it. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA ERA-NET Cofund 541 A. Direct costs related to trans-national projects A.1 Direct costs of providing financial support to third parties implementing trans-national projects are eligible if the conditions set out in Article 15.1.1 are met. A.2 Direct costs for the implementation of trans-national projects by the beneficiaries are eligible, if they comply with the conditions set out in Article 15.1.1 and the following: A.2.1 Direct personnel costs for the implementation of trans-national projects by the beneficiaries Types of eligible personnel costs A.2.1.1 Personnel costs are eligible, if they are related to personnel working for the beneficiary under an employment contract (or equivalent appointing act) and assigned to the implementation of trans-national projects (‘costs for employees (or equivalent)’). They must be limited to salaries (including during parental leave), social security contributions, taxes and other costs included in the remuneration, if they arise from national law or the employment contract (or equivalent appointing act). Beneficiaries that are non-profit legal entities 8 may also declare as personnel costs additional remuneration for personnel assigned to the implementation of trans-national projects (including payments on the basis of supplementary contracts regardless of their nature), if: (a) it is part of the beneficiary’s usual remuneration practices and is paid in a consistent manner whenever the same kind of work or expertise is required; (b) the criteria used to calculate the supplementary payments are objective and generally applied by the beneficiary, regardless of the source of funding used. Additional remuneration for personnel assigned to the implementation of trans-national projects is eligible up to the following amount: (a) if the person works full time and exclusively on the implementation of trans-national projects during the full year: up to EUR 8 000; (b) if the person works exclusively on the implementation of trans-national projects but not full-time or not for the full year: up to the corresponding pro-rata amount of EUR 8 000, or (c) if the person does not work exclusively on the implementation of trans-national projects: up to a pro-rata amount calculated as follows: {{EUR 8 000 divided by the number of annual productive hours (see below)}, multiplied by the number of hours that the person has worked on the trans-national projects during the year}. A.2.1.2 The costs for natural persons working under a direct contract with the beneficiary other than an employment contract are eligible personnel costs, if: (a) the person works under the beneficiary’s instructions and, unless otherwise agreed with the beneficiary, on the beneficiary’s premises; (b) the result of the work carried out belongs to the beneficiary, and (c) the costs are not significantly different from those for personnel performing similar tasks under an employment contract with the beneficiary. A.2.1.3 The costs of personnel seconded by a third party against payment are eligible personnel costs if the conditions in Article 11.1 are met. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA ERA-NET Cofund 542 Calculation Personnel costs must be calculated by the beneficiaries as follows: {{hourly rate multiplied by number of actual hours worked on the implementation of trans-national projects}, plus for non-profit legal entities: additional remuneration to personnel assigned to the implementation of trans-national projects under the conditions set out above (Point A.2.1.1)}. The number of actual hours declared for a person must be identifiable and verifiable (see Article 18). The total number of hours declared in EU or Euratom grants, for a person for a year, cannot be higher than the annual productive hours used for the calculations of the hourly rate. Therefore, the maximum number of hours that can be declared for the grant are: {number of annual productive hours for the year (see below) minus total number of hours declared by the beneficiary, for that person for that year, for other EU or Euratom grants}. The ‘hourly rate’ is one of the following: (a) for personnel costs declared as actual costs: the hourly rate is the amount calculated as follows: {actual annual personnel costs (excluding additional remuneration) for the person divided by number of annual productive hours}. The beneficiaries must use the annual personnel costs and the number of annual productive hours for each financial year covered by the reporting period concerned. If a financial year is not closed at the end of the reporting period, the beneficiaries must use the hourly rate of the last closed financial year available. For the ‘number of annual productive hours’, the beneficiaries may choose one of the following: (i) 'fixed number of hours': 1 720 hours for persons working full time (or corresponding pro- rata for persons not working full time); (ii) 'individual annual productive hours': the total number of hours worked by the person in the year for the beneficiary, calculated as follows: {annual workable hours of the person (according to the employment contract, applicable collective labour agreement or national law) plus overtime worked minus absences (such as sick leave and special leave)}. ‘Annual workable hours’ means the period during which the personnel must be working, at the employer’s disposal and carrying out his/her activity or duties under the employment contract, applicable collective labour agreement or national working time legislation. If the contract (or applicable collective labour agreement or national working time legislation) does not allow to determine the annual workable hours, this option cannot be used. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA ERA-NET Cofund 543 (iii) ‘standard annual productive hours’: the standard number of annual hours generally applied by the beneficiary for its personnel in accordance with its usual cost accounting practices. This number must be at least 90 % of the ‘standard annual workable hours’. If there is no applicable reference for the standard annual workable hours, this option cannot be used. For all options, the actual time spent on parental leave by a person assigned to the implementation of trans-national projects may be deducted from the number of annual productive hours; (b) for personnel costs declared on the basis of unit costs calculated in accordance with the beneficiary’s usual cost accounting practices: the hourly rate calculated by the beneficiary in accordance with its usual cost accounting practices, if: - the cost accounting practices used are applied in a consistent manner, based on objective criteria, regardless of the source of funding; - the hourly rate is calculated using the actual personnel costs recorded in the beneficiary’s accounts, excluding any ineligible cost or costs included in other budget categories; The actual personnel costs may be adjusted by the beneficiary on the basis of budgeted or estimated elements. Those elements must be relevant for calculating the personnel costs, reasonable and correspond to objective and verifiable information, and - the hourly rate is calculated using the number of annual productive hours (see above). A.2.2 Direct costs of subcontracting for the implementation of trans-national projects by the beneficiaries (including related duties, taxes and charges such as non-deductible value added tax (VAT) paid by the beneficiary) are eligible if the conditions in Article 13.1.1 are met. A.2.3 Other direct costs for the implementation of trans-national projects by the beneficiaries A.2.3.1 Travel costs and related subsistence allowances (including related duties, taxes and charges such as non-deductible value added tax (VAT) paid by the beneficiary) are eligible if they are in line with the beneficiary’s usual practices on travel. A.2.3.2 The depreciation costs of equipment, infrastructure or other assets (new or second-hand) as recorded in the beneficiary’s accounts are eligible, if they were purchased in accordance with Article 10.1.1 and written off in accordance with international accounting standards and the beneficiary’s usual accounting practices. The costs of renting or leasing equipment, infrastructure or other assets (including related duties, taxes and charges such as non-deductible value added tax (VAT) paid by the beneficiary) are also eligible, if they do not exceed the depreciation costs of similar equipment, infrastructure or assets and do not include any financing fees. The costs of equipment, infrastructure or other assets contributed in-kind against payment are eligible, if they do not exceed the depreciation costs of similar equipment, infrastructure or assets, do not include any financing fees and if the conditions in Article 11.1 are met. The only portion of the costs that will be taken into account is that which corresponds to the duration of the trans-national projects implemented by the beneficiary and rate of actual use for the purposes of the transnational projects implemented by the beneficiary. A.2.3.3 Costs of other goods and services (including related duties, taxes and charges such as non- deductible value added tax (VAT) paid by the beneficiary) are eligible, if they are: (a) purchased specifically for the trans-national projects implemented by the beneficiary and in accordance with Article 10.1 or (b) contributed in kind against payment and in accordance with Article 11.1. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA ERA-NET Cofund 544 1. Direct costs related to trans-national projects: Types of costs — Cost form — Conditions for eligibility — Cost calculation 1.1 The beneficiaries may declare the following types of costs as ‘direct costs related to trans- national projects’:  direct costs of providing financial support to third parties implementing trans-national projects  direct costs for the implementation of trans-national projects by the beneficiaries:  direct personnel costs for the implementation of trans-national projects by the beneficiaries:  basic remuneration (basic salary and complements) Such goods and services include, for instance, consumables and supplies, dissemination (including open access), protection of results, certificates on the financial statements (if they are required by the Agreement), certificates on the methodology, translations and publications. A.2.3.4 Capitalised and operating costs of ‘large research infrastructure’ 9 [OPTION by default: directly used for the trans-national projects implemented by the beneficiary are eligible, if: (a) the value of the large research infrastructure represents at least 75 % of the total fixed assets (at historical value in its last closed balance sheet before the date of the signature of the Agreement or as determined on the basis of the rental and leasing costs of the research infrastructure 7 ); (b) the beneficiary’s methodology for declaring the costs for large research infrastructure has been positively assessed by the Commission (‘ex-ante assessment’); (c) the beneficiary declares as direct eligible costs only the portion which corresponds to the duration of the trans-national projects implemented by the beneficiary and the rate of actual use for the purposes of the trans-national projects implemented by the beneficiary, and (d) they comply with the conditions as further detailed in the annotations to the Horizon 2020 Grant Agreements.] [OPTION to be used if foreseen in the work programme: Not applicable.] 8 For the definition, see Article 2.1(14) of Regulation (EU) No 1290/2013 of the European Parliament and of the Council of 11 December 2013 laying down the rules for the participation and dissemination in "Horizon 2020 – the Framework Programme for Research and Innovation (2014-2020)" ('Rules for Participation Regulation No 1290/2013') (OJ L 347, 20.1.2013 p.81): ‘non-profit legal entity’ means a legal entity which by its legal form is non-profit-making or which has a legal or statutory obligation not to distribute profits to its shareholders or individual members. 9 ‘Large research infrastructure’ means research infrastructure of a total value of at least EUR 20 million, for a beneficiary, calculated as the sum of historical asset values of each individual research infrastructure of that beneficiary, as they appear in its last closed balance sheet before the date of the signature of the Agreement or as determined on the basis of the rental and leasing costs of the research infrastructure. 10 For the definition see Article 2(6) of Rules for Participation: ‘Research infrastructure’ are facilities, resources and services that are used by the research communities to conduct research and foster innovation in their fields. Where relevant, they may be used beyond research, e.g. for education or public services. They include: major scientific equipment (or sets of instruments); knowledge-based resources such as collections, archives or scientific data; e-infrastructures such as data and computing systems and communication networks; and any other infrastructure of a unique nature essential to achieve excellence in research and innovation. Such infrastructures may be ‘single-sited’, ‘virtual’ or ‘distributed’ H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA ERA-NET Cofund 545  for non-profit legal entities: additional remuneration (‘bonus payments’)  costs for natural persons working under a direct contract  costs of personnel seconded by a third party against payment  direct costs of subcontracting for the implementation of trans-national projects by the beneficiaries  other direct costs for the implementation of trans-national projects by the beneficiaries:  travel and related subsistence allowances  equipment  other goods and services  costs of large research infrastructure. What? These budget categories cover costs for the implementation of trans-national projects. What not? They do not cover the costs for organising the calls (i.e. preparation of the call, selection of the projects etc). Such costs are NOT eligible under the ERA-NET grant. 1.2 All costs — except direct personnel costs — must be declared as actual costs (see Article 5.2(b)). Direct personnel costs may be declared as unit cost in accordance with the usual cost accounting practices (i.e. ‘average personnel costs’). 1.3 In principle, the same conditions for eligibility apply as in the General MGA (see Article 6 H2020 General MGA). The ERA-NET Cofund MGA has however the following specificities: In some Articles, the conditions in the General MGA must be read as referring to ‘trans-national projects’ (instead of ‘action’). Moreover, there are additional cost eligibility conditions in Article 15 for financial support to third parties (e.g. selection procedure, compliance with national funding rules). Finally, costs for financial support to third parties are usually eligible only AFTER the trans-national projects have ended. 1.4 The same rules for cost calculation apply as in the General MGA (see Article 6 H2020 General MGA). The beneficiaries must use their own funds for such activities. . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA ERA-NET Cofund 546 1. Direct coordination costs of additional activities: Types of costs — Cost form — Conditions for eligibility — Cost calculation 1.1 What? This budget category covers the costs for additional activities related to the coordination of national/regional research and innovation programmes (see also Article 2). 1.2 The costs must be declared on the basis of the unit cost fixed by Commission Decision C(2013) 8200121 and indicated in Annex 2 of the GA (currently EUR 29 000 per beneficiary per year). In practice, the declaration of costs for additional activities is very simple and almost completely automatized: The beneficiary must only indicate the number of years (during which such activities were implemented) and the costs are then automatically calculated by the IT system. 1.3 The costs must fulfil the following conditions for eligibility:  fulfil the general conditions for unit costs to be eligible (i.e. units used during the action duration, necessary, linked to the action, etc.; see Article 6.1(b))  be declared for the additional activities described in Annex 1. Coordination costs for additional activities are limited to the beneficiaries that carry out such activities. Beneficiaries that implement trans-national projects can NOT declare coordination costs for additional activities. 1.4 They are calculated (automatically by the IT system) as follows: amount per unit (EUR 29 000) x number of years in which additional activities were carried out According to General Annex D to the Main Work Programme, the EU funding for coordination costs should not exceed 20 % of the maximum grant amount set out in Article 5.1. 121 Commission Decision C(2013) 8200 of 10 December 2013 authorising the use of reimbursement on the basis of unit costs for ERA-NET Cofund actions under the Horizon 2020 Framework Programme. Available at http://ec.europa.eu/research/participants/data/ref/h2020/other/legal/unit_costs/unit-costs_era- net_cofund_en.pdf. If the additional activities are not properly implemented as described in Annex 1, the grant may be reduced (see Articles 7 and 43). Example: Beneficiaries make only two meetings on general strategy. . B. Direct coordination costs for additional activities are eligible if they correspond to the amount per unit set out in Annex 2 multiplied by the number of actual years in which the beneficiary has carried out the ‘additional activities’ described in Annex 1. Beneficiaries that implement transnational projects (partially or fully) themselves cannot declare direct coordination costs for additional activities. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA ERA-NET Cofund 547 1. Indirect costs: Types of costs — Cost form — Conditions for eligibility — Cost calculation For this budget category, in principle the same rules apply as in the General MGA (see Article 6 H2020 General MGA). The flat-rate is however calculated on the following eligible direct costs:  direct costs for the implementation of trans-national projects by the beneficiaries  direct coordination costs for additional activities. ‘Direct costs of providing financial support to third parties implementing trans-national projects’ are NOT included. C. Indirect costs Indirect costs are eligible if they are declared on the basis of the flat-rate of 25 % of the eligible direct costs (see Article 5.2 and Points A and B above), from which are excluded: (a) costs of subcontracting for the implementation of trans-national projects by the beneficiaries; (b) costs of in-kind contributions provided by third parties which are not used on the beneficiary’s premises and (c) costs of financial support to third parties implementing trans-national projects. Beneficiaries receiving an operating grant 11 financed by the EU or Euratom budget cannot declare indirect costs for the period covered by the operating grant. […] 11 For the definition, see Article 121(1)(b) of the Financial Regulation: ‘operating grant’ means direct financial contribution, by way of donation, from the budget in order to finance the functioning of a body which pursues an aim of general EU interest or has an objective forming part of and supporting an EU policy. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA ERA-NET Cofund 548 ARTICLE 8 — RESOURCES TO IMPLEMENT THE ACTION — THIRD PARTIES INVOLVED IN THE ACTION 1. Appropriate own resources — Use of third party resources — Third parties involved in the action For ERA-NET Cofund actions, generally the same rules on third party involvement apply as in the General MGA (see Article 8 H2020 General MGA). Use of third party resources (i.e. purchasing of goods, works or services (Article 10), in-kind contributions (Articles 11 and 12) or subcontractors (Article 13)) is however ONLY allowed for beneficiaries that implement trans-national projects. Linked third parties may participate in all activities under the action. ARTICLE 8 — RESOURCES TO IMPLEMENT THE ACTION — THIRD PARTIES INVOLVED IN THE ACTION The beneficiaries must have the appropriate resources to implement the action. If it is necessary for the implementation of the trans-national projects by the beneficiaries, they may: - purchase goods, works and services (see Article 10); - use in-kind contributions provided by third parties against payment (see Article 11); - use in-kind contributions provided by third parties free of charge (see Article 12); - call upon subcontractors to implement action tasks described in Annex 1 (see Article 13); - call upon linked third parties to implement action tasks described in Annex 1 (see Article 14). In these cases, the beneficiaries retain sole responsibility towards the [Commission][Agency] and the other beneficiaries for implementing the action. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA ERA-NET Cofund 549 ARTICLE 15 — SUPPORT TO OR IMPLEMENTATION OF TRANS-NATIONAL PROJECTS ARTICLE 15 — SUPPORT TO OR IMPLEMENTATION OF TRANS-NATIONAL PROJECTS 15.1 Rules for providing support to or implementation of trans-national projects 15.1.1 The beneficiaries must provide financial support to trans-national projects or implement such projects (partially or fully) themselves, in accordance with the following conditions: (a) types of activity that qualify for financial support and persons or categories of persons that may receive financial support: The projects must be trans-national projects, involving at least two independent entities from two different EU Member States or associated countries; (b) selection procedure and criteria: The projects must be selected following a single joint transnational call for proposals. The beneficiaries must make the selection through a two-step procedure: - Step 1: review at national or trans-national level - Step 2: single international peer review. Only entities that are eligible for funding under the national programmes involved in the joint call may be invited to Step 2. In Step 2, the beneficiaries must evaluate proposals with the assistance of at least three independent experts, on the basis of the following award criteria: (a) excellence; (b) impact; (c) quality and efficiency of the implementation. Proposals must be ranked according to the evaluation results. The selection must be made on the basis of this ranking. The selection procedure must be followed by an independent expert observer, who must make a report (see Article 20.3); (c) other conditions: In the case of support to entities that are third parties, the beneficiaries must ensure that [the Agency,] the Commission, the European Court of Auditors (ECA) and the European Anti-Fraud Office (OLAF) can exercise their rights under Article 22 and 23 also towards the third parties receiving financial support. Financial support to entities that are third parties must comply with national funding rules. The maximum amount of financial support to a third party and the criteria for determining the exact amount under national funding rules are set out in Annex 1. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA ERA-NET Cofund 550 1. Providing financial support — Implementing trans-national projects For ERA-NET Cofund actions, the beneficiaries may provide financial support to third parties (i.e pass on the EU support they receive via the ERA-NET Cofund grant to recipients that are not party to the GA, also called ‘cascade funding’). In this case, the beneficiaries’ activity consists in providing financial support, while it is the recipients that actually implement the trans-national research and/or innovation projects. The beneficiaries may however also choose to implement the projects themselves. 2. Additional eligibility condition: Two-step selection procedure The beneficiaries must select the trans-national projects according to a two-step procedure, ensuring that:  only entities that are eligible for funding under the national funding rules are invited to Step 2 and  consortia can balance the requested funding and available funding per participating EU Member State and H2020 associated country between Steps 1 and 2. 3. Additional eligibility condition: Independent experts — Observer In addition to expert evaluators, the beneficiaries must appoint an independent expert as an observer to verify that the selection procedure (and, in particular, the peer review evaluation and the ranking) meets the requirements of Article 15. Article 15 contains both additional cost eligibility conditions (in Article 15.1.1) and ‘other obligations’ (in Article 15.1.2). . 15.1.2 In addition, the beneficiaries must: - publish a joint call on a dedicated webpage and promote it at national/regional level via their usual channels of communications to potential proposers; - keep the joint call open for at least 60 days; - take all lawful steps to ensure confidentiality of information and documents obtained during the evaluation and selection procedures of the joint call. 15.2 Consequences of non-compliance If a beneficiary breaches its obligations under Article 15.1.1, the costs of the beneficiary for its financial support to the trans-national projects or for the implementation of its trans-national projects will be ineligible (see Article 6) and will be rejected (see Article 42). If the beneficiary breaches its obligations under Article 15.1.2, the grant may be reduced (see Article 43). Such breaches may also lead to any of the other measures described in Chapter 6. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA ERA-NET Cofund 551 The observer’s report must be submitted by the coordinator, as part of the periodic report (see Article 20.3). 4. Additional eligibility condition: Ranking list(s) — Joint selection list The beneficiaries must base their selection (‘joint selection list’) on the order of the ranking list (or the ranking lists, if there are different topics). If proposals have identical scores, the proposals coming from participating EU Member States or H2020 associated countries with still available funding can be given precedence, in order to maximise the number of selected projects. The ranking list(s) and the joint selection list must be submitted by the coordinator, as part of the periodic report (see Article 20.3). 5. Additional eligibility condition: Compliance with national funding rules If the beneficiaries provide financial support to third parties, the support must comply with the applicable national funding rules. The trans-national projects must have been implemented (by the recipients) in compliance with those rules. Moreover, the beneficiaries must ensure that costs are checked and that their payments are made in compliance with those rules (and certify this; see Article 20.4). 6. Additional eligibility condition: Conditions for support set out in Annex 1 — Maximum amount of financial support If the beneficiaries provide financial support to third parties, the beneficiaries may not exceed the maximum amount of financial support set out in Annex 1 and must apply the criteria set out in Annex 1 for fixing the exact amount of funding. This information must already be part of the proposal (see the proposal templates). For both, the beneficiaries should rely on the applicable national funding rules. If the national rules do not specify a maximum amount, they must enter the amount of their part of the call budget. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA ERA-NET Cofund 552 ARTICLE 19 — SUBMISSION OF DELIVERABLES 1. Deliverables: Information on each selected project — Information on each implemented project When & What? For ERA-NET Cofund actions, the coordinator must — once the trans-national projects have been selected — submit to the Commission/Agency a list of all the projects with certain information. Example: data on each participant and abstracts of the proposals. The beneficiaries will be contacted about the format to be used and details on how to submit the deliverables. ARTICLE 19 — SUBMISSION OF DELIVERABLES 19.1 Obligation to submit deliverables The coordinator must submit: - at least 30 days before the expected date of publication of the joint call: information on the call and its content; - at the end of the selection: information on each selected project (including data on each participant and abstracts of the project proposal, in a format specified by the [Commission][Agency]), for publication and evaluation purposes; - [OPTION by default (two pre-financing payments): in month 36 a ‘progress report’ containing: - an explanation of the work carried out by the beneficiaries; - an overview of the progress towards the objectives of the action, including milestones and other deliverables identified in Annex 1. This report must include explanations justifying the differences between work expected to be carried out in accordance with Annex 1 and that actually carried out; - a summary for publication by the [Commission][Agency];] [OPTION in case of three pre-financing payments: not applicable;] - at the end of the action: information on each implemented project (including data on each participant and overview of the results, in a format specified by the [Commission][Agency]), for publication and evaluation purposes, and - any other deliverables identified in Annex 1, in accordance with the timing and conditions set out in it. 19.2 Consequences of non-compliance If the coordinator breaches any of its obligations under this Article, the [Commission][Agency] may apply any of the measures described in Chapter 6. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA ERA-NET Cofund 553 This information must be updated by the coordinator at the end of the action, by submitting a list of all implemented projects, together with certain information. Example: data on each participant and an overview of the results. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA ERA-NET Cofund 554 ARTICLE 20 — REPORTING — PAYMENT REQUESTS ARTICLE 20 — REPORTING — PAYMENT REQUESTS 20.1 Obligation to submit reports The coordinator must submit to the [Commission][Agency] (see Article 52) the reports set out in this Article. These reports include the requests for payments and must be drawn up using the forms and templates provided in the electronic exchange system (see Article 52). 20.2 Reporting periods [OPTION by default (two pre-financing payments): The action is divided into the following ‘reporting periods’: - RP1: from month 1 to month [X19] - RP2: from month [X+1] to [the last month of the project]] [OPTION in case of three pre-financing payments: The action is divided into the following ‘reporting periods’: - RP1: from month 1 to month [X20] - RP2: from month [X+1] to month [36] - RP3: from month [37] to [the last month of the project]] 20.3 Periodic reports — Requests for second [and third] pre-financing payment[s] The coordinator must submit a periodic report within 60 days following the end of the first reporting period. The periodic report must include the following: (a) a periodic technical report containing: (i) an explanation of the work carried out by the beneficiaries; (ii) an overview of the progress towards the objectives of the action, including milestones and other deliverables identified in Annex 1. This report must include explanations justifying the differences between work expected to be carried out in accordance with Annex 1 and that actually carried out. The report must also detail the exploitation and dissemination of the results and — if required in Annex 1 — an updated ‘plan for the exploitation and dissemination of the results’; (iii) a summary for publication by the [Commission][Agency]; (iv) the answers to the ‘questionnaire’ covering issues related to the action implementation and the economic and societal impact, notably in the context of the Horizon 2020 key performance indicators and the Horizon 2020 monitoring requirements. (b) the ranking list(s) of the projects; (c) the observers’ report on the evaluation; (d) the joint selection list of the projects to be funded; (e) from each beneficiary participating in the joint call, a formal and duly signed ‘commitment on availability of funds’ (see Annex 7), and (f) a ‘statement on the use of the first pre-financing instalment’ (see Annex 8), including the request for a second pre-financing payment. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA ERA-NET Cofund 555 The coordinator must certify that the information provided is full, reliable and true and that it can be substantiated by adequate supporting documentation that will be produced upon request or in the context of checks, reviews, audits and investigations (see Articles 17, 18 and 22). [OPTION in case of three pre-financing payments: The coordinator must submit a periodic report within 60 days following the end of the second reporting period. The periodic report must include the following: (a) a periodic technical report (see point (a) above) and (b) a statement on the use of the second pre-financing instalment (see Annex 8), including the request for a third pre-financing payment. The coordinator must certify that the information provided is full, reliable and true and that it can be substantiated by adequate supporting documentation that will be produced upon request or in the context of checks, reviews, audits and investigations (see Articles 17, 18 and 22). ] 20.4 Final report — Request for payment of the balance The coordinator must submit the final report within 60 days following the end of the last reporting period. The final report must include the following: (a) a ‘final technical report’ with a summary for publication containing: (i) an overview of the results and their exploitation and dissemination; (ii) the conclusions on the action, and (iii) the socio-economic impact of the action; (b) a ‘final financial report’ containing: (i) an ‘individual financial statement’ (see Annex 4) from each beneficiary [and from each linked third party], for all reporting periods. The individual financial statement must detail the eligible costs (actual costs, unit costs and flat-rate costs; see Article 6) for each budget category (see Annex 2). The beneficiaries [and linked third parties] must declare all eligible costs, even if — for actual costs, unit costs and flat-rate costs — they exceed the amounts indicated in the estimated budget (see Annex 2). Amounts which are not declared in the individual financial statement will not be taken into account by the [Commission][Agency]. The individual financial statements must also detail the receipts of the action (see Article 5.3.3). Each beneficiary [and each linked third party] must certify that: - the information provided is full, reliable and true; - the costs declared are eligible (in particular, in case of financial support to third parties, that it has been paid in compliance with the applicable national funding rules; see Article 15); H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA ERA-NET Cofund 556 1. Reports When & What? For ERA-NET Cofund actions, the coordinator has to submit — after the first reporting period (and, if there are three pre-financing payments, also after the second reporting period) — a periodic technical report, with information on the technical implementation. NO financial reporting is needed during the action (i.e. no financial statements before the final report). The coordinator only has to sign and submit a 'statement on the use of the previous pre-financing instalment' (which includes also the request for further pre-financing payments; see Annex 7). List of documents for the periodic report(s):  explanation of the work carried out  overview of the progress  summary for publication  questionnaire (i.e. the structured information requested) - the costs can be substantiated by adequate records and supporting documentation (see Article 18) that will be produced upon request (see Article 17) or in the context of checks, reviews, audits and investigations (see Article 22), and - all the receipts have been declared (see Article 5.3.3); (ii) an explanation of the use of resources and the information on subcontracting (see Article 13) and in-kind contributions provided by third parties (see Articles 11 and 12) from each beneficiary [and from each linked third party]; (iii) [OPTION if the JRC is a beneficiary: information on the amount of payment of the balance to be paid by the [Commission][Agency] to the Joint Research Centre (JRC);][OPTION: not applicable;] (iv) a ‘summary financial statement’ (see Annex 4), created automatically by the electronic exchange system, consolidating the individual financial statements and including the request for payment of the balance; (v) a ‘certificate on the financial statements’ (drawn up in accordance with Annex 5) for each beneficiary [and for each linked third party], if it requests a total contribution of EUR 325 000 or more, as reimbursement of actual costs and unit costs calculated on the basis of its usual cost accounting practices (see Article 5.2 and Point A.2.1 of Article 6.2). 20.5 Information on cumulative expenditure incurred In addition to the reporting requirements set out above (Article 20.1 to 20.3), the coordinator must inform the [Commission][Agency] by [31 December][30 November] each year of the cumulative expenditure incurred by the beneficiaries from the start date of the action. This information is required for the Commission’s accounting purposes and will not be used to calculate the final grant amount. […] 19 Month X should be the expected end of the selection procedure referred to in Article 15.1.1. 20 Month X should be the expected end of the selection procedure referred to in Article 15.1.1. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA ERA-NET Cofund 557  ranking list of the projects  observers' report on the evaluation  joint selection list  'commitment on availability of funds' (Annex 7)  statement on the use of the previous pre-financing instalment (Annex 8) At the end of the action, the coordinator has to submit a final report, with both the technical and financial report. 2. Reporting periods When? ERA-NET Cofund actions are normally divided into two reporting periods with two pre- financing payments (or exceptionally three reporting periods with three pre-financing payments, if the Commission/Agency has insufficient payment credits to pay the entire amount as a second pre-financing payment; see Article 21). The first (and, if there are two pre-financing payments, also the second) reporting period triggers a periodic report. 3. Information on cumulative expenditure incurred Since reporting periods in ERA-NET Cofund actions will normally exceed 18 months and ERA-NET Cofund grants are normally above EUR 5 000 000 with a pre-financing payment, all ERA-NET grants contain this clause. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA ERA-NET Cofund 558 ARTICLE 21 — PAYMENTS AND PAYMENT ARRANGEMENTS ARTICLE 21 — PAYMENTS AND PAYMENT ARRANGEMENTS 21.1 Payments to be made The following payments will be made to the coordinator: - a first pre-financing payment; - a second pre-financing payment, on the basis of the request for a second pre-financing payment (see Article 20); - [a third pre-financing payment, on the basis of the request for a third pre-financing payment (see Article 20);] - one payment of the balance, on the basis of the request for payment of the balance (see Article 20) 21.2 Pre-financing payments — Amount — Amount retained for the Guarantee Fund The aim of the pre-financing is to provide the beneficiaries with a float. It remains the property of the EU until the payment of the balance. The [Commission][Agency] will — within 30 days, either from the entry into force of the Agreement (see Article 58) or from 10 days before the starting date of the action (see Article 3), whichever is the latest — make a first pre-financing payment to the coordinator of EUR [insert amount (insert amount in words)], except if Article 48 applies. From this amount, an amount of EUR [insert amount (insert amount in words)], corresponding to 5 % of the maximum grant amount (see Article 5.1), is retained by the [Commission][Agency] and transferred into the ‘Guarantee Fund’. The [Commission][Agency] will — within 60 days after receiving the request (see Article 20) — make a second pre-financing payment to the coordinator of EUR [insert amount (insert amount in words)], except if Articles 47 or 48 apply. [OPTION in case of three pre-financing payments: The [Commission][Agency] will — within 60 days after receiving the request (see Article 20) — make a third pre-financing payment to the coordinator of EUR [insert amount (insert amount in words)], except if Articles 47 or 48 apply.] If the statement on the use of the previous pre-financing instalment shows that less than 70 % of the previous instalment paid has been used to cover the costs of the action, the amount of the new pre-financing to be paid will be reduced by the difference between the 70 % threshold and the amount used. [OPTION if the JRC is a beneficiary: The parts of the pre-financing payments related to the Joint Research Centre (JRC) ([insert amounts (insert amounts in words)] are not paid to the coordinator, but kept by the [Commission][Agency] for the JRC.] 21.3 Interim payments — Amount — Calculation Not applicable […] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA ERA-NET Cofund 559 1. Payments — No interim payments ERA-NET Cofund actions normally are divided into two reporting periods (see Article 20.2) with two pre-financing payments (— unless the action is exceptionally divided into three reporting periods with three pre-financing payments because of insufficient payment credits). There are NO interim payments, but the second pre-financing payment (after the end of the first reporting period, i.e. after the evaluation of the trans-national projects) provides beneficiaries with the necessary funds to support or implement the trans-national projects. The second (or third) pre-financing payment is NOT automatic but must be requested by the coordinator via a ‘statement on the use of the first (or second) pre-financing payment’ (see Article 20). The balance is paid when the action ends. 2. Amount of pre-financing payments How much? Typically, the amounts of the pre-financing payments for ERA-NET Cofund actions are as follows:  the first pre-financing payment is 10 % of the maximum grant amount (see Article 5.1)  the second pre-financing payment is 80 % of the maximum grant amount. If the GA provides for a third pre-financing payment, then the amount is divided as follows:  10 % for the first pre-financing payment  40 % for the second pre-financing payment  40 % for the third pre-financing payment. The second/third pre-financing payment will be reduced, if — according to the statement on use of the previous pre-financing instalment — the previous pre-financing was insufficiently used:  if 70% or more of the first/second pre-financing has been used: the second/third pre-financing is paid in full  if less than 70% of the first/second pre-financing has been used: the second/third pre-financing will be reduced by an amount equal to the difference between the percentage actually used and 70%. 21.5 Notification of amounts due When making payments, the [Commission][Agency] will formally notify to the coordinator the amount due, specifying whether it concerns the second [or third] pre-financing payment or the payment of the balance. For the payment of the balance, the notification will also specify the final grant amount. In the case of reduction of the grant or recovery of undue amounts, the notification will be preceded by the contradictory procedure set out in Articles 43 and 45. […] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 560 VI. PCP-PPI Cofund MGA VI.1 Background information and approach The PCP-PPI Cofund Model Grant Agreement is used for PCP-PPI Cofund actions only. The PCP-PPI MGA follows the General MGA for numbering and content, except for: The annotations will concentrate on differences in substance and interpretation that require explanation. Parts that do not apply or differ only in presentation (e.g. Article 15, Annexes) will not be shown. By contrast, provisions that do not deviate from the General MGA, but that require clarification or a specific interpretation for PCP-PPI Cofund actions are added:  Article 2 (PCP-PPI Cofund actions)  Article 4.1 (PCP-PPI Cofund budget categories)  Article 8 (PCP-PPI Cofund rules on third party involvement). The H2020 MGA PCP-PPI Cofund deviates from the General MGA as follows:  Article 5.2 (PCP-PPI Cofund specific reimbursement rate and forms of costs)  Article 6.2 (PCP-PPI Cofund specific conditions for eligibility of costs)  Article 13 (specific provisions for subcontracting of the PCP R&D services/PPI innovative solutions)  Article 15 (financial support to third parties not applicable)  Article 19 (PCP-PPI Cofund specific deliverables)  Article 20.1 – 20.5 (PCP-PPI Cofund specific reporting provisions)  Article 21.1 – 21.3, 21.5 (PCP-PPI Cofund specific payment provisions)  Article 23 (PCP-PPI Cofund specific impact evaluation provisions)  Annex 2 Model for the estimated budget for the action  Annex 4 Model for the financial statement  Annex 7 [Model for the PCP prior information notice (PIN) for the open market consultation][Model for the PPI prior information notice (PIN) for an open market consultation]  Annex 8 Model for the PCP contract notice  Annex 9 [Model for the PCP request for tenders] [Model for the PPI request for tenders]  Annex 10 Model for the PCP contract award notice  Annex 11 Model for the commitment on availability of resources  Annex 12 Model for the statement on the use of the previous pre-financing instalment H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 561 VI.2 H2020 MGA PCP-PPI Cofund: Annotations ARTICLE 2 — ACTION TO BE IMPLEMENTED [— COMPLEMENTARY GRANT] [— JOINTLY FUNDED ACTION] 1. PCP/PPI Cofund actions What? PCP/PPI Cofund funds:  a joint public procurement of research and development (R&D) services (PCP) or innovative solutions (PPI) AND  related additional coordination and networking activities. Only one PCP or PPI per GA. The additional activities must relate to the call for tender, including coordination and networking activities needed to prepare, manage and follow-up the PCP/PPI procurement and other coordination and networking activities to embed the PCP/PPI into a wider set of demand side activities (see General Annex D to the Main Work Programme). Examples: activities that aim to remove barriers to introducing an innovative solution on the market (including standardisation, certification and regulation); activities that prepare the ground for cooperation on future PCP or PPI projects. Coordination activities needed to coordinate the PCP/PPI procurement are mandatory. Other additional activities are optional (e.g. other coordination and networking activities to embed the PCP/PPI into a wider set of demand side activities). Normally, PCP-PPI Cofund grants are multi-beneficiary grants; exceptionally they can be mono- beneficiary grants for ‘sole participants’ (see General Annex C and D to the Main Work Programme). ARTICLE 2 — ACTION TO BE IMPLEMENTED [— COMPLEMENTARY GRANT] [— JOINTLY FUNDED ACTION] The grant is awarded for the action entitled [insert title of the action] — [insert acronym] (‘action’), as described in Annex 1. [OPTION for complementary grants if foreseen in the work programme: The grant is a ‘complementary grant’ to [the grant agreement(s) under the call(s) for proposals [call identifier(s): H2020 — theme —]] [the following complementary grant agreement(s) No(s): - [insert number] [insert acronym] - [insert number] [insert acronym]].] [OPTION for joint actions (joint call with a third country or an international organisation): The action is a ‘jointly funded action’ which must be coordinated with the ‘joint action’ called [insert the name of the third country or international organisation action], as described in Annex 1.] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 562 For more information on PCP/PPI Cofund actions, see the Online Manual and the H2020 grants fact sheets on the Participant Portal. For more information on the conditions for participation and funding, see the Online Manual or the General Annexes to the Main Work Programme and the call and topics pages of the call. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 563 ARTICLE 4 — ESTIMATED BUDGET AND BUDGET TRANSFERS 1. Estimated budget When submitting the proposal with the estimated eligible costs for PCP-PPI actions, the consortium must decide who will pay the PCP/PPI subcontracts (and who may — by consequence — declare the subcontracting costs), i.e.:  either the lead procurer (centralised payment; the consortium has a common jointly- committed budget; the lead procurer is mandated to sign the subcontracts and pays all subcontractors; see Article 13). OR  the members of the buyers group (the individual members of the buyers group pay the subcontractors pro rata; see Article 13). 2. Budget categories The PCP-PPI Cofund MGA uses its own budget categories. Budget categories of the PCP-PPI Cofund MGA:  direct costs of PCP/PPI subcontracting These are the costs for procuring the R&D services (in the case of PCP) or the innovative solutions (in the case of PPI) (i.e. the estimated procurement price). Only the beneficiary(ies) that pay the PCP/PPI suppliers can declare ‘PCP/PPI subcontracting costs’. Who pays the PCP/PPI suppliers depends on the choice made by the consortium when submitting the estimated eligible costs: either the lead procurer or the members of the buyers group (see Article 4).  costs of related additional coordination and networking activities  direct personnel costs for related additional coordination and networking activities  costs for employees (or equivalent)  costs for natural persons working under a direct contract  costs of personnel seconded by a third party against payment  costs for SME owners without salary  costs for beneficiaries that are natural persons without salary ARTICLE 4 — ESTIMATED BUDGET AND BUDGET TRANSFERS 4.1 Estimated budget The ‘estimated budget’ for the action is set out in Annex 2. It contains the estimated eligible costs and the forms of costs, broken down by beneficiary [(and linked third party)] and budget category (see Articles 5, 6, [and 14]). [OPTION to be used if Article 9 applies: It also contains the estimated costs of the beneficiaries not receiving EU funding (see Article 9).] […] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 564  personnel costs for providing trans-national access to research infrastructure  direct costs of subcontracting for related additional coordination and networking activities  other direct costs for related additional coordination and networking activities  travel costs and related subsistence allowances  equipment costs  costs of other goods and services  capitalised and operating costs of large research infrastructure  indirect costs for related additional coordination and networking activities  specific cost categories (if option applies). Thus, the PCP-PPI Cofund MGA does NOT have:  direct costs of providing financial support to third parties. The budget categories are relevant for the estimated budget (Article 4 and Annex 2), forms of costs (Article 5), cost eligibility rules (Article 6.2) and the cost declarations (i.e. financial statements; Article 20 and Annex 4). . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 565 ARTICLE 5 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATE AND FORMS OF COSTS ARTICLE 5 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATE AND FORMS OF COSTS […] 5.2 Form of grant, reimbursement rate and forms of costs The grant reimburses [OPTION (reimbursement rate foreseen in the work programme): […%] of the action’s eligible costs] (see Article 6) (‘reimbursement of eligible costs grant’), (see Annex 2). The estimated eligible costs of the action are EUR [insert amount (insert amount in words)]. Eligible costs (see Article 6) must be declared under the following forms (‘forms of costs’): (a) for direct costs of [PCP][PPI] subcontracting: as actually incurred costs (‘actual costs’); (b) for direct personnel costs for related additional coordination and networking activities [(excluding personnel costs covered by the unit cost under Point (f))] 8 : - as actually incurred costs (actual costs) or - on the basis of an amount per unit calculated by the beneficiary in accordance with its usual cost accounting practices (‘unit costs’). Personnel costs for SME owners or beneficiaries that are natural persons not receiving a salary (see Article 6.2, Points B.1.4 and B.1.5) must be declared on the basis of the amount per unit set out in Annex 2 (unit costs); (c) for direct costs for subcontracting of related additional coordination and networking activities [(excluding subcontracting costs covered by the unit cost under Point (f))] 9 : as actually incurred costs (actual costs); (d) for other direct costs for related additional coordination and networking activities [(excluding other direct costs covered by the unit cost under Point (f))] 10 : as actually incurred costs (actual costs); (e) for indirect costs for related additional coordination and networking activities [(excluding indirect costs covered by the unit cost under Point (f))] 11 : on the basis of a flat-rate applied as set out in Point B.4(a),(b) and (c) of Article 6.2 (‘flat-rate costs’); (f) [OPTION for specific unit costs (if foreseen by Commission decision and applicable to the grant): for [insert name of specific cost category(ies )12 ] that are part of related additional coordination and networking activities:on the basis of the amount(s) per unit set out in Annex 2 13 (unit costs).] [OPTION: specific cost category(ies): not applicable.] […] 8 To be used only if option in Point (f) is used. 9 To be used only if option in Point (f) is used. 10 To be used only if option in Point (f) is used. 11 To be used only if option in Point (f) is used. 12 Insert precise name of the cost (as in the Commission decision authorising the use of the unit cost/lump-sum). For example: ‘access costs for providing trans-national access to research infrastructure’; costs for ‘clinical studies’; costs for ‘energy efficiency measures in buildings’. 13 Annex 2 must clearly show, for each beneficiary (and linked third party) concerned, all the parameters for the unit cost (i.e. the unit(s), the amount(s) per unit, the research installation/infrastructure for which it is used, the clinical study for which it is used, etc.). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 566 1. Reimbursement rates How much? The work programme/call (see General Annex D to the Main Work Programme) sets the reimbursement rate currently at:  70% for PCP Cofund actions  20 % for PPI Cofund actions. 2. Cost forms The PCP-PPI Cofund MGA uses the same cost forms as the General MGA (i.e. actual costs, unit costs and flat rate costs; see Article 5 H2020 General MGA). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 567 ARTICLE 6 — ELIGIBLE AND INELIGIBLE COSTS 1. Specific conditions for costs to be eligible Article 6.2 refers to specific eligibility conditions applicable per budget category. The PCP-PPI Cofund MGA has its own budget categories. Some of them cover however the same types of costs as the General MGA, with the same conditions for eligibility and rules for cost calculation (see Article 6 H2020 General MGA). For ease of reference, the annotations for Article 6.2 will summarise — for each budget category — the information necessary to establish the eligible costs, i.e. 1. types of costs covered by the budget category 2. cost form under which the costs must be declared (i.e. actual costs, unit costs, flat rate) 3. conditions for eligibility 4. how the costs must be calculated. ARTICLE 6 — ELIGIBLE AND INELIGIBLE COSTS […] 6.2 Specific conditions for costs to be eligible Costs are eligible if they comply with the general conditions (see above) and the specific conditions set out below for each of the following budget categories: A. Direct costs of [PCP][PPI] subcontracting B. Costs for related additional coordination and networking activities ‘Direct costs’ are costs that are directly linked to the action implementation and can therefore be attributed to it directly. They must not include any indirect costs (see Point B.4 below). ‘Indirect costs’ are costs that are not directly linked to the action implementation and therefore cannot be attributed directly to it. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 568 1. Direct costs of PCP/PPI subcontracting: Types of costs — Cost form — Conditions for eligibility — Cost calculation 1.1 What? This budget category covers the costs of the PCP/PPI procurement (i.e. the price paid and the related taxes; for VAT, see Article 6.5). Only costs of R&D services or innovative solutions subcontracted by the beneficiaries are eligible. Costs related to R&D and innovation activities carried out by the beneficiaries themselves are NOT eligible in PCP-PPI Cofund actions. What not? Indirect costs for the PCP subcontracting are not reimbursed. 1.2 These costs must be declared as actual costs (i.e. on the basis of the prices actually paid) (see Article 5.2(a)). 1.3 They must fulfil the following eligibility conditions:  fulfil the general conditions for costs to be eligible (i.e. incurred during the action duration, necessary, linked to the action, etc.; see Article 6.1(a))  be incurred for the PCP/PPI subcontracting described in Annex 1  fulfil the additional cost eligibility conditions set out in Article 13.1.1. 1.4 There is no specific cost calculation method. The costs must correspond to the eligible costs actually incurred. A. Direct costs of [PCP][PPI] subcontracting (including related duties, taxes and charges such as non- deductible value added tax (VAT) paid by the beneficiary) are eligible if the conditions in Article 13.1 are met. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 569 B. Costs for related additional coordination and networking activities are eligible up to EUR [(insert amount (insert amount in words) 15 ], if they comply with the following: B.1 Direct personnel costs for related additional coordination and networking activities [(not covered by Point B.5] Types of eligible personnel costs B.1.1 Personnel costs are eligible, if they are related to personnel working for the beneficiary under an employment contract (or equivalent appointing act) and assigned to the related additional coordination and networking activities ('costs for employees (or equivalent)'). They must be limited to salaries (including during parental leave), social security contributions, taxes and other costs included in the remuneration, if they arise from national law or the employment contract (or equivalent appointing act). Beneficiaries that are non-profit legal entities 16 may also declare as personnel costs additional remuneration for personnel assigned to the related additional coordination and networking activities (including payments on the basis of supplementary contracts regardless of their nature), if: (a) it is part of the beneficiary’s usual remuneration practices and is paid in a consistent manner whenever the same kind of work or expertise is required; (b) the criteria used to calculate the supplementary payments are objective and generally applied by the beneficiary, regardless of the source of funding used. Additional remuneration for personnel assigned to the related additional coordination and networking activities is eligible up to the following amount: (a) if the person works full time and exclusively on the related additional coordination and networking activities during the full year: up to EUR 8 000; (b) if the person works exclusively on the related additional coordination and networking activities but not full-time or not for the full year: up to the corresponding pro-rata amount of EUR 8 000, or (c) if the person does not work exclusively on the related additional coordination and networking activities up to a pro-rata amount calculated as follows: {{EUR 8 000 divided by the number of annual productive hours (see below)}, multiplied by the number of hours that the person has worked on the action during the year}. B.1.2 The costs for natural persons working under a direct contract with the beneficiary other than an employment contract are eligible personnel cost, if: (a) the person works under the beneficiary’s instructions and, unless otherwise agreed with the beneficiary, on the beneficiary’s premises; (b) the result of the work carried out belongs to the beneficiary, and (c) the costs are not significantly different from those for personnel performing similar tasks under an employment contract with the beneficiary. B.1.3 The costs of personnel seconded by a third party against payment are eligible personnel costs if the conditions in Article 11.1 are met. B.1.4 Costs of owners of beneficiaries that are small and medium-sized enterprises (‘SME owners’), who are working on the related additional coordination and networking activities and who do not receive a salary are eligible personnel costs, if they correspond to the amount per unit set out in Annex 2 multiplied by the number of actual hours worked on the related additional coordination and networking activities. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 570 B.1.5 Costs of ‘beneficiaries that are natural persons’ not receiving a salary are eligible personnel costs, if they correspond to the amount per unit set out in Annex 2 multiplied by the number of actual hours worked on the related additional coordination and networking activities. [B.1.6 [OPTION to be used for trans-national access to research infrastructure: Personnel costs for providing trans-national access to research infrastructure are eligible only if also the conditions set out in Article 16.1.1 are met.] [OPTION to be used for virtual access to research infrastructure: Personnel costs for providing virtual access to research infrastructure are eligible only if also the conditions set out in Article 16.2 are met.]] Calculation Personnel costs must be calculated by the beneficiaries as follows: {{hourly rate multiplied by number of actual hours worked on the related additional coordination and networking activities}, plus for non-profit legal entities: additional remuneration to personnel assigned to the related additional coordination and networking activities under the conditions set out above (Point B.1.1)}. The number of actual hours declared for a person must be identifiable and verifiable (see Article 18). The total number of hours declared in EU or Euratom grants, for a person for a year, cannot be higher than the annual productive hours used for the calculations of the hourly rate. Therefore, the maximum number of hours that can be declared for the grant are: {number of annual productive hours for the year (see below) minus total number of hours declared by the beneficiary, for that person for that year, for other EU or Euratom grants}. The ‘hourly rate’ is one of the following: (a) for personnel costs declared as actual costs: the hourly rate is the amount calculated as follows: {actual annual personnel costs (excluding additional remuneration) for the person divided by number of annual productive hours}. The beneficiaries must use the annual personnel costs and the number of annual productive hours for each financial year covered by the reporting period concerned. If a financial year is not closed at the end of the reporting period, the beneficiaries must use the hourly rate of the last closed financial year available. For the ‘number of annual productive hours’, the beneficiaries may choose one of the following: (i) ‘fixed number of hours’: 1 720 hours for persons working full time (or corresponding pro- rata for persons not working full time); (ii) ‘individual annual productive hours’: the total number of hours worked by the person in the year for the beneficiary, calculated as follows: {annual workable hours of the person (according to the employment contract, applicable collective labour agreement or national law) plus overtime worked minus absences (such as sick leave and special leave)}. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 571 ‘Annual workable hours’ means the period during which the personnel must be working, at the employer’s disposal and carrying out his/her activity or duties under the employment contract, applicable collective labour agreement or national working time legislation. If the contract (or applicable collective labour agreement or national working time legislation) does not allow to determine the annual workable hours, this option cannot be used; (iii) ‘standard annual productive hours’: the standard number of annual hours generally applied by the beneficiary for its personnel in accordance with its usual cost accounting practices. This number must be at least 90 % of the ‘standard annual workable hours’. If there is no applicable reference for the standard annual workable hours, this option cannot be used. For all options, the actual time spent on parental leave by a person assigned to the related additional coordination and networking activities may be deducted from the number of annual productive hours; (b) for personnel costs declared on the basis of unit costs: the hourly rate is one of the following: - for SME owners or beneficiaries that are natural persons: the hourly rate set out in Annex 2 (see Points B.1.4 and B.1.5 above), or - for personnel costs declared on the basis of the beneficiary’s usual cost accounting practices: the hourly rate calculated by the beneficiary in accordance with its usual cost accounting practices, if: - the cost accounting practices used are applied in a consistent manner, based on objective criteria, regardless of the source of funding; - the hourly rate is calculated using the actual personnel costs recorded in the beneficiary’s accounts, excluding any ineligible cost or costs included in other budget categories. The actual personnel costs may be adjusted by the beneficiary on the basis of budgeted or estimated elements. Those elements must be relevant for calculating the personnel costs, reasonable and correspond to objective and verifiable information: and - the hourly rate is calculated using the number of annual productive hours (see above). B.2 Direct costs of subcontracting for related additional coordination and networking activities [(not covered by Point B.5)] (including related duties, taxes and charges such as non-deductible value added tax (VAT) paid by the beneficiary) are eligible if the conditions in Article 13.2.1 are met. [OPTION to be used for trans-national access to research infrastructure: Subcontracting costs for providing trans-national access to research infrastructure are eligible only if also the conditions set out in Article 16.1.1 are met.] [OPTION to be used for virtual access to research infrastructure: Subcontracting costs for providing virtual access to research infrastructure are eligible only if also the conditions set out in Article 16.2 are met.] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 572 B.3 Other direct costs for related additional coordination and networking activities [(not covered by Point B.5)] B.3.1 Travel costs and related subsistence allowances (including related duties, taxes and charges such as non-deductible value added tax (VAT) paid by the beneficiary) are eligible if they are in line with the beneficiary’s usual practices on travel. [OPTION to be used for trans-national access to research infrastructure: Travel costs for providing trans-national access to research infrastructure are eligible only if also the conditions set out in Article 16.1.1 are met.] B.3.2 [OPTION by default: The depreciation costs of equipment, infrastructure or other assets (new or second-hand) as recorded in the beneficiary’s accounts are eligible, if they were purchased in accordance with Article 10.1.1 and written off in accordance with international accounting standards and the beneficiary’s usual accounting practices. The costs of renting or leasing equipment, infrastructure or other assets (including related duties, taxes and charges such as non-deductible value added tax (VAT) paid by the beneficiary) are also eligible, if they do not exceed the depreciation costs of similar equipment, infrastructure or assets and do not include any financing fees. The costs of equipment, infrastructure or other assets contributed in-kind against payment are eligible, if they do not exceed the depreciation costs of similar equipment, infrastructure or assets, do not include any financing fees and if the conditions in Article 11.1 are met. The only portion of the costs that will be taken into account is that which corresponds to the duration of the related additional coordination and networking activities and rate of actual use for the purposes of the related additional coordination and networking activities.] [OPTION (alternative to option above) to be used if foreseen in the work programme 17 : The cost of purchasing equipment, infrastructure or other assets (new or second-hand) (as recorded in the beneficiary’s accounts) are eligible if the equipment, infrastructure or other assets was purchased in accordance with Article 10.1.1. The costs of renting or leasing equipment, infrastructure or other assets (including related duties, taxes and charges such as non-deductible value added tax (VAT) paid by the beneficiary) are also eligible, if they do not exceed the depreciation costs of similar equipment, infrastructure or assets and do not include any financing fees. The costs of equipment, infrastructure or other assets contributed in-kind against payment are eligible, if they do not exceed the depreciation costs of similar equipment, infrastructure or assets, do not include any financing fees and if the conditions in Article 11.1 are met.] [OPTION (in addition to one of the two options above) for trans-national and virtual access to research infrastructure: As an exception, the beneficiaries must not declare such costs (i.e. costs of renting, leasing, purchasing depreciable equipment, infrastructure and other assets) for providing trans-national or virtual access to research infrastructure (see Article 16).] B.3.3 Costs of other goods and services (including related duties, taxes and charges such as non-deductible value added tax (VAT) paid by the beneficiary) are eligible, if they are: (a) purchased specifically for the related additional coordination and networking activities and in accordance with Article 10.1.1 or (b) contributed in kind against payment and in accordance with Article 11.1. Such goods and services include, for instance, consumables and supplies, dissemination (including open access), protection of results, certificates on the financial statements (if they are required by the Agreement), certificates on the methodology, translations and publications. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 573 [OPTION to be used for trans-national access to research infrastructure: Costs of other goods and services for providing trans-national access to research infrastructure are eligible only if also the conditions set out in Article 16.1.1 are met.] [OPTION to be used for virtual access to research infrastructure: Costs of other goods and services for providing virtual access to research infrastructure are eligible only if also the conditions set out in Article 16.2 are met.] B.3.4 Capitalised and operating costs of ‘large research infrastructure’ 18 [OPTION by default: directly used for the related additional coordination and networking activities are eligible, if: (a) the value of the large research infrastructure represents at least 75 % of the total fixed assets (at historical value in its last closed balance sheet before the date of the signature of the Agreement or as determined on the basis of the rental and leasing costs of the research infrastructure); (b) the beneficiary’s methodology for declaring the costs for large research infrastructure has been positively assessed by the Commission (‘ex-ante assessment’); (c) the beneficiary declares as direct eligible costs only the portion which corresponds to the duration of the related additional coordination and networking activities and the rate of actual use for the purposes of the additional coordination and networking activities, and (d) they comply with the conditions as further detailed in the annotations to the Horizon 2020 Grant Agreements.] [OPTION for all topics within calls under Part ‘Research Infrastructure’ (except for e-Infrastructure): Not applicable.] [OPTION to be used if foreseen in the work programme: Not applicable.] B.4 Indirect costs for related additional coordination and networking activities [(not covered by Point B.5] Indirect costs are eligible if they are declared on the basis of the flat-rate of 25 % of the eligible direct costs (see Article 5.2 and Points B.1 to B.3), from which are excluded: (a) costs of subcontracting [and][;] (b) costs of in-kind contributions provided by third parties which are not used on the beneficiary’s premises [and][;] (c) [OPTION if Point B.5 applies and the unit cost covers indirect costs: [unit costs under Article 5.2(f) and Point B.5][OPTION: not applicable]. Beneficiaries receiving an operating grant 20 financed by the EU or Euratom budget cannot declare indirect costs for the period covered by the operating grant. B.5 [OPTION: [Insert name of specific cost category(ies) that are part of related additional coordination and networking activities]][OPTION if no specific cost categories applicable to grant: Specific cost category(ies)] [OPTION for specific unit costs, if foreseen by Commission decision and applicable to the grant: [Insert name of specific cost category 21 ] that are part of related additional coordination and networking activities are eligible, if they correspond to the amount per unit set out in Annex 2 multiplied by the number of actual units, [and if [insert additional eligibility conditions if any]]. [same for each specific cost category] [OPTION: Not applicable] […] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 574 1. Costs of related additional coordination and networking activities: Types of costs —Cost form — Conditions for eligibility — Cost calculation 1.1 The beneficiaries may declare the following types of costs as ‘costs of related additional coordination and networking activities’:  direct personnel costs for related additional coordination and networking activities:  basic remuneration (basic salary and complements)  for non-profit legal entities: additional remuneration (‘bonus payments’)  costs for natural persons working under a direct contract  costs of personnel seconded by a third party against payment  costs of SME owners without salary  costs of beneficiaries that are natural persons not receiving a salary’  personnel costs for providing trans-national or virtual access to research infrastructure (if option applies)  direct costs of subcontracting for related additional coordination and networking activities  other direct costs for related additional coordination and networking activities:  travel and related subsistence allowances  equipment  other goods and services and 15 This amount must correspond to 30% for PCP and 50% for PPI of the estimated eligible costs set out in Article 5.2. 16 For the definition, see Article 2.1(14) of the Rules for Participation Regulation No 1290/2013: ‘non-profit legal entity’ means a legal entity which by its legal form is non-profit-making or which has a legal or statutory obligation not to distribute profits to its shareholders or individual members. 17 To be used as an exception, only if justified by the nature of the action and the context of the use of the equipment or assets, if provided for in the work programme. 18 ‘Large research infrastructure’ means research infrastructure of a total value of at least EUR 20 million, for a beneficiary, calculated as the sum of historical asset values of each individual research infrastructure of that beneficiary, as they appear in its last closed balance sheet before the date of the signature of the Agreement or as determined on the basis of the rental and leasing costs of the research infrastructure. 19 For the definition see Article 2(6) of the H2020 Framework Programme Regulation No 1291/2013: ‘Research infrastructure’ are facilities, resources and services that are used by the research communities to conduct research and foster innovation in their fields. Where relevant, they may be used beyond research, e.g. for education or public services. They include: major scientific equipment (or sets of instruments); knowledge-based resources such as collections, archives or scientific data; e-infrastructures such as data and computing systems and communication networks; and any other infrastructure of a unique nature essential to achieve excellence in research and innovation. Such infrastructures may be ‘single-sited’, ‘virtual’ or ‘distributed’. 20 For the definition, see Article 121(1)(b) of Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002 (‘Financial Regulation No 966/2012’) (OJ L 218, 26.10.2012, p.1): ‘operating grant’ means direct financial contribution, by way of donation, from the budget in order to finance the functioning of a body which pursues an aim of general EU interest or has an objective forming part of and supporting an EU policy. 21 Insert precise name of the cost (as in the Commission decision authorising the use of the unit cost). For example: ‘access costs for providing trans-national access to research infrastructure’, ‘costs for clinical studies’, ‘costs for energy efficiency measures in buildings’. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 575  costs of large research infrastructure  indirect costs for related additional coordination and networking activities  specific cost categories (if option applies). 1.2 All costs — except direct personnel costs and personnel costs of SME owners or of beneficiaries that are natural persons not receiving a salary — must be declared as actual costs. Direct personnel costs may be declared as unit cost in accordance with the usual cost accounting practices (i.e. ‘average personnel costs’). Personnel costs of beneficiaries that are SME owners or natural persons not receiving a salary must be declared on the basis of the unit cost fixed by Commission Decision C(2013) 8197122 and set out in Annex 2 and 2a of the GA. This concerns only beneficiaries that are SMEs (e.g. contracting authorities or contracting entities that are SMEs), not PCP/PPI subcontractors that are SMEs. 1.3 The same conditions for eligibility apply as in the General MGA (see Article 6 H2020 General MGA). The PCP/PPI Cofund MGA has however the following specificities: The costs must be incurred by the beneficiaries for additional coordination and networking activities that are related to the call for tender (e.g. coordination costs for preparing, managing monitoring and following-up the PCP/PPI procurement, costs for other coordination and networking activities to embed the PCP/PPI into a wider set of demand side activities). Examples: The evaluation of the PCP or PPI tender is subcontracted or undertaken by in-house consultants under the responsibility of the consortium participants. Resources or equipment for testing innovative solutions are made available by end-users of the targeted innovative solutions (in the form of action tasks undertaken by linked third parties or as in-kind contributions of third parties). Costs for validation and testing of solutions provided by the subcontractors. 1.4 The same rules for cost calculation apply as in the General MGA (see Article 6 H2020 General MGA). According to General Annex D to the Main Work Programme, the costs of related additional coordination and networking activities are eligible up to a maximum amount of 30/50% of the total requested grant amount (for PCP/PPI actions). (For each GA, this maximum amount is fixed in the GA (see Article 6.2.B). Thus, the amount of EU funding for related additional coordination and networking activities does NOT change, even if the costs actually incurred for PCP/PPI subcontracting end up being less than initially estimated (e.g. if the buyers group is able to procure at a better price than it had budgeted).) 122 Available at http://ec.europa.eu/research/participants/data/ref/h2020/other/legal/unit_costs/unit-costs_sme- owners_natural-persons-no-salary_en.pdf H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 576 ARTICLE 8 — RESOURCES TO IMPLEMENT THE ACTION — THIRD PARTIES INVOLVED IN THE ACTION 1. Appropriate own resources — Use of third party resources — Third parties involved in the action For PCP-PPI Cofund actions, generally the same rules on third party involvement apply as in the General MGA (see Article 8 H2020 General MGA). Certain third party resources (i.e. purchasing of goods, works or services (Article 10), in-kind contributions (Articles 11 and 12)) are however ONLY allowed for related additional coordination and networking activities. Example: Equipment needed for testing and validating solutions is provided by a third party as in-kind contribution. By contrast, subcontracting (Article 13) is possible both for PCP/PPI subcontracting and related additional coordination and networking activities. Linked third parties (Article 14) can be part of the buyers group for subcontracting. ARTICLE 8 — RESOURCES TO IMPLEMENT THE ACTION — THIRD PARTIES INVOLVED IN THE ACTION The beneficiaries must have the appropriate resources to implement the action. If it is necessary to implement the action, the beneficiaries may: - purchase goods, works and services (see Article 10); - use in-kind contributions provided by third parties against payment (see Article 11); - use in-kind contributions provided by third parties free of charge (see Article 12); - call upon subcontractors to implement action tasks described in Annex 1 (see Article 13); - call upon linked third parties to implement action tasks described in Annex 1 (see Article 14). In these cases, the beneficiaries retain sole responsibility towards the [Commission][Agency] and the other beneficiaries for implementing the action. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 577 ARTICLE 13 — IMPLEMENTATION OF ACTION TASKS BY SUBCONTRACTORS ARTICLE 13 — IMPLEMENTATION OF ACTION TASKS BY SUBCONTRACTORS 13.1 [OPTION for PCP: Rules for the pre-commercial procurement of research and development services 13.1.1 The beneficiaries will award subcontracts for the PCP research and development services (‘PCP R&D services’) that are necessary to address the ‘common challenge’ set out in Annex 1. The subcontracts must be awarded as one single joint procurement by the beneficiaries concerned (i.e. the ‘lead procurer’ and the ‘buyers group’). The lead procurer must be a ‘contracting authority’ or ‘contracting entity’ within the meaning of Directives 2004/18/EC 25 and 2004/17/EC 26 . The buyers group must constitute a ‘total jointly committed budget’ for payment of the subcontracts. The ‘buyers group’, the ‘lead procurer’, the services to be subcontracted (for each implementation phase (‘PCP phase’)), their estimated costs and the estimated financial contribution per beneficiary to the ‘total jointly committed budget’ must be set out in Annex 1. The estimated costs of PCP subcontracting per beneficiary must be set out in Annex 2. [OPTION for classified deliverables: Classified deliverables may be subcontracted only after explicit approval (in writing) from the [Commission][Agency] (see Article 37).] The beneficiaries concerned must — throughout the action —: - guarantee equal treatment of tenderers and subcontractors and avoid any restrictions or distortions of competition; - avoid any conflict of interest (see Article 35); - allow for all communications to be made in English (and any additional language(s) they may have chosen). The subcontracts for pre-commercial procurement must provide for the following: - the ownership, by the subcontractors, of the intellectual property rights on the results that they generate; - the right of the buyers to access results — on a royalty-free basis — for their own use; - the right of the buyers to grant (or to require the subcontractors to grant) non-exclusive licences to third parties to exploit the results — under fair and reasonable conditions — (without the right to sub-licence); - the obligation of the subcontractors to transfer back to the buyers the ownership of intellectual property generated by subcontractors during the PCP, if subcontractors fail to commercially exploit the results within the period set out in the subcontract; - the right of the buyers to publish — at the time of the contract award notice — the identity of the winning tenderers and a project summary provided by the winning tenderers, and to publish — after R&D has finished and after consulting the subcontractors — summaries of the results as well as the identities of the subcontractors that successfully completed the last phase of the PCP. The beneficiaries concerned must ensure that the majority of the research and development work done by the subcontractor(s) (including the work of the main researchers) is located in the EU Member States or associated countries (‘place of performance obligation’). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 578 The beneficiaries concerned must prepare, procure and implement the subcontracts in accordance with the following requirements: (a) For the ‘preparation stage’: (i) agree (in writing) on their internal procedures for carrying out the joint PCP procurement (‘joint procurement agreement’); (ii) make an open market consultation, which: - is published — two months in advance — in the Official Journal of the European Union (via a ‘prior information notice (PIN)’, drawn up in accordance with Annex 7 in English and any additional language(s) chosen by the buyers group); - is promoted and advertised widely; - is summarised on the project website and other web-sites requested by the [Commission][Agency], together with a list of Q&As raised during the open market consultation; (iii) prepare ‘common tender specifications’ (b) For the ‘procurement/tendering stage’: (i) Step 1: make a ‘contract notice’ (drawn up in accordance with Annex 8), which - is published by the lead procurer in the Official Journal of the European Union (in English and any additional language(s) chosen by the buyers group); - specifies that the procurement concerns a pre-commercial procurement that is exempted from Directives 2004/18 and 2004/17 28 ; - specifies a time-limit for receipt of tenders of at least two months; - allows for the submission of tenders in English (and any additional language(s) chosen by the buyers group); - is promoted and advertised widely; - indicates how potential tenderers can obtain the ‘request for tenders’; and the request for tenders (drawn up in accordance with Annex 9) inviting all interested economic operators to tender, which: - identifies the lead procurer, the buyers group and, if applicable, third parties involved in the PCP; - informs potential tenderers about the outcome and list of Q&As of the market consultation (see above); - describes the common challenge (using functional or performance based specifications and taking into account the outcome of the open market consultation); - describes the process for the evaluation and selection of the tenders for the first PCP phase and the intermediate evaluations after each following PCP phase; - describes the practical set-up for the implementation of the subcontracts; - describes the minimum requirements that subcontractors must comply with during the PCP; H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 579 - describes the arrangements for intellectual property rights, confidentiality, publicity (information about contract award and publication of summaries of R&D results) and rules on applicable law and dispute settlement; (ii) Step 2: make an evaluation of the tenders, ranking them, on the basis of the common tender specifications (see above), according to best value for money criteria and ensuring that the price corresponds to market conditions; (iii) Step 3: award the subcontracts to a minimum of three tenderers offering best value for money and a price corresponding to market conditions. The framework agreements (one agreement per selected tenderer) must be signed by the lead procurer and set out the terms and conditions that govern the specific contracts. The specific contracts (one agreement per selected tenderer and PCP phase) must be signed by the lead procurer and set out the details of the PCP R&D services purchased by each buyer (in particular, their quantity and price); (iv) Step 4: make a ‘contract award notice’ (drawn up in accordance with Annex 10) which is published — within 48 days after conclusion of the framework agreements — by the lead procurer in the Official Journal of the European Union (in English and any additional language(s) chosen by the buyers group); (c) For the ‘contract implementation stage’: (i) monitor that the PCP R&D services are implemented in compliance with the objectives of the action set out in Annex 1; (ii) ensure compliance with the planning of resources set out in Annex 1 and the estimated budget indicated in Annex 2; (iii) ensure payment of the subcontractors. The beneficiaries concerned must ensure that the right of the Commission [and the Agency], the European Court of Auditors (ECA) and the European Anti-Fraud Office (OLAF) to exercise their rights under Articles 22 and 23 also towards the subcontractors. 13.1.2 In addition, the beneficiaries concerned must ensure that their obligations under Articles 17.1, 18, 34, 35, 37, 36, 38, 39 and 46 also apply to the subcontractors. The beneficiaries concerned must also ensure that every prior information notice, contract notice or contract award notice published in relation to the subcontracting includes the following disclaimer: ‘This procurement receives funding under the European Union’s Horizon 2020 research and innovation programme under the grant agreement No [number]). The EU is however not participating as a contracting authority in this procurement.’ ] 25 Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public work contracts, public supply contracts and public service contracts (OJ L 134, 30.4.2004, p. 114). 26 Directive 2004/17/EC of the European Parliament and of the Council of 31 March 2004 coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors (OJ L 134, 30.4.2004, p. 1). 28 See Article 16(f) of Directive 2004/18/EC, Article 24(e) of Directive 2004/17/EC. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 580 1. PCP subcontracting In PCP Cofund actions, the beneficiaries award PCP subcontracts for research and development services (‘PCP R&D services’) that are necessary to address a ‘common challenge’ set out in Annex 1. (‘PCP subcontract’ thus means a contract for the purchase of R&D services that is identified in Annex 1 as action task.) Characteristics of subcontracting:  Joint subcontracting by some or all of the beneficiaries (and linked third parties) (‘buyers group’), with a joint procurement in 3 phases The ‘buyers group’ is the group that finances and undertakes together the joint PCP procurement (i.e. normally the entities that need the purchased service/solution or central purchasing bodies). For PCP/PPI Cofund actions, it must normally be made up of:  a minimum of 2 public procurers (i.e. ‘contracting authorities’ or ‘contracting entities’ as defined in the EU public procurement Directives 2004/18/EC and 2004/17/EC123 — or any EU legislation that replaces these Directives124) Any entity that fits the definition of a ‘contracting authority’ or ‘contracting entity’ as defined in those Directives is considered a public procurer — regardless of whether the EU public procurement Directives themselves apply or not. Example: International entities such as European Research Infrastructure Consortia (ERICs) that fit as majority publicly owned entities the public procurement Directives definition of contracting authorities, but to which those Directives do not apply, are considered public procurers that can participate in the buyers group and are eligible for funding under PCP/PPI Cofund actions.  that are established in two different EU Member States or H2020 associated countries (see General Annex D to the Main Work Programme). This is in addition to the general minimum requirements for participation for Horizon 2020 actions (i.e. minimum of 3 independent legal entities established in different EU Member States or H2020 associated countries; see General Annexes C and D to the Main Work Programme — unless the work programme/call allows for the participation of sole participants). Procurers that are not public procurers, but provide services of public interest and share the same procurement need may also be part of the buyers group. Example: a group of a minimum of two public hospitals from two different EU Member States or H2020 associated countries could be joined by a private hospital or NGO (e.g. Médecins sans frontiers). The buyers group is NOT open to other types of procurers that are not providing services of public interest, even if they may share the same procurement need (e.g. private company procurers like IBM or EADS that are not providing hospital services cannot be funded as buyers in the above example of a consortium of hospital procurers, even if they would be interested to procure the same software system as the hospital procurers). Such other entities may be involved in the action as:  beneficiaries/linked third parties responsible for other action tasks related additional coordination and networking activities (e.g. certification bodies, end-users)  third parties providing in-kind contributions 123 Directive 2009/81/EC uses the definitions of Directives 2004/17/EC and 2004/18/EC (see Article 1(17) of Directive 2009/81/EC). 124 See Directives 2014/24/EU and 2014/25/EU. For the purposes of the GA, the suppliers selected as a result of the PCP/PPI call for tender are considered ‘subcontractors’ and the contracts with them are ‘subcontracts’. They do NOT become beneficiaries of the GA. . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 581 if they are not potential suppliers of solutions sought for by the procurement and have no other type of conflict of interest. The PCP procurement is implemented in 3 phases. The buyers group must select multiple competing subcontractors (with a minimum of three subcontractors for the first PCP phase). At the end of each phase, an intermediate evaluation will take place to identify the subcontractors that successfully completed the phase. A call-off will be made to select the subcontractors with the best value for money offers for the next phase. In order to obtain a competitive supply chain as a result of the PCP, the buyers group must plan the budget distribution across the PCP phases so that there is enough budget for minimum two subcontractors in the last PCP phase 3. The tenders for the PCP call for tender must therefore contain:  a detailed offer for phase 1  the goals, plans and unit price conditions for phases 2 and 3.  Concerns R&D services addressing a ‘common challenge’ (i.e. a specific procurement need that is part of the mid-to-long-term innovation plans of the buyers group). The common challenge may have several facets or building blocks, as long as all the beneficiaries in the buyers group share the need for all of them and are willing to co-finance all of them. If the common challenge is split in several sub-challenges on which different vendors can compete, the minimum requirements of 3 subcontractors for phase 1 and 2 for phase 3 applies per sub-challenge, in order to obtain a competitive supply chain for each sub-challenge. The procurement must be for an ‘R&D services contract’ (i.e. a contract with the objective to provide R&D services; see also General Annex E to the Main Work Programme). If required for the provisioning of the R&D services and required by the procurement need of the buyers group, the PCP may include the purchase of supplies (such as the limited volume of prototypes or first test-products resulting from the R&D). Example: A traffic authority may need to acquire more environmentally-friendly tarmac that was developed and installed during the PCP on a test strip of the road, because the old tarmac was destroyed during the PCP in order to test the new variant and the traffic authority needs to carry out further testing on the tarmac after the PCP is done. This does NOT extend to ‘quantity production’ or ‘supply to establish commercial viability or to recover research and development costs’ (— otherwise it will not be a an R&D services contract and it will not be exempted from the WTO GPA125). Supplies can NOT constitute the majority of the contract value.  All subcontracts paid from one common budget for the procurement (‘common jointly- committed budget’) This budget is based on the financial commitments of the beneficiaries in the buyers group and must correspond to the call-for-tender-budget (i.e. the estimated procurement price = estimated direct costs of PCP subcontracting; see Articles 4 and 6.2.A).  Joint procurement procedure (i.e. joint call for tender, joint evaluation of offers and joint award) is coordinated and led by one beneficiary (‘lead procurer’) The lead procurer may be part of the buyers group or not (i.e. it may also be a beneficiary that is not part of the buyers group). Example: the lead procurer can be a central purchasing body that carries out the procurement for the buyers group, but does not contribute financially to the common jointly committed budget). The lead procurer must be a ‘contracting authority’ or ‘contracting entity’ as defined in the EU public procurement Directives 2004/17/EC and 2004/18/EC (or any EU legislation that replaces these Directives126). 125 PCP procurements are exempted from the WTO GPA (since according to Annex IV of the WTO GPA R&D services are excluded from the scope of the GPA, i.e. both from the national treatment obligation and from the non- discrimination obligation). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 582  Subcontracts signed by the lead procurer, in the name and on behalf of the buyers group The lead procurer must be mandated by the buyers group in the joint procurement agreement. The subcontracts to be signed are:  a framework contract with each selected subcontractor, covering the whole PCP and  specific contracts with each selected subcontractor, for each PCP phase.  Subcontracts implemented by the selected subcontractors (‘PCP implementation’)  Subcontractors paid either by the lead procurer or (pro rata) by the members of the buyers group (based on their individual financial contribution to the jointly-committed budget), depending on the choice of the consortium when it submitted the estimated eligible costs (see Article 4). PCP subcontracting is NOT restricted to a limited part of the action (since the PCP subcontracting is the main goal of PCP Cofund actions). There can only be one PCP per PCP Cofund action. 2. Additional eligibility condition: Procurers, tasks and costs set out in Annexes 1 and 2 — No simplified approval procedure Annexes 1 and 2 must clearly identify the common challenge (types of R&D services to be procured), the lead procurer, the buyers group and the common jointly-committed budget and the estimated costs per beneficiary, already at the moment of the signature of the GA. Any changes at a later stage (e.g. after the preparation stage of the project) are only possible through an amendment; see Article 55). At the end of the preparation stage of the project, the consortium must confirm (in the periodic report; see Article 20.3) that the lead procurer has not changed and that the buyers group’s commitments to the common jointly-committed budget are still valid (or whether changes are needed, based on the feedback of the preparation stage of the project (e.g. the open market consultation)). For PCP subcontracting, there is NO ‘simplified approval procedure’ (contrary to the subcontracting of related additional coordination and networking activities; see Article 13.2). 3. Additional eligibility condition: Place of performance obligation The majority (i.e. at least 50%) of the total amount of work done by the subcontractors for the PCP implementation (including the work of the main researchers) must be performed in EU Member States or H2020 associated countries (as defined in Article 25 H2020 General MGA). This includes R&D and operational activities (e.g. research, development, testing, certifying solutions, etc.). The beneficiaries must require subcontractors to comply with this place of performance obligation, including when subcontractors subcontract work out themselves. This obligation must however be clearly set out in the Framework Agreement (see below). 126 See Directives 2014/24/EU and 2014/25/EU. Article 13.1 contains both additional cost eligibility conditions (in Article 13.1.1) and ‘other obligations’ (in Article 13.1.2). . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 583 4. Additional eligibility condition: Procurement procedure — Best value for money — Price corresponding to market conditions The beneficiaries must base the PCP subcontracts on the best value for money (see Articles 10 and 13 H2020 General MGA). The tenders for the PCP call for tender must therefore contain:  a detailed offer for phase 1  the goals, plans and unit price conditions for phases 2 and 3. The offers for the call-offs for phase 2 and 3 must contain the detailed offer for phase 2 respectively phase 3. The price offered for phase 2 and 3 must be based on the unit prices in the framework agreement The GA foresees additional rules, i.e. that:  the price must correspond to market conditions This means that the price must be lower than the exclusive development price (since subcontractors obtain intellectual property ownership rights (IPRs)). AND  a specific procurement procedure must be followed. The main elements of this procedure are as follows:  the buyers group and the lead procurer must formalise the PCP in a joint procurement agreement that:  specifies the working arrangements for the joint procurement (e.g. division of tasks between the lead procurer and the buyers group; signature of the subcontracts, etc.)  sets out the financial arrangements (e.g. the contributions of each member of the buyers group to the common jointly-committed budget; arrangements for financial transfers between buyers group and/or lead procurer for carrying out the PCP)  specifies in-kind contributions provided by third parties  sets out other rights and obligations of the buyers group and lead procurer (e.g. allocation of IPR-related rights resulting from the PCP; commitment to provide test environments)  the procurement must be preceded by an ‘open market consultation’ This open market consultation must be implemented as a ‘technical dialogue’ as defined in the EU public procurement Directives 2004/17/EC and 2004/18/EC (or any EU legislation that replaces these Directives127). A prior information notice (PIN) must be published in the Official Journal of European Union (OJEU) and must be promoted widely, in particular via the websites specified by the Commission/Agency and the National Contact Points (NCPs) for Horizon 2020.  the procurement must be based on ‘common procurement specifications’ prepared by the buyers group and the lead procurer 127 See Directives 2014/24/EC and 2014/25/EC. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 584 These specifications must be based on an analysis of the buyers group’s needs (i.e. the common challenge) and take into account the feedback from the open market consultation (meaning that it should be refined based on this feedback, if needed). They must describe the functionality and performance requirements (including minimum requirements) that solutions must meet, rather than prescribing a specific solution.  the buyers group and the lead procurer must publish a contract notice to launch the request for tenders. The request for tenders does not have to be published. It can be provided on request.  the buyers group and the lead procurer must jointly evaluate the tenders and make a joint award decision. Beneficiaries have to demonstrate — upon request — that the selection of the subcontractors complied with these rules. 5. Additional eligibility condition: Minimum content of framework agreement and specific contracts The beneficiaries must conclude a framework agreement (with each selected subcontractor) which sets out the framework conditions for all 3 phases of the PCP implementation, including:  the practical set-up of the implementation of the subcontracts, in particular:  the number, duration and budget of the PCP phases  the minimum number of expected subcontractors per PCP phase  the procedure for the intermediate evaluations after each PCP phase (in particular, the evaluation criteria and the weightings)  the process for monitoring of on-going R&D work and reporting obligations of subcontractors  the procedures for accounting and payments  an exclusion of contract renegotiations  the role and the rights and obligations of third parties involved in the implementation of the subcontracts  the minimum requirements that subcontractors must comply with during the PCP implementation, in particular:  compliance with the definition of R&D services (see General Annex E to the Main Work Programme)  the obligation of the subcontactors to ensure that the majority of the R&D work (including the work of the main researchers) is located in the EU Member States or H2020 associated countries (‘place of performance obligation’) For more information on the tender documents, see the Guidance — How to complete your simap forms for PCPs and the template for PCP request for tenders. The template is not mandatory; beneficiaries may use their own model, provided that it fulfils the minimum conditions laid down in the grant agreement and it contains at least the information detailed in the template. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 585  additional national requirements, ethical and/or security requirements (if applicable)  the arrangements for intellectual property rights, in particular:  the ownership, by the subcontractors, of the intellectual property rights on the results that they generate  the right of the buyers to access to use the results — on a royalty-free basis — for their own internal use (see General Annex E to the Main Work Programme)  the right of the buyers to grant (or to require the subcontractors to grant) non- exclusive licences to third parties to exploit the results — under fair and reasonable conditions - and without the right to sub-licence  the obligation of the subcontractors to transfer results (generated by subcontractors during the PCP implementation) to the buyers, if they fail to commercially exploit the results within the period set out in the framework agreement or use the results to the detriment of the public interest, including security interests (see General Annex E to the Main Work Programme)  the right of the buyers to publish:  at the time of the contract award notice: the identity of the winning tenderers and a project summary provided by the winning tenderers  after R&D has finished (and after consulting the subcontractors): summaries of the results as well as the identities of the subcontractors that successfully completed the last phase of the PCP The framework agreement remains binding for as long as subcontractors remain in the PCP (i.e. normally until the PCP subcontractor is no longer selected to continue for the next PCP phase). The beneficiaries must conclude specific contracts (with each selected subcontractor and for each PCP phase) must set out the specific conditions applicable to each PCP phase, in particular:  the details of the PCP R&D services purchased by each buyer  quantity and  price. The phase 1 specific contract is signed (together with the framework agreement) with all the subcontractors selected for phase 1. After phase 1 is finished, a call-off to award the phase 2 specific contracts will be organised among the subcontractors who have successfully completed phase 1. After phase 2 is finished, a call-off to award at least two phase 3 contracts will be organised among the subcontractors who have successfully completed phase 2. 6. Additional eligibility condition: Compliance with the planning of resources To ensure compliance with the resource planning (as set out in Annex 1), the beneficiaries must ensure the timely allocation of resources in order to implement the PCP (including allocating sufficient time and resources for testing solutions in real-life operational end-user environments.) Example: testing facilities or equipment to be provided by the buyers group (or other beneficiaries or third parties). 7. ‘Other obligation’: Compliance with national procurement rules H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 586 The EU public procurement Directives 2004/17/EC, 2004/18/EC and 2009/81/EC do NOT apply to the pre-commercial procurement of R&D services (because such services are exempted128). However, beneficiaries that are ‘contracting authorities’ or ‘contracting entities’ (within the meaning of the EU public procurement Directives 2004/18/EC and 2004/17/EC129 — or any EU legislation that replaces these Directives130; see Article 13 H2020 General MGA) must implement the PCP procurement in compliance with provisions in national laws on public procurement that may be applicable to this type of R&D services contracts. 128 See Article 16(f) of Directive 2004/18/EC (Article 14 of Directive 2014/24/EU), Article 24(e) of Directive 2004/17/EC (Article 32 of Directive 2014/25/EU) and Article 13(f)(j) of Directive 2009/81/EC. 129 Directive 2009/81/EC uses the definitions of Directives 2004/17/EC and 2004/18/EC (see Article 1(17) of Directive 2009/81/EC). 130 See Directive 2014/24/EU and Directive 2014/25/EU. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 587 [OPTION for PPI: Rules for procurement of the PPI innovative solution(s) 13.1.1 The beneficiaries will award subcontracts for procuring the ‘PPI innovative solution(s)’ that are necessary to address the ‘common challenge’ set out in Annex 1. The subcontracts must be awarded in one single joint procurement procedure by the beneficiaries concerned (i.e. the ‘buyers group’ and the ‘lead procurer’). The lead procurer must be a ‘contracting authority’ or ‘contracting entity’ within the meaning of Directives 2004/18/EC 29 , 2004/17/EC 30 . The ‘buyers group’, the ‘lead procurer’, the innovative solution(s) and their estimated cost must be set out in Annex 1. The estimated cost of PPI subcontracting per beneficiary must be set out in Annex 2. [OPTION for classified deliverables: Classified deliverables may be subcontracted only after explicit approval (in writing) from the [Commission][Agency] (see Article 37).] The beneficiaries concerned must — throughout the action —: - guarantee equal treatment of tenderers and subcontractors and avoid any restrictions or distortions of competition; - avoid any conflict of interest (see Article 35); - allow for all communications (with potential tenderers, tenderers and subcontractors) to be made in English (and any additional language(s) they may have chosen). Participation in PPI tendering procedures must be open on equal terms to tenderers from EU Member States, associated countries and other countries with which the EU has an agreement in the field of public procurement. If the WTO Government Procurement Agreement applies, PPI subcontracts must also be open to tenderers from States that have ratified this agreement. The beneficiaries concerned must prepare, procure and implement the subcontracts in accordance with the following requirements: (a) For the ‘preparation stage’: (i) identify and agree (in writing) on their internal procedures for carrying out the joint PPI procurement (‘joint procurement agreement’); (ii) [OPTION for PPI Cofund actions that are not limited to the procurement of the limited set of prototypes and/or test products developed during a preceding PCP Cofund action: make an ‘open market consultation’ inviting all interested economic operators to participate, which - is published — two months in advance —by the lead procurer in the Official Journal of the European Union (via a ‘prior information notice (PIN)’, drawn up in accordance with Annex 7 in English and any additional language(s) chosen by the buyers group); - is promoted and advertised widely; - is summarised on the project website and other web-sites requested by the [Commission][Agency], together with a list of Q&As raised during the open market consultation;] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 588 [OPTION: not applicable] (iii) prepare common tender specifications, based on the needs analysis of the buyers group; (b) For the ‘procurement/tendering stage’: [OPTION for PPI Cofund actions that are not limited to the procurement of a set of prototypes and/or test products developed during a preceding PCP cofund action: (i) Step 1: make a ‘contract notice’, which: - is published by the lead procurer in the Official Journal of the European Union (in English and any additional language(s) chosen by the buyers group); - specifies a time-limit for receipt of tenders that is sufficient for the preparation of innovative bids. The call for tender must remain open for at least 60 days. The restricted procedure with shortened time-limit for receipt of tenders may not be used; - allows for the submission of tenders in English (and any additional language(s) chosen by the buyers group), - is promoted and advertised widely; - indicates how potential tenderers can obtain the tender documentation and the ‘PPI request for tenders’; and the tender documentation and PPI request for tenders (drawn up in accordance with Annex 9). (ii) Step 2: make an evaluation of the tenders, ranking them, on the basis of the common tender specifications (see above), according to best value for money criteria and ensuring that the price corresponds to market conditions; (iii) Step 3: award the subcontract(s) to the tenderer(s) offering best value for money and a price corresponding to market conditions; (iv) Step 4: make a ‘contract award notice’, which is published by the beneficiary or lead procurer in the Official Journal of the European Union (in English and any additional language(s) chosen by the buyers group);] [OPTION for PPI Cofund actions that are limited to the procurement of the set of prototypes and/or test products developed during a preceding PCP action: (i) Step 1: make a request for offers from at least three providers, which — in accordance with the negotiated procedure without publication as provided for in Directives 2004/18/EC and 2004/17/EC 32 —: - uses technical specifications that are functional or performance based; - avoids selection criteria based on restrictive qualification requirements or disproportionate financial guarantees; - specifies award criteria based on best value for money H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 589 - describes the practical set-up for the implementation of the subcontracts, in particular: - the types of subcontracts that will be concluded with successful tenderers (in particular whether a framework agreement with multiple economic operators will be used or not); - describes the arrangements for intellectual property rights - describes the arrangements for liability for damages; (iv) Step 2: make an evaluation of the tenders ranking them, on the basis of the common tender specifications (see above), according to best value for money criteria and ensuring that the price corresponds to market conditions; (v) Step 3: award the subcontracts to a minimum of three tenderers offering best value for money and a price corresponding to market conditions.] (c) For the ‘contract implementation stage’: (i) monitor that the PPI innovative solutions are implemented compliance with the objectives of the action set out in Annex 1; (ii) ensure compliance with the planning of resources set out in Annex 1 and the estimated budget indicated in Annex 2. (iii) ensure payment of the subcontractors. The beneficiaries concerned must ensure that [the Agency] the Commission, the European Court of Auditors (ECA) and the European Anti-Fraud Office (OLAF) can exercise their rights under Articles 22 and 23 also towards the subcontractors. 13.1.2 In addition, the beneficiaries concerned must ensure that their obligations under Articles 17.1 18, 34, 35, 36, 37, 38, 39 and 46 also apply to the subcontractors. Beneficiaries acting as contracting authorities within the meaning of Directive 2004/18/EC or as contracting entities within the meaning of Directive 2004/17/EC must comply with the applicable national law on public procurement. The beneficiaries concerned must also ensure that every prior information notice, contract notice or contract award notice published in relation to the subcontracting includes the following disclaimer: ‘This procurement receives funding under the European Union’s Horizon 2020 research and innovation programme under the grant agreement No [number]). The EU is however not participating as a contracting authority in this procurement.’] 29 Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public work contracts, public supply contracts and public service contracts (OJ L 134, 30.4.2004, p. 114).. 30 Directive 2004/17/EC of the European Parliament and of the Council of 31 March 2004 coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors (OJ L 134, 30.4.2004, p. 1). 32 See Articles 28 and 31(2)(a) of Directive 2004/18 and Article 40(3)(b) of Directive 2004/17/EC. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 590 1. PPI subcontracting For PPI Cofund actions, the beneficiaries award PPI subcontracts for procuring the innovative solutions (‘PPI innovative solution(s)’) necessary to address the ‘common challenge’ set out in Annex 1. (‘PPI subcontract’ thus means a contract for the purchase of innovative solutions that is identified in Annex 1 as an action task.) The requirements for PPI subcontracting are generally similar as for PCP subcontracting. However, PPI subcontracting has the following specificities: There is no requirement to split the PPI procurement procedure in phases. Moreover, the buyers group may select one or more subcontractors. The common challenge does NOT concern R&D services, but the supply of innovative goods or services. The buyers group acts as a launch customer (‘early adopter’) of innovative solutions that are not yet available on a large-scale commercial basis. PPI cannot include the procurement of R&D. Only procurement procedures that do not involve the procurement of R&D can be used for PPI (e.g. innovation partnership procedure). Each PPI Cofund action focuses on one concrete common challenge and requires innovative solutions that are to a significant extent similar across countries, making it sensible to procure them jointly (i.e. the core functionality and performance characteristics must be the same; there may be additional ‘local’ functionalities — due to differences in the local context of each individual procurer). Also, there is a common budget for the procurement (‘common jointly-committed budget’) only if the buyers group would like to centralise payments. Each buyer may alternatively manage a separate budget for the innovative solutions it buys. Finally, the subcontracts are not necessarily signed by the lead procurer; there is not necessarily a framework agreement. The buyers group may choose between direct subcontracts or a framework agreement with specific contracts (with each selected subcontractor). The buyers group may mandate the lead procurer — in the joint procurement agreement — to sign the framework agreements and/or the specific contracts/direct subcontracts. If there is no mandate, the general rule is that:  framework agreement(s) must be signed by all members of the buyers group together  specific contracts must be signed by each buyer individually (for the innovative solution(s) it buys). PPI subcontracting is not restricted to a limited part of the action (since the PPI subcontracting is the main goal of PPI Cofund actions). There can be only one PPI, per PPI Cofund action. 2. Additional eligibility condition: Procurers, tasks and costs set out in Annexes 1 and 2 — No simplified approval procedure Annexes 1 and 2 must clearly identify the common challenge (type of innovative solutions to be procured), the lead procurer, the buyers group, and the estimated costs per beneficiary, already at the moment of the signature of the GA. Any changes at a later stage (e.g. after the preparation stage of the project) are only possible through an amendment; see Article 55). Article 13.1 contains both additional cost eligibility conditions (in Article 13.1.1) and ‘other obligations’ (in Article 13.1.2). . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 591 At the end of the preparation stage of the project, the consortium must confirm (in the periodic report; see Article 20.3) that lead procurer has not changed and that the buyers group’s commitments to the budget for carrying out the PPI are still valid (or whether changes are needed, based on the feedback of the preparation stage of the project (e.g. the open market consultation)). For PPI subcontracting, there is NO ‘simplified approval procedure’ (contrary to the subcontracting of related additional coordination and networking activities; see Article 13.2). 3. Additional eligibility condition: Procurement procedure — Best value for money — Price corresponding to market conditions Like for PCP subcontracts:  the beneficiaries must base the PPI subcontracts on the best price-quality ratio  the price must correspond to market conditions AND  a specific procurement procedure must be followed. The main elements of this procedure are as follows:  the buyers group and lead procurer must formalise the PPI in a joint procurement agreement that:  specifies the working arrangements (e.g. division of tasks between the lead procurer and the buyers group; use of a framework agreement or not; signature of subcontracts, etc.)  sets out the financial arrangements (e.g. budget for the procurement committed per member of the buyers group; arrangements for financial transfers — if any — between members of the buyers group and/or lead procurer for carrying out the PPI)  specifies in-kind contributions provided by linked third parties  sets out other rights and obligations of the buyers group and lead procurer (e.g. IPR-related rights, commitments to provide test environments)  the procurement must normally be preceded by an ‘open market consultation’ (— unless the PPI is limited to procuring a limited set of prototypes or test products resulting from a previous PCP Cofund action carried out by the same procurers). The open market consultation must be implemented as a ‘technical dialogue’ as defined in the EU public procurement 2004/17/EC and 2004/18/EC. A prior information notice (PIN) must be published in the Official Journal of the European Union and must be promoted widely, in particular via the websites specified by the Commission/Agency and the National Contact Points (NCPs) for Horizon 2020. The PIN must contain information on:  the expected launch date for the call for tender This date must give potential tenderers sufficient time to adapt their production chain to reach the required functionality or performance requirements. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 592  whether verification of the market’s readiness to deliver the requested quality/price (e.g. via conformance testing, certification or quality labelling of solutions) is planned before committing to procure and, if so, at what point in the process.  the buyers group and the lead procurer must prepare ‘common procurement specifications’ The specifications must be based on an analysis of the buyers group’s needs (i.e. the common challenge) and — if there was an open market consultation — take into account the feedback from that consultation. They must describe the functionality and performance requirements that solutions must meet, rather than prescribing a specific solution.  the buyers group and the lead procurer must publish a contract notice to launch the request for tenders (— unless the PPI is limited to procuring a limited set of prototypes or test products resulting from a previous PCP Cofund action carried out by the same procurers) The request for tenders should specify the arrangements for intellectual property rights (see below) and the buyers’ right to publish summaries of the results and the subcontractors’ identities. The request for tenders does not have to be published. It can be provided on request. For PPI limited to procuring a limited set of prototypes or test products resulting from a previous PCP Cofund action carried out by the same procurers, a request for offers from at least 3 providers (including the providers that successfully completed the last PCP phase in the PCP Cofund action) suffices.  the buyers group and the lead procurer must jointly evaluate the tenders and make a joint award decision. In case of framework contracts/agreements, there may be multiple award decisions for different specific contracts that may be taken at the appropriate points in time during the framework contract/agreement by the procurers concerned. Example: for contracts with a number of phases (such as design and build contracts) or contracts where different parts of the solution corresponding to different lots that need to be deployed at different times and/or by different procurers. Beneficiaries have to demonstrate — upon request — that the selection of the subcontractor complied with these rules. 4. Additional eligibility condition: Minimum content of subcontracts The beneficiaries must conclude subcontract(s) that specify:  the practical set-up of the implementation of the subcontracts, in particular:  the process for monitoring of on-going work and reporting obligations of subcontractors  the role and the rights and obligations of third parties involved in the PPI For more information on the tender documents, see the Guidance — How to complete your simap forms for PPIs and the template for PPI request for tenders. The template is not mandatory; beneficiaries may use their own model, provided that it fulfils the minimum conditions laid down in the grant agreement and it contains at least the information detailed in the template. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 593  the procedures for accounting and payments  an exclusion of contract renegotiations  the minimum requirements that subcontractors must comply with during the PPI implementation, in particular:  implementation of the innovative solutions in accordance with the objectives of the action  additional national requirements, ethical and/or security requirements (if applicable)  the arrangements for intellectual property rights (IPRs), in particular:  the ownership by the subcontractor(s) of the intellectual property rights on the results they generate — except in duly justified cases (e.g. if the party that produced the results is not able to exploit them) The intellectual property provisions described here are the minimum requirements that must be respected. Beneficiaries may — if appropriate — specify additional intellectual property provisions (e.g. regarding access to background, licensing etc.) if these:  do not conflict with their obligations under other Articles and  maximise the incentives for both beneficiaries and subcontractors to use, widely exploit and commercialise the results  the right of the buyers to publish:  at the time of the contract award notice: the identity of the winning tenderer(s) and a project summary provided by the winning tenderer(s)  after the contract(s) has(have) finished (and after consulting the subcontractor(s)): summaries of the results as well as the identities of the subcontractor(s)  the specific conditions for each buyer, in particular:  details of the innovative solutions purchased by each buyer  quantity and  price. If the beneficiaries choose a framework agreement with specific contracts (for the innovative solutions procured by each buyer), the specific conditions for each buyer must be in the specific contracts (and the rest in the framework agreement). 5. Additional eligibility condition: Compliance with the planning of resources To ensure compliance with the resource planning (as set out in Annex 1), the beneficiaries must ensure the timely allocation of resources in order to implement the PPI (including allocating sufficient time and resources for testing solutions in real-life operational end-user environments). Example: testing facilities or equipment to be provided by the buyers group (or other beneficiaries or third parties). 6. ‘Other obligation’: Compliance with national procurement rules H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 594 Contrary to PCP, the EU public procurement Directives 2004/17/EC, 2004/18/EC and 2009/81/EC (— or any EU legislation that replaces these Directives131) normally apply to PPI procurements. Therefore, the beneficiaries that are ‘contracting authorities’ or ‘contracting entities’ (within the meaning of Directives 2004/18/EC and 2004/17/EC132; see Article 13 H2020 General MGA) must — like in the General MGA — also comply with the applicable national law on public procurement. 131 See Directives 2014/24/EU and 2014/25/EU. 132 Directive 2009/81/EC uses the definitions of Directives 2004/17/EC and 2004/18/EC (see Article 1(17) of Directive 2009/81/EC). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 595 1. Subcontracting of related additional coordination and networking activities For the subcontracting of related additional coordination and networking activities, the same rules apply as in the General MGA (see Article 13 H2020 General MGA). 13.2 Rules for subcontracting of related additional coordination and networking activities 13.2.1 If necessary to implement the action, the beneficiaries may award subcontracts for the ‘related additional coordination and networking activities’ described in Annex 1. The beneficiaries must award the subcontracts ensuring the best value for money or, if appropriate, the lowest price. In doing so, they must avoid any conflict of interests (see Article 35). [OPTION: In addition, if the value of the subcontract to be awarded exceeds EUR […], the beneficiaries must comply with the following rules: […]. 35 ] The tasks to be implemented and the estimated cost for each subcontract must be set out in Annex 1 and the total estimated costs of subcontracting per beneficiary must be set out in Annex 2. The [Commission][Agency] may however approve subcontracts not set out in Annex 1 and 2 without amendment according to Article 55, if: - they are specifically justified in the periodic or final technical report, and - they do not entail changes to the Agreement which would call into question the decision awarding the grant or breach the principle of equal treatment of applicants. [OPTION for classified deliverables: Classified deliverables may be subcontracted only after explicit approval (in writing) from the [Commission][Agency] (see Article 37).] The beneficiaries must ensure that [the Agency,] the Commission, the European Court of Auditors (ECA) and the European Anti-Fraud Office (OLAF) can exercise their rights under Articles 22 and 23 also towards their subcontractors. 13.2.2 In addition, the beneficiaries must ensure that their obligations under Articles 35, 36, 38, and 46 also apply to the subcontractors. Beneficiaries acting as contracting authorities within the meaning of Directive 2004/18/EC or as contracting entities within the meaning of Directive 2004/17/EC must comply with the applicable national law on public procurement. 13.3 Consequences of non-compliance If a beneficiary breaches any of its obligations under Article 13.1.1 or 13.2.1, the costs related to the subcontract concerned will be ineligible (see Article 6) and will be rejected (see Article 42). If a beneficiary breaches any of its obligations under Article 13.1.2 or 13.2.2, the grant may be reduced (see Article 43). Such breaches may also lead to any of the other measures described in Chapter 6. 35 If the authorising officer decides to set specific rules, they should have due regard for the principle of proportionality taking into account the value of the contracts and the relative size of the EU contributions in relation to the total cost of the action and the risk. Specific rules must be based on the rules contained in the Financial Regulation. Simply citing the FR without specifying the applicable provisions should be avoided. Specific rules may only be set for the award of contracts of a value higher than EUR 60 000. The authorising officer may set a threshold higher than EUR 60 000 on the basis of a risk assessment. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 596 ARTICLE 19 — SUBMISSION OF DELIVERABLES ARTICLE 19 — SUBMISSION OF DELIVERABLES 19.1 Obligation to submit deliverables The coordinator must submit: - 5 days before its publication: a copy of the prior information notice (PIN) (see Article 13); - 30 days before its publication: a copy of the contract notice (see Article 13); - at the end of the tender evaluation [OPTION for PCP: (and after the intermediate evaluations that precede the start of each new PCP phase (see Article 13))]: (i) information on the total number of bids received, in particular the data on the winning tenderer(s) and abstracts of the winning tenders, for publication and evaluation purposes; (ii) information on the evaluation of tenders: the final ranking list of the selected projects, final scores and qualitative assessment per evaluation criterion for each received bid, minutes of the evaluation meeting; (iii) [OPTION for PCP: assessment by the buyers group of the results achieved by each participating tenderer in the previous PCP phase (not applicable to the initial evaluation of tenders at the start of the PCP);] - [OPTION by default (two pre-financing payments): the coordinator must submit in month [Y] a progress report containing: - a ‘periodic summary technical report’ for publication by the [Commission][Agency]; - an overview of the progress towards the objectives of the action, including milestones and deliverables identified in Annex 1. This report must include explanations justifying the differences between work expected to be carried out in accordance with Annex 1 and that actually carried out;] [OPTION in case of three pre-financing payments: not applicable;] - at the end of the action: information on each subcontract financed by the procurement, including data on each contractor that participated in the procurement, an overview of the results for publication and evaluation purposes. This must include an assessment by the buyers group, based on the validation of solutions, of the final results of each participating tenderer in terms of achieving the performance and functionality requirements of the initial tender specifications; - any other deliverables identified in Annex 1, in accordance with the timing and conditions set out in it. [In addition, the beneficiaries must: - [OPTION for PCP: at the end of the action: give a demonstration to the [Commission][Agency] of the test products resulting from the procured research and development services.] - [OPTION for PPI: at the end of the action: give a demonstration to the [Commission][Agency] of the innovative solution(s).]] 19.2 Consequences of non-compliance If the coordinator breaches any of its obligations under this Article, the [Commission][Agency] may apply any of the measures described in Chapter 6. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 597 1. Deliverables: Information on the total number of bids received — Information on the evaluation of tenders — Information on each subcontract financed When & What? For PCP-PPI Cofund actions, the coordinator must — after the end of the tender evaluation (and, for PCP actions, also after each intermediate evaluation of each PCP phase) — submit to the Commission/Agency:  data on the total number of bids received  the evaluation of tenders and its outcome (including the winning tenderer(s) and abstracts of the winning tenders)  an assessment of the buyers group of the results achieved by each participating tenderer in the previous PCP phase. The beneficiaries will be contacted about the format to be used and details on how to submit the deliverables. This information must be updated by the coordinator at the end of the action, by submitting a list of all subcontracts financed (together with data on each contractor that participated in the procurement and overview of the results). How? The information must be submitted via in the Participant Portal (see Article 52). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 598 ARTICLE 20 — REPORTING — PAYMENT REQUESTS ARTICLE 20 — REPORTING — PAYMENT REQUESTS 20.1 Obligation to submit reports The coordinator must submit to the [Commission][Agency] (see Article 52) the reports set out in this Article. These reports include the requests for payments and must be drawn up using the forms and templates provided in the electronic exchange system (see Article 52). 20.2 Reporting periods [OPTION by default (two pre-financing payments): The action is divided into the following ‘reporting periods’: - RP1: from month 1 to month [X47] - RP2: from month [X+1] to [the last month of the project]] [OPTION in case of three pre-financing payments: The action is divided into the following ‘reporting periods’: - RP1: from month 1 to month [X48] - RP2: from month [X+1] to month [Y] - RP3: from month [Y+1] to [the last month of the project]] 20.3 Periodic reports — Requests for second [and third] pre-financing payment[s] The coordinator must submit a periodic report within 60 days following the end of the first reporting period. The periodic report must include the following: (a) a periodic technical report containing: (i) an explanation of the work carried out by the beneficiaries; (ii) an overview of the progress towards the objectives of the action, including milestones and other deliverables identified in Annex 1. This report must include explanations justifying the differences between work expected to be carried out in accordance with Annex 1 and that actually carried out. The report must also detail the exploitation and dissemination of the results and — if required in Annex 1 — an updated ‘plan for the exploitation and dissemination of the results’; [OPTION for providing access to trans-national access to research infrastructure: The report must detail the access activity, indicating the members of the selection panel, the selection procedure, the exact amount of access provided to the user groups, the description of their work, and information on the users (including names, nationality and home institutions);] [OPTION for providing access to virtual services: The reports must detail the access activity, with statistics on the virtual access provided in the period, including quantity, geographical distribution of users and, whenever possible, information/statistics on scientific outcomes (publications, patents, etc.) acknowledging the use of the infrastructure;] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 599 (iii) a summary for publication by the [Commission][Agency]; (iv) the answers to the ‘questionnaire’ covering issues related to the action implementation and the economic and societal impact, notably in the context of the Horizon 2020 key performance indicators and the Horizon 2020 monitoring requirements. (b) call for tender documents, including the contract notice, invitation to tender, procurement contracts; (c) a report on the outcome of the preparation phase of the procurement (e.g. the open market consultation) and their impact on the call for tender; (d) from each beneficiary participating in the joint procurement, a formal and duly signed ‘commitment on availability of resources’ (see Annex 11), and (e) a ‘statement on the use of the first pre-financing instalment’ (see Annex 12), including the request for a second pre-financing payment. The coordinator must certify that the information provided is full, reliable and true; and it can be substantiated by adequate supporting documentation (see Article 18) that will be produced upon request (see Article 17) or in the context of checks, reviews, audits and investigations (see Article 22). [OPTION in case of three pre-financing payments: The coordinator must submit a periodic report within 60 days following the end of the second reporting period. The periodic report must include the following: (a) a periodic technical report (see point (a) above) and (b) a statement on the use of the second pre-financing instalment (see Annex 8), including the request for a third pre-financing payment. The coordinator must certify that the information provided is full, reliable and true; and it can be substantiated by adequate supporting documentation (see Article 18) that will be produced upon request (see Article 17) or in the context of checks, reviews, audits and investigations (see Article 22).] 20.4 Final report — Request for payment of the balance The coordinator must submit the final report within 60 days following the end of the last reporting period. The final report must include the following: (a) a ‘final technical report’ with a summary for publication containing: (i) an overview of the results and their exploitation and dissemination; (ii) the conclusions on the action, and (iii) the socio-economic impact of the action; (b) a ‘final financial report’ containing: (i) an ‘individual financial statement’ (see Annex 4) from each beneficiary [and from each linked third party], for all reporting periods. The individual financial statement must detail the eligible costs (actual costs, unit costs and flat-rate costs; see Article 6) for each budget category (see Annex 2). The beneficiaries [and linked third parties] must declare all eligible costs, even if — for actual costs, unit costs and flat-rate costs — they exceed the amounts indicated in the estimated budget (see Annex 2). Amounts which are not declared in the individual financial statement will not be taken into account by the [Commission][Agency]. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 600 1. Reports When & What? For PCP-PPI Cofund actions, the coordinator has to submit — after the first reporting period (and, if there are three pre-financing payments, also after the second reporting period) — a periodic technical report with information on the technical implementation. NO financial reporting during the action (i.e. no financial statements before the final report). The coordinator only has to sign and submit a 'statement on the use of the previous pre- financing instalment' (which includes also the request for further pre-financing payments; see Annex 12) At the end of the action, the coordinator has to submit a final report, with both a technical and a financial part. 2. Reporting periods The individual financial statements must also detail the receipts of the action (see Article 5.3.3). Each beneficiary [and each linked third party] must certify that: - the information provided is full, reliable and true; - the costs declared are eligible (in particular, that the costs for subcontracts comply with the conditions in Article 13); - the costs can be substantiated by adequate records and supporting documentation (see Article 18) that will be produced upon request (see Article 17) or in the context of checks, reviews, audits and investigations (see Article 22), and - all the receipts have been declared (see Article 5.3.3); (ii) an explanation of the use of resources and the information on subcontracting (see Article 13) and in-kind contributions provided by third parties (see Articles 11 and 12) from each beneficiary [and from each linked third party; (iii) [OPTION if the JRC is a beneficiary: information on the amount of payment of the balance to be paid by the [Commission][Agency] to the Joint Research Centre (JRC);][OPTION: not applicable;] (iv) a ‘summary financial statement’ (see Annex 4), created automatically by the electronic exchange system, consolidating the individual financial statements and including the request for payment of the balance; (v) a ‘certificate on the financial statements’ (drawn up in accordance with Annex 5) for each beneficiary [and for each linked third party], if it requests a total contribution of EUR 325 000 or more, as reimbursement of actual costs and unit costs calculated on the basis of its usual cost accounting practices (see Article 5.2 and Point B.1 of Article 6.2). […] 47 Month X should be the end of the preparation phase and submission of second pre-financing request. 48 Month X should be the end of the preparation phase and submission of second pre-financing request. 4 Month X should be the end of the preparation phase and submission of second pre-financing request. 42 Month X should be the end of the preparation phase and submission of second pre-financing request. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 601 Normally, PCP-PPI Cofund actions are divided into two reporting periods (with two pre-financing payments; see Article 21). The first reporting period corresponds to the action’s preparation stage (preparation of the joint procurement); the second reporting period corresponds to the action’s execution stage (execution and follow-up of the joint procurement). Actions will exceptionally be divided into three reporting periods (with three pre-financing payments), if the Commission/Agency has insufficient payment credits to pay the entire amount as a second pre-financing payment. The first (and, if there are two pre-financing payments, also the second) reporting period triggers a periodic report. 3. Periodic reports: Call for tender documents — Report on the outcome of the preparation phase — Commitment on availability of resources — Statement on the use of the previous pre-financing instalment — Request for a further pre-financing payment The coordinator must submit — as part of the periodic report —:  the call for tender documents and  a report on the outcome of the preparation phase. In addition, the periodic report must include:  for each member of the buyers group: a formal and signed commitment on availability of resources needed to pay the subcontracts (see Annex 11) This ensures that the PCP/PPI subcontracting costs are covered.  a ‘statement on use of the previous pre-financing instalment (see Annex 12). This statement includes the request for a further pre-financing payment (only the first pre- financing payment is automatic). It is moreover used to calculate the amount of the next pre-financing payment (see Article 21). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 602 ARTICLE 21 — PAYMENTS AND PAYMENT ARRANGEMENTS ARTICLE 21 — PAYMENTS AND PAYMENT ARRANGEMENTS 21.1 Payments to be made The following payments will be made to the coordinator: - a first pre-financing payment; - a second pre-financing payment, on the basis of the request for a second pre-financing payment (see Article 20); - [a third pre-financing payment, on the basis of the request for a third pre-financing payment (see Article 20);] - one payment of the balance, on the basis of the request for payment of the balance (see Article 20) 21.2 Pre-financing payments — Amount — Amount retained for the Guarantee Fund The aim of the pre-financing is to provide the beneficiaries with a float. It remains the property of the EU until the payment of the balance. The [Commission][Agency] will — within 30 days, either from the entry into force of the Agreement (see Article 58) or from 10 days before the starting date of the action (see Article 3), whichever is the latest — make a first pre-financing payment to the coordinator of EUR [insert amount (insert amount in words)], except if Article 48 applies. From this amount, an amount of EUR [insert amount (insert amount in words)], corresponding to 5 % of the maximum grant amount (see Article 5.1), is retained by the [Commission][Agency] and transferred into the ‘Guarantee Fund’. The [Commission][Agency] will — within 60 days after receiving the request (see Article 20) — make a second pre-financing payment to the coordinator of EUR [insert amount (insert amount in words)] except if Articles 47 or 48 apply. [OPTION in case of three pre-financing payments: The [Commission][Agency] will — within 60 days after receiving the request (see Article 20) — make a third pre-financing payment to the coordinator of EUR [insert amount (insert amount in words)], except if Articles 47 or 48 apply.] If the statement on the use of the previous pre-financing instalment shows that less than 70 % of the previous instalment paid has been used to cover the costs of the action, the amount of the new pre-financing to be paid will be reduced by the difference between the 70 % threshold and the amount used. [OPTION if the JRC is a beneficiary: The parts of the pre-financing payments related to the Joint Research Centre (JRC) ([insert amounts (insert amounts in words)] are not paid to the coordinator, but kept by the [Commission][Agency] for the JRC.] 21.3 Interim payments — Amount — Calculation Not applicable […] 21.5 Notification of amounts due When making payments, the [Commission][Agency] will formally notify to the coordinator the amount due, specifying whether it concerns the second [or third] pre-financing payment or the payment of the balance. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 603 1. Payments — No interim payments Normally, PCP-PPI Cofund actions are divided into two reporting periods (see Article 20.2) with two pre-financing payments (— unless the action is exceptionally divided into three reporting periods with three pre-financing payments because of insufficient payment credits). There are NO interim payments, but the second pre-financing payment (after the end of the first reporting period, i.e. after the evaluation of the preparation stage of the PCP/PPI procurement) provides beneficiaries with the necessary funds to launch the PCP/PPI procurement. The second (or third) pre-financing payment is NOT automatic but must be requested by the coordinator via a ‘statement on the use of the first (or second) pre-financing payment’ (see Article 20). The balance is paid when the action ends. 2. Amount of pre-financing payments How much? Typically, the amounts of the pre-financing payments for PCP-PPI Cofund actions are as follows:  the first pre-financing payment amounts to the percentage of the maximum grant amount (see Article 5.1) that is foreseen for the related additional networking and coordination activities related to the preparation of the call for tender  the second pre-financing payment is a maximum of 90% (general limit for pre-financing payments; see Article 21.2 H2020 General MGA) minus the amount of the first pre- financing payment). If the GA provides for a third pre-financing payment, the amounts will be adapted. The second/third pre-financing payment will be reduced, if — according to the statement on use of the previous pre-financing instalment — the previous pre-financing was insufficiently used:  if 70% or more of the first/second pre-financing has been used: the second/third pre-financing is paid in full  if less than 70% of the first/second pre-financing has been used: the second/third pre-financing will be reduced by an amount equal to the difference between the percentage actually used and 70%. . For the payment of the balance, the notification will also specify the final grant amount. In the case of reduction of the grant or recovery of undue amounts, the notification will be preceded by the contradictory procedure set out in Articles 43 and 45. [...] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA PCP/PPI Cofund 604 ARTICLE 22 — CHECKS, REVIEWS, AUDITS AND INVESTIGATIONS — EXTENSION OF FINDINGS 1. Technical reviews For PCP-PPI Cofund actions, the Commission/Agency may in particular carry out technical reviews at key milestone points during the action (e.g. for PCP Cofund actions, at the transition from one PCP phase to the next). ARTICLE 22 — CHECKS, REVIEWS, AUDITS AND INVESTIGATIONS — EXTENSION OF FINDINGS 22.1 Checks, reviews and audits by the [the Agency and the] Commission […] 22.1.2 Right to carry out reviews The [Agency or the] Commission may — during the implementation of the action or afterwards — carry out reviews on the proper implementation of the action (including assessment of deliverables and reports), compliance with the obligations under the Agreement and continued scientific or technological relevance of the action. Reviews may be started up to two years after the payment of the balance. They will be formally notified to the coordinator or beneficiary concerned and will be considered to have started on the date of the formal notification. If the review is carried out on a third party (see Articles 10 to 16), the beneficiary concerned must inform the third party. The [Agency or the] Commission may carry out reviews directly (using its own staff) or indirectly (using external persons or bodies appointed to do so). It will inform the coordinator or beneficiary concerned of the identity of the external persons or bodies. They have the right to object to the appointment on grounds of commercial confidentiality. The coordinator or beneficiary concerned must provide — within the deadline requested — any information and data in addition to deliverables and reports already submitted (including information on the use of resources). The [Agency or the] Commission may request beneficiaries to provide such information to it directly. The coordinator or beneficiary concerned may be requested to participate in meetings, including with external experts. For on-the-spot reviews, the beneficiaries must allow access to their sites and premises, including to external persons or bodies, and must ensure that information requested is readily available. Information provided must be accurate, precise and complete and in the format requested, including electronic format. On the basis of the review findings, a ‘review report’ will be drawn up. The [Agency or the] Commission will formally notify the review report to the coordinator or beneficiary concerned, which has 30 days to formally notify observations (‘contradictory review procedure’). Reviews (including review reports) are in the language of the Agreement. […] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA EJP Cofund 605 VII. EJP Cofund MGA VII.1 Background information and approach The EJP Cofund Model Grant Agreement is used for European Joint Programme Cofund actions only. The EJP Cofund MGA follows the General MGA for numbering and content, except for the following: The annotations will concentrate on differences in substance and interpretation that require explanation. Parts that differ only in presentation (e.g. Article 16, Annexes) will not be shown. By contrast, provisions that do not deviate from the General MGA, but that require clarification or a specific interpretation for EJP Cofund actions are added:  Article 2 (EJP Cofund actions)  Article 4.1 (EJP Cofund budget categories)  Article 6 (EJP Cofund eligible and ineligible costs)  Article 6.2.D.2 and F (Euratom Fusion EJP Cofund action durable equipment option and specific categories of costs)  Article 8 (EJP Cofund rules on third party involvement). The H2020 MGA EJP Cofund deviates from the General MGA as follows:  Article 3 (duration of EJP Cofund actions: 60 months)  Article 5.2 (EJP Cofund specific reimbursement rate)  Article 16 (provision on access to research infrastructures not applicable)  Article 19 (EJP Cofund specific deliverables)  Article 20.2, 20.2a, 20.3 (EJP Cofund specific reporting provisions)  Article 21.1, 21.2, 21.5 (EJP Cofund specific payment provisions)  Annex 7 Annual work plan for the next year  Annex 8 Model for the statement on the use of the previous pre- financing instalment H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA EJP Cofund 606 VII.2 H2020 MGA EJP Cofund: Annotations ARTICLE 2 — ACTION TO BE IMPLEMENTED [— COMPLEMENTARY GRANT] [— JOINTLY FUNDED ACTION] 1. EJP Cofund actions What? EJP Cofund funds:  a joint programme of activities by coordinated national research and innovation programmes (— ranging from research and innovation to coordination and networking activities and including training, dissemination and financial support to third parties). EJP does NOT fund individual projects or coordination networks. Normally, EJP Cofund grants are multi-beneficiary grants; exceptionally they can be mono- beneficiary grants for ‘sole participants’ (see General Annex D to the Main Work Programme). EJP Cofund actions are funded in all Parts of the H2020 Framework Programme and the Euratom Research and Training Programme (e.g. NFRP7–2015; Fusion programme Cofund action (FEJP) in section B.1 Euratom Work Programme 2014-2015). For more information on EJP Cofund actions, see the Online Manual and the H2020 grants fact sheets on the Participant Portal. For more information on the conditions for participation and funding, see the Online Manual or the General work programmes and the call and topics pages of the call. ARTICLE 2 — ACTION TO BE IMPLEMENTED [— COMPLEMENTARY GRANT] [— JOINTLY FUNDED ACTION ] The grant is awarded for the action entitled [insert title of the action] — [insert acronym] (‘action’), as described in Annex 1. [OPTION for complementary grants if foreseen in the work programme: The grant is a ‘complementary grant’ to [the grant agreement(s) under the call(s) for proposals [call identifier(s): H2020 — theme —]] [the following complementary grant agreement(s) No(s): - [insert number] [insert acronym] - [insert number] [insert acronym]].] [OPTION for joint actions (joint call with a third country or an international organisation): The action is a ‘jointly funded action’ which must be coordinated with the ‘joint action’ called [insert the name of the third country or international organisation action], as described in Annex 1.] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA EJP Cofund 607 ARTICLE 3 — DURATION AND STARTING DATE OF THE ACTION 1. Action duration For EJP Cofund actions, the action duration is normally 60 months. If implementation of the action is justifiably delayed, the consortium may request an extension (i.e. request an amendment extending the duration; see Article 55). The action’s duration can however NOT exceed 72 months. ARTICLE 3 — DURATION AND STARTING DATE OF THE ACTION The duration of the action will be 60 months as of [OPTION by default: the first day of the month following the date the Agreement enters into force (see Article 58)] [OPTION if needed for the action: [insert date]] 7 (‘starting date of the action’). 7 This date must be the first day of a month and it must be later than the date of entry into force of the agreement unless authorised otherwise by the authorising officer, if the applicant can demonstrate the need to start the action before the entry into force of the grant agreement or the need to start the action on another day than the first day of the month. In any case, the starting date should not be earlier than the date of the submission of the grant application, except in duly justified exceptional cases as provided for in the basic act and the work programme (Article 130 FR). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA EJP Cofund 608 ARTICLE 4 — ESTIMATED BUDGET AND BUDGET TRANSFERS 1. Budget categories The EJP Cofund MGA uses the same budget categories as the General MGA. Budget categories of the EJP Cofund MGA:  direct personnel costs  costs for employees (or equivalent)  costs for natural persons working under a direct contract  costs of personnel seconded by a third party against payment  costs for SME owners without salary  costs for beneficiaries that are natural persons without salary  direct costs of subcontracting  direct costs of providing financial support to third parties (if option applies)  other direct costs  travel costs and related subsistence allowances  equipment costs  costs of other goods and services  capitalised and operating costs of large research infrastructure  indirect costs  specific categories of costs (if option applies). Thus, the EJP Cofund MGA does NOT have:  personnel costs for providing trans-national access to research infrastructure. By contrast, for the FEJP action, there are three specific cost categories:  costs for mobility of personnel  costs for fellowships for researchers  access costs for research infrastructure. The budget categories are relevant for the estimated budget (Article 4 and Annex 2), forms of costs (Article 5), cost eligibility rules (Article 6.2) and the cost declarations (i.e. financial statements; Article 20 and Annex 4). . ARTICLE 4 — ESTIMATED BUDGET AND BUDGET TRANSFERS 4.1 Estimated budget The ‘estimated budget’ for the action is set out in Annex 2. It contains the estimated eligible costs and the forms of costs, broken down by beneficiary [(and linked third party)] and budget category (see Articles 5, 6, [and 14]). [OPTION to be used if Article 9 applies: It also contains the estimated costs of the beneficiaries not receiving EU funding (see Article 9).] […] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA EJP Cofund 609 ARTICLE 5 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATE AND FORMS OF COSTS ARTICLE 5 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATE AND FORMS OF COSTS […] 5.2 Form of grant, reimbursement rate and forms of costs The grant reimburses […]% 8 of the action’s eligible costs (see Article 6) (‘reimbursement of eligible costs grant’) (see Annex 2). The estimated eligible costs of the action are EUR [insert amount (insert amount in words)]. Eligible costs (see Article 6) must be declared under the following forms (‘forms of costs’): (a) for direct personnel costs [(excluding direct personnel costs covered by the unit cost under Point (f))] 9 : - as actually incurred costs (‘actual costs’) or - on the basis of an amount per unit calculated by the beneficiary in accordance with its usual cost accounting practices (‘unit costs’). Personnel costs for SME owners or beneficiaries that are natural persons not receiving a salary (see Article 6.2, Points A.4 and A.5) must be declared on the basis of the amount per unit set out in Annex 2 (unit costs); (b) for direct costs of subcontracting [(excluding subcontracting costs covered by the unit cost under Point (f))] 10 : as actually incurred costs (actual costs); (c) for direct costs of providing financial support to third parties [(excluding costs of financial support covered by the unit cost under Point (f))] 11 : [OPTION to be used if Article 15 applies: as actually incurred costs (actual costs);][OPTION: not applicable;] (d) for other direct costs [(excluding other direct costs covered by the unit cost under Point (f))]12: as actually incurred costs (actual costs); (e) for indirect costs [(excluding indirect costs covered by the unit cost under Point (f))]13: on the basis of a flat-rate applied as set out in Article 6.2, Point E (‘flat-rate costs’); (f) [OPTION for specific unit costs (if foreseen by Commission decision and applicable to the grant): for [insert name of specific cost category(ies) 14 ]: on the basis of the amount(s) per unit set out in Annex 2 15 (unit costs).] [OPTION: specific cost category(ies): not applicable] […] 8 This must be the percentage (which can reach a maximum of up to 70%) foreseen in the work programme. 9 To be used only if option in Point (f) is used. 10 To be used only if option in Point (f) is used. 11 To be used only if option in Point (f) is used. 12 To be used only if option in Point (f) is used. 13 To be used only if option in Point (f) is used. 14 Insert precise name of the cost category (as in the Commission decision authorising the use of the unit cost/lump-sum). For example: 'access costs for providing transnational access to research infrastructures’; 'costs for clinical studies’; 'costs for energy efficiency measures in buildings’, 'costs for mobility of personnel’, 'costs for fellowships for researchers’, ‘access costs for research infrastructure'. 15 Annex 2 must clearly show, for each beneficiary (and linked third party) concerned, all the parameters for the unit cost (i.e. the unit(s), the amount(s) per unit, the research installation/infrastructure for which it is used, the clinical study for which it is used, etc.). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA EJP Cofund 610 1. Reimbursement rate How much? For EJP Cofund actions, the reimbursement rate is fixed in the work programme/call. It cannot exceed 70%133. 2. Cost forms For EJP Cofund actions, the cost forms are the same as in the General MGA (i.e. actual costs, unit costs and flat rate costs; see Article 5 H2020 General MGA). For the FEJP action, there are however three specific unit costs as ‘specific cost categories’:  costs for mobility of personnel: daily subsistence allowance, monthly subsistence allowance and monthly family allowance  costs for fellowships for researchers: monthly living allowance, mobility allowance and family allowance  access costs for research infrastructure. 134 For this action, these unit costs replace the ‘specific cost categories’ of the General MGA (e.g. access costs for providing trans-national access to research infrastructures, costs of energy efficiency measures in buildings; see Article 5 H2020 General MGA). 133 See Article 28(5) of the Rules for Participation. 134 Available at http://ec.europa.eu/research/participants/data/ref/h2020/other/legal/unit_costs/unit- costs_fusion_en.pdf H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA EJP Cofund 611 ARTICLE 6 — ELIGIBLE AND INELIGIBLE COSTS 1. Specific conditions for costs to be eligible Article 6.2 refers to specific eligibility conditions applicable per budget category. The EJP Cofund MGA uses in principle the same budget categories (covering the same types of costs) as the General MGA and the same conditions for eligibility and rules for cost calculation apply (see Article 6 H2020 General MGA). For ease of reference, the annotations for Article 6.2 will be limited to this additional equipment cost option (Article 6.2.D.2) and the specific cost categories (Article 6.2.F) and summarise — for each of them — the information necessary to establish the eligible costs, i.e. 1. types of costs covered by the budget category 2. cost form under which the costs must be declared (i.e. actual costs, unit costs, flat rate) 3. conditions for eligibility 4. how the costs must be calculated. ARTICLE 6 — ELIGIBLE AND INELIGIBLE COSTS […] 6.2 Specific conditions for costs to be eligible Costs are eligible if they comply with the general conditions (see above) and the specific conditions set out below for each of the following budget categories: A. direct personnel costs; B. direct costs of subcontracting; C. [OPTION to be used if Article 15 applies: direct costs of providing financial support to third parties;] [OPTION: not applicable;] D. other direct costs; E. indirect costs; F. [OPTION for specific unit costs: [insert name(s) of specific cost category(ies)17]][OPTION: not applicable]. ‘Direct costs’ are costs that are directly linked to the action implementation and can therefore be attributed to it directly. They must not include any indirect costs (see Point E below). ‘Indirect costs’ are costs that are not directly linked to the action implementation and therefore cannot be attributed directly to it. […] 17 Insert precise name of the costs (as in the Commission decision authorising the use of the unit cost/ lump-sum). For example: ‘access costs for providing trans-national access to research infrastructure’; ‘costs for clinical studies’; ‘costs for energy efficiency measures in buildings’, ‘costs for mobility of personnel’, ‘costs for fellowships for researchers’, ‘access costs for research infrastructure’. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA EJP Cofund 612 1. Equipment costs: Types of costs — Cost form — Conditions for eligibility — Cost calculation This budget category applies to all to all EJP grants. D. Other direct costs [(not covered by Point F)] […] D.2 [OPTION by default: The depreciation costs of equipment, infrastructure or other assets (new or second-hand) as recorded in the beneficiary’s accounts are eligible, if they were purchased in accordance with Article 10.1.1 and written off in accordance with international accounting standards and the beneficiary’s usual accounting practices. The costs of renting or leasing equipment, infrastructure or other assets (including related duties, taxes and charges such as non-deductible value added tax (VAT) paid by the beneficiary) are also eligible, if they do not exceed the depreciation costs of similar equipment, infrastructure or assets and do not include any financing fees. The costs of equipment, infrastructure or other assets contributed in-kind against payment are eligible, if they do not exceed the depreciation costs of similar equipment, infrastructure or assets, do not include any financing fees and if the conditions in Article 11.1 are met. The only portion of the costs that will be taken into account is that which corresponds to the duration of the action and rate of actual use for the purposes of the action.] [OPTION (alternative to option above) to be used if foreseen in the work programme: The costs of purchasing equipment, infrastructure or other assets (new or second-hand) (as recorded in the beneficiary’s accounts) are eligible if the equipment, infrastructure or other assets was purchased in accordance with Article 10.1.1. The costs of renting or leasing equipment, infrastructure or other assets (including related duties, taxes and charges such as non-deductible value added tax (VAT) paid by the beneficiary) are also eligible, if they do not exceed the depreciation costs of similar equipment, infrastructure or assets and do not include any financing fees. The costs of equipment, infrastructure or other assets contributed in-kind against payment are eligible, if they do not exceed the depreciation costs of similar equipment, infrastructure or assets, do not include any financing fees and if the conditions in Article 11.1 are met.] [OPTION (in addition to one of the two options above) to be used in accordance with the Euratom work programme 2014-2018: The costs of purchasing equipment, infrastructure or other assets (new or second- hand) to be included in the JET facilities are eligible, if: (a) the equipment, infrastructure or other assets to be purchased and the beneficiary purchasing it are identified in Annex 1 and in the annual work plans approved by the Commission (see Article 19.1) (b) the costs of purchasing the equipment, infrastructure or other assets are capitalised or expensed by the beneficiary in accordance with international accounting standards and the beneficiary’s usual accounting practices, and (c) the equipment, infrastructure or other assets was purchased in accordance with Article 10.1.1.] […] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA EJP Cofund 613 An additional option for full purchase costs for equipment for JET facilities will be inserted into the GA for the Fusion programme EJP Cofund action (FEJP). As in the General MGA, the beneficiaries may normally declare the following types of equipment costs as ‘other direct costs - equipment costs’ (see Article 6.2.D.2 H2020 General MGA): one of the following: − either depreciation costs of equipment, infrastructure or other assets − or purchase costs of equipment, infrastructure or other assets (if option applies) AND: − costs of renting or leasing of equipment, infrastructure or other assets − costs of equipment, infrastructure or other assets contributed in-kind against payment. 1.1 Equipment costs: Cost of purchasing equipment, infrastructure or other assets to be included in the JET facilities 1.1.1 What? This budget category covers the full purchase costs of equipment, infrastructure or other assets to be included in JET facilities (not only the depreciation costs for the relevant periodic report). 1.1.2 Equipment costs must be declared as actual costs (see Article 5.2(d)). 1.1.3 The costs must comply with the following conditions for eligibility:  fulfil the general conditions for actual costs to be eligible (i.e. incurred during the action duration, necessary, linked to the action, recorded in the beneficiary’s accounts, etc.; see Article 6.1(a))  concern equipment, infrastructure or other assets (new or second-hand) to be included in JET facilities ‘JET’ means Joint European Torus, i.e. the experimental device for studying fusion relevant plasmas in operation at Culham, UK. ‘JET facilities’ include, in particular, the JET device and auxiliary facilities (such as the neutral beam test bed, the remote handling facility, and the active gas handling system).  be identified in Annex 1 and in the annual work plans approved by the Commission (see Article 19.1).  be capitalised or expensed by the beneficiary in accordance with international accounting standards and the beneficiary’s usual accounting practice  fulfil the additional cost eligibility conditions set out in Article 10.1.1. Costs of equipment, infrastructure or other assets (including depreciation costs) that are declared under this option, may not also be declared by another beneficiary or under another budget category. They may also not be declared under another EU or Euratom grant or contract (see also Article 6.5(b)). 1.1.4. There is no specific cost calculation method. The costs must correspond to the eligible costs actually incurred (i.e. the amount paid by the beneficiary for the supply of the equipment). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA EJP Cofund 614 1. Specific cost categories: Types of costs — Cost form — Conditions for eligibility — Cost calculation For this budget category, in principle the same rules apply as in the General MGA (see Article 6 H2020 General MGA). For the the Fusion programme EJP Cofund action (FEJP), the specific cost categories will be replaced by the three categories set out in Commission Decision C(2013) 8201135:  costs for mobility of personnel  costs for fellowships for researchers  access costs for research infrastructure. 1.1 ‘Specific cost category – costs for mobility of personnel’ 1.1.1 What? This budget category covers direct costs for FEJP secondments of personnel ( irrespective of their duration) to another research institution, in a location other than their normal place of employment (by providing for:  a daily subsistence allowance  a monthly subsistence allowance and  a monthly family allowance). 135 Available at http://ec.europa.eu/research/participants/data/ref/h2020/other/legal/unit_costs/unit- costs_fusion_en.pdf Costs that are declared as a specific unit may NOT be declared (a second time) under another budget category (for the costs that are covered, see below). . F. [OPTION: [Insert name of specific cost category(ies)]][OPTION if no specific cost categories applicable to grant: Specific cost category(ies)] [OPTION for specific unit costs (unit costs foreseen by Commission decision and applicable to the grant): [insert name of specific cost category 23 ] are eligible if they correspond to the amount per unit set out in Annex 2 multiplied by the number of actual units,[and if [insert additional eligibility conditions if any]].] [same for each specific cost category] [OPTION: not applicable] […] 23 Insert precise name of the costs (as in the Commission decision authorising the use of the unit cost). For example: ‘costs for clinical studies’; ‘costs for energy efficiency measures in buildings’, ‘costs for mobility of personnel’, ‘costs for fellowships for researchers’, ‘access costs for research infrastructure’. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA EJP Cofund 615 It may be used for secondments of personnel NOT employed by the beneficiary/linked third party but with a contract with full social security coverage. It may also be used for secondments of personnel provided in-kind by a third party free of charge. It may NOT be used for mobility costs for personnel contributed in-kind against payment (see below). What not? This budget category does not cover the salary costs of the seconded personnel, other direct costs for the mobility (e.g. extra costs incurred for the activities of the seconded persons) or direct costs for managing the mobility. Such costs can be declared under another budget category (i.e. ‘direct personnel costs’ or ‘other direct costs’; Article 6.2.A, 6.2.D). It also does not cover indirect costs for managing the secondments. Such costs can be declared under another budget category (i.e. ‘indirect costs’; Article 6.2.E). 1.1.2 The costs must be declared on the basis of the unit costs fixed by Commission Decision C(2013) 8201136 and set out in Annexes 2 and 2a of the GA (currently:  for the daily subsistence allowance: EUR 127.65, per individual per day This amount is subject to a ‘country-specific correction coefficient’ for the country (and in certain cases, the place) of the secondment (coefficient from 1 October 2013) (Belgium and Luxembourg = 100)137: Country/place Coefficient (%) Country/place Coefficient (%) Austria 106.4 Italy Italy Varese 104.2 93.4 Bulgaria 58.4 Croatia 80.0 Latvia 77.6 Cyprus 84.1 Lithuania 71.5 Czech Rep. 80.6 Malta 83.3 Denmark 135.3 Netherlands 105.3 Estonia 77.6 Poland 74.2 Finland 122.1 Portugal 83.5 France 117.7 Romania 68.8 Germany Germany Bonn Germany Karlsruhe Germany Munich 95.8 94.1 93.8 106.4 Slovakia 79.7 Slovenia 85.3 Spain 97.1 Sweden 131.9 136 Available at http://ec.europa.eu/research/participants/data/ref/h2020/other/legal/unit_costs/unit- costs_fusion_en.pdf 137 As set out in Regulation (EU) No 423/2014 of the European Parliament and of the Council of 16 April 2014 adjusting with effect from 1 July 2012 the remuneration and pensions of officials and other servants of the European Union and the correction coefficients applied thereto. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA EJP Cofund 616 Greece 90.5 Switzerland Geneva Switzerland Berne 124.6 123.3 Hungary 78.3 Ireland 110.6 United Kingdom UK Culham 147.8 112.5 To ensure purchasing power parity, revised coefficients (based on 1 October 2015 values) will be applied as from 1 January 2016. The FEJP GA will be amended and the Annotated MGA will be updated accordingly.  for the monthly subsistence allowance: between EUR 0 and 720.27 per individual per month — depending on the distance between the place where the individual was working before and the place of secondment Distance between place of employment and place of secondment (km) Monthly allowance (EUR) 0 – 150 0 > 150 82.05 > 300 145.86 > 500 237.05 > 800 382.92 > 1 300 601.73 > 2 000 720.27 This amount is subject to the country-specific correction coefficient (see above).  for the family allowance: EUR 258.81, per dependent child per month). The Commission may update these unit costs if the joint index based on inflation in Belgium and Luxembourg deviates from the 2014 baseline inflation index by 10 % or more. In this event, the FEJP GA will be amended and the Annotated MGA will be revised accordingly. As mentioned above, mobility costs for personnel contributed in-kind against payment must be declared as actual costs (of the beneficiary) under another budget category (i.e. ‘other direct costs’; see Article 6.2.D.1). Best practice: Beneficiaries and third parties should use the rates fixed by Commission Decision C(2013) 8201 for the mobility cost to be reimbursed to the third party and to pay this amount to the personnel (see Article 11.1). 1.1.3 The costs must comply with the following conditions for eligibility:  fulfil the general conditions for unit costs to be eligible (i.e. units used during the action duration, necessary, linked to the action, etc.; see Article 6.1(b))  be incurred for the secondment of personnel (employed by the beneficiary or made available as an in-kind contribution by a third party) to:  a location other than the seconded person’s place of employment and H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA EJP Cofund 617  one of the following:  an organisation where the researcher takes part in experiments using a research infrastructure of that organisation;  another beneficiary where the researcher carries out research activities described in Annex 1 or 7 or  a joint support unit created by the beneficiaries under the action  have been fully incurred for the benefit of the seconded personnel (i.e. fully paid to the individuals, including during annual leave, special leave, sick leave and holidays)  for the family allowance: be incurred for personnel accompanied during the secondment by dependent children (between 5 and 18 years), enrolled in regular full- time attendance at a primary or secondary school that charges tuition fees (registration and attendance fees). 1.1.4 They must be calculated as follows:  for the daily subsistence allowance: amount per unit (≈ EUR 127.65 x country coeff. corr.) x number of actual days of secondment ‘Day of secondment’ means each day of secondment that lasts more than 12 hours and is calculated as follows:  the base amount is the time between the departure time and the return time of the main form of transport used for the secondment  to this amount, add the following for each leg of the journey (outward and return):  for train travel: a maximum of 30 minutes for each leg  for air travel: a maximum of 2 hours for each leg. NO extra time is added if the journey is by any means of transport other than train or plane. Example: The seconded person leaves her/his normal place of employment on a flight departing at 9:35 on Monday 3 April and returns on a flight that arrives at 10:35 on Wednesday 5 April. This amounts to 3 days of secondment: Wednesday 5 April is also counted as exceeding 12 hours (00:00 until the flight arrival time of 10:35, plus 2 hours extra time = 12 hours 35 minutes).  for the monthly subsistence allowance: amount per unit (see table above x count. coef. corr.) x number of actual months of secondment  for the family allowance: amount per unit (EUR 252.81) x number of actual months of secondment x number of dependent children The family allowance is paid for each full month of secondment in which the dependent child is between 5 and 18 years. ‘Month of secondment’ means each full month of secondment (NO pro-rata payments for partial months of secondment). A ‘full month’ can be one of the following two:  a calendar month (e.g. 1 to 31 July inclusive) or H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA EJP Cofund 618  a month from the date the secondment starts until the same date the following month (excluding the last day, e.g. 3 July to 2 August). If a secondment starts on 31 January (or on 30 or 31 January in a leap year), it is considered to have been completed at midnight on 28 February (since there is never a 30 February and a 29 February only in leap years). Examples for calculating unit costs for mobility of personnel: 1. An employee with primary employment in Rome is seconded to the joint programme unit in Garching (Munich), Germany, from 1 January 2015 to 31 August 2016 (20 months). He is accompanied by one 6-year-old child, who is enrolled in a fee-paying primary school. Daily subsistence allowance: 609 days * EUR 127.65 = EUR 77 738.85 Monthly subsistence allowance: 20 months * EUR 382.92 (800< distance >1 300) = EUR 7 658.40 Subtotal = EUR 85 697.25 * correction coefficient of 106.4 % (Germany Munich) = EUR 91 181.87 Family allowance: 20 months * EUR 252.81 = EUR 5 056.20 Total declared unit costs: EUR 96 238.07 2. An employee with primary employment in Madrid is sent to a scientific project meeting at Culham, UK, for three days. Daily subsistence allowance: 3 days * EUR 127.65 = EUR 382.95 * correction coefficient of 112.5 % (Culham, UK) = EUR 430.82 Total declared unit costs: EUR 430.82 1.2 ‘Specific cost category – costs for fellowships for researchers’ 1.2.1 What? This budget category covers direct costs for FEJP researcher fellowships (by providing for  a monthly living allowance, with full social security coverage and unit costs (including all compulsory deductions) in accordance with applicable national legislation (gross amount)  a monthly mobility allowance to cover additional costs, e.g. relating to travel and accommodation and  a monthly family allowance to reduce family-related obstacles to researcher mobility). What not? This budget category does not cover the salary costs of the fellows, other direct costs for the mobility (e.g. extra costs incurred for the activities of the seconded persons) or direct costs for managing the fellowships. Such costs can be declared under another budget category (i.e. ‘direct personnel costs’ or ‘other direct costs’; Article 6.2.A, 6.2.D). It also does not cover indirect costs for managing the fellowships. Such costs can be declared under another budget category (i.e. ‘indirect costs’; Article 6.2.E). 1.2.2 The costs must be declared on the basis of the unit costs fixed by Decision C(2013) 8201138 and set out in Annexes 2 and 2a of the GA (currently:  for the living allowance: EUR 3 110 for early-stage researchers and EUR 4 650 for experienced researchers, per fellow per month This amount is subject to a ‘country-specific correction coefficient’ (based on the seven- year average of the relevant coefficient used between 2007 and 2013 for the FP7 Marie Skłodowska-Curie actions) 139: 138 Available at http://ec.europa.eu/research/participants/data/ref/h2020/other/legal/unit_costs/unit- costs_fusion_en.pdf 139 As set out in H2020 Work Programme 2014-2015- 3. Marie Skłodowska-Curie Actions (MSCA) (p.53-54) H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA EJP Cofund 619 Country Coefficient Country Coefficient Austria 104.8 % Italy 106.7 % Belgium 100.0 % Lithuania 73.1 % Bulgaria 71.5 % Luxembourg 100.0 % Cyprus 91.8 % Latvia 75.9 % Czech Republic 83.8 % Malta 89.6 % Germany 98.8 % Netherlands 104.3 % Denmark 135.3 % Poland 76.4 % Estonia 78.3 % Portugal 89.1 % Greece 92.7 % Romania 68.3 % Spain 97.6 % Sweden 111.7 % Finland 116.6 % Slovenia 86.1 % France 111.0 % Slovakia 82.6 % Croatia 97.5 % United Kingdom 120.3 % Hungary 76.2 % Ireland 113.5 % Switzerland 113.1 %  for the mobility allowance: EUR 600, per fellow per month  for the family allowance: EUR 500, per fellow per month). 1.2.3 The costs must comply with the following conditions for eligibility:  fulfil the general conditions for unit costs to be eligible (i.e. units used during the action duration, necessary, linked to the action, etc.; see Article 6.1(b))  be incurred for fellowships for (early-stage or experienced) researchers that are recruited under an employment contract or equivalent contract with full social security coverage that complies with the applicable social security legislation140 ‘Early-stage researchers’ means researchers that are — at the time of recruitment by the host organisation — in the first four years (full-time-equivalent research experience) of their research careers and have not been awarded a doctoral degree. ‘Experienced researchers’ means researchers that have a doctoral degree or at least four years of full-time-equivalent research experience.  have been fully incurred for the benefit of the fellows (i.e. fully paid to the individuals)  for the family allowance: be incurred for fellows that have a family at the time of the recruitment 140 Council Regulation (EC) No 883/2004 of 29 April 2004, as amended by Regulation (EC) No 988/2009 of the European Parliament and of the Council of 16 September 2009, Commission Regulation (EU) No 1244/2010 of 9 December 2010 (OJ L 200, 7.6.2004, p. 1). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA EJP Cofund 620 ‘Family’ means persons linked to the researcher by marriage (or a relationship with equivalent status to a marriage recognised by the legislation of the country where the relationship was formalised) or dependent children who are being actually maintained by the researcher. 1.2.4 They must be calculated as follows:  for the living allowance: amount per unit (≈ EUR 3 110/4 650 (x count. coef. corr.) x number of months actually spent by the fellows on the research training activities  for the mobility allowance: amount per unit (EUR 600) x number of months actually spent by the fellows on the research training activities  for the family allowance: amount per unit (EUR 500) x number of months actually spent by the fellows on the research training activities These are calculated per individual per complete month (NO pro-rata payments). Example for calculating unit costs for researchers fellowships: A Belgian early-stage researcher with no family is starting a fellowship in Finland for 18 months as part of a PhD programme. Living allowance: 18 months * EUR 3 110 = EUR 55 980 * correction coefficient of 116.6 % (Finland) = EUR 65 272.68 Mobility allowance: 18 months * EUR 600 = EUR 10 800 No family allowance Total declared unit costs: EUR 76 072.68 1.3 ‘Specific category – access costs for research infrastructure’ 1.3.1 What? This budget category covers direct and indirect access costs for providing FEJP access to research infrastructure (i.e. equipment and running costs of the installation and the costs for logistical, technological and scientific support to users’ access, including costs for ad-hoc training needed by users to use the installation and for preparatory and closing activities needed to work on the installation). It may also be used for access to infrastructure provided by a third party free of charge. It may NOT be used for infrastructure contributed in-kind against payment (see below). What not? Travel and subsistence costs for users to get access are not included in the access costs. (These costs can be reimbursed separately, as ‘other direct costs’; see Article 6.2.D.1). 1.3.2 If they are declared under this budget category, these costs must be declared on the basis of the unit cost calculated in accordance with Decision C(2013) 8201141 and set out in Annexes 2 and 2a of the GA. The precise unit cost is not pre-fixed by the Decision; it must be established for each access provider and installation — before signature of the FEJP GA. The ‘unit of access’ to the installation must be identified (i.e. the unit used to measure the total quantity of access that the installation provides to its users) 141 Available at http://ec.europa.eu/research/participants/data/ref/h2020/other/legal/unit_costs/unit- costs_fusion_en.pdf H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA EJP Cofund 621 The ‘amount per unit of access’ (EUR/unit of access) must be calculated according to the following formula: Amount per unit = average annual total access cost (over past two years142) average annual total quantity of access (over past two years143) The averages must be based on:  the beneficiary’s certified or auditable historical data  costs allocated to the installation according to the beneficiary’s usual cost accounting practices and  a period excluding times when the installation was not usable (out of order, under repair or undergoing long-term maintenance). ‘Total quantity of access’ means the units of access annually provided by the installation for the purposes of the activities referred to in Annex 1 to the GA (for the reference period years N-1 and N- 2). ‘Total access costs’ is calculated on the basis of the following categories of eligible costs:  direct costs incurred by the access provider for the ‘annual total quantity of access to the installation’, as recorded in the certified or auditable profit-and-loss accounts of the reference period (years N-1 and N-2) for:  personnel costs of administrative, technical and scientific staff directly assigned to keep the installation functioning normally and to support the users Exceptionally, these costs may be those calculated in accordance with the beneficiary’s usual cost accounting practices (i.e. ‘average personnel costs’).  costs of contracts for maintenance and repair (including specific cleaning, calibrating and testing) specifically awarded to keep the installation functioning normally  costs of consumables specifically used for the installation and the users’ research work  costs of contracts for installation management, including security fees, insurance costs, quality control and certification, upgrading to national and/or EU quality, safety or security standards specifically incurred for the functioning of the installation  costs of energy power and water supplied for the installation  costs of general services specifically included in the access services provided (e.g. library costs, shipping costs)  costs of software licences, internet connections or other electronic services for data management and computing where needed to provide access services  costs of specific scientific services included in the access provided or needed for the provision of access  depreciation costs of equipment, buildings and other assets (new or second-hand) that are part of the installation and were not purchased or built using EU/Euratom funds  renting or leasing the equipment, buildings and other assets that are part of the installation  indirect costs for providing access to the installation equal to 25 % of the eligible direct costs, minus any costs of subcontracting (i.e. costs of contracts for maintenance and repair, installation management, scientific services and other electronic services) and excluding:  depreciation costs of infrastructure purchased or built using EU funds (Those costs are not eligible; see also Article 6.5(b))  travel and subsistence costs for users. The unit cost can be changed only via an amendment to the agreement (see Article 55). 142 In exceptional and duly justified cases, the Commission may agree to a different reference period. 143 In exceptional and duly justified cases, the Commission may agree to a different reference period. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA EJP Cofund 622 As already mentioned above, access costs for installations contributed in-kind against payment must be declared as actual costs (of the beneficiary) under another budget category (i.e. ‘other direct costs’; see Article 6.2.D.3). Before signature of the FEJP GA, the beneficiaries can still opt for declaring the costs not as unit cost, but as actual costs (see Article 6.2.A-E). (One cost form per installation and access provider.) The use of unit costs for access activities is optional, i.e. each beneficiary/linked third party can decide independently whether to be reimbursed on the basis of unit costs or actual costs. If a beneficiary has initially opted for actual costs, it may only change its choice to unit costs through an amendment to the agreement (see Article 55). 1.3.3 The costs must fulfil the following conditions for eligibility:  fulfil the general conditions for unit costs to be eligible (i.e. units used during the action duration, necessary, linked to the action, correct calculation, etc.; see Article 6.1(b))  be incurred for providing access to research infrastructure to other beneficiaries 1.3.4 They must be calculated as follows: amount per unit (see Annex 2a GA) x number of units of access actually provided to other beneficiaries Example for calculating unit costs of access to research infrastructure: An access provider considers that the unit of access to the installation is calendar days. It provided 200 days of access in year N-1 and 150 days in year N-2. The total cost of providing this access, calculated on the basis of the categories of costs indicated above and the beneficiary’s usual cost-accounting practices, is EUR 50 000 000 for year N-1 and EUR 20 000 000 for year N-2. Unit cost = EUR 35 000 000 (average annual total cost) = EUR 200 000 per day 175 days (average annual total access) If the access provider makes the installation available for the Fusion programme EJP Cofund action for 50 days in year N, the total to be declared under unit costs for research infrastructure for year N will be EUR 10 000 000. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA EJP Cofund 623 ARTICLE 8 — RESOURCES TO IMPLEMENT THE ACTION — THIRD PARTIES INVOLVED IN THE ACTION 1. Appropriate own resources — Use of third party resources — Third parties involved in the action For EJP Cofund actions, the same rules on third party involvement apply as in the General MGA (see Article 8 H2020 General MGA). ARTICLE 8 — RESOURCES TO IMPLEMENT THE ACTION — THIRD PARTIES INVOLVED IN THE ACTION The beneficiaries must have the appropriate resources to implement the action. If it is necessary to implement the action, the beneficiaries may: - purchase goods, works and services (see Article 10); - use in-kind contributions provided by third parties against payment (see Article 11); - use in-kind contributions provided by third parties free of charge (see Article 12); - call upon subcontractors to implement action tasks described in Annex 1 (see Article 13); - call upon linked third parties to implement action tasks described in Annex 1 (see Article 14). In these cases, the beneficiaries retain sole responsibility towards the [Commission][Agency] and the other beneficiaries for implementing the action. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA EJP Cofund 624 ARTICLE 19 — SUBMISSION OF DELIVERABLES 1. Deliverable: Annual work plan When & What? For EJP Cofund actions, the coordinator must submit to the Commission/Agency — for each twelve-month period of the EJP — an annual work plan. This plan contains a detailed description of the activities for that period, in line with the objectives and description of work set out in Annex 1. Thus, while Annex 1 may include the targeted areas for research or other activities, it is the annual work plan that will define and specify the activities and the deliverables. Example: Annex 1 of a EJP contains a work package dedicated to a series of irradiation experiments in a large research facility. The annual work plan for the first reporting period provides a detailed description of the planned experiments on the related materials and the expected milestones. As the programme develops, additional irradiation capacity becomes available in year 3. Alternatively, the validation of previous results requires further work or other materials become interesting. The consortium proposes an annual work plan with additional experiments commencing in that reporting period. ARTICLE 19 — SUBMISSION OF DELIVERABLES 19.1 Obligation to submit deliverables The coordinator must submit: - 90 days before the end of each reporting period: (a) the ‘annual work plan for the next year’ (see Annex 7), for approval by the [Commission][Agency] and (b) a summary progress report on the activities carried out during the on-going reporting period This report must show how the activities proposed in the annual work plan for the next year ensure continuity with the work already carried out. If the [Commission][Agency] considers that the annual work plan for the next year does not comply with Annex 1, the coordinator must submit a revised version within 30 days from receiving formal notification. If the [Commission][Agency] considers that the revised annual work plan for the next year still does not comply with Annex 1, it may terminate the Agreement (see Article 50.3). - the other ‘deliverables’ identified in Annex 1, in accordance with the timing and conditions set out in it. 19.2 Consequences of non-compliance If the coordinator breaches any of its obligations under this Article, the [Commission][Agency] may apply any of the measures described in Chapter 6. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA EJP Cofund 625 An EJP consortium therefore has a certain flexibility to develop activities and use the allocated budget (as long as the proposed activities remain in line with the EJP objectives and description of work (Annex 1) as initially evaluated) The annual work plan must be drawn up using the template in Annex 7. The periods of the annual work plans coincide with the reporting periods (see Article 20), but the work plans must be submitted 3 months (i.e. 90 days) in advance to allow for review by the Commission (— except for the annual work plan for the first reporting period, which must already be part of the proposal; see the proposal templates). If the Commission/Agency considers that the proposed annual work plan does not comply with Annex 1, it will ask the coordinator to submit a revised annual work plan (— within 30 days from receiving the request). How? The annual work plan must be submitted through the Participant Portal. 2. Deliverable: Summary progress report When & What? The annual work plan must be accompanied by a summary progress report. The summary progress report should focus on how the activities proposed in the annual work plan ensure continuity with the work already carried out. It should NOT contain an analysis of all activities carried out during the reporting period (since that is the purpose of two other documents that must be submitted as part of the periodic reports, i.e. the ‘explanation of the work carried out’ and the ‘overview of the progress’; see Article 20.3). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA EJP Cofund 626 ARTICLE 20 — REPORTING — PAYMENT REQUESTS 1. Reports Like the General MGA, the EJP Cofund MGA foresees periodic reports and a final report, with both a technical and a financial part (see Article 20 H2020 General MGA). 2. Reporting periods EJP Cofund actions are divided in five reporting periods of 12 months each. Each reporting period triggers a periodic report. 3. Request for a second pre-financing payment — Statement on the use of the previous pre-financing instalment The GA may provide for this option for large EJPs that need a second pre-financing payment (at the beginning of the second reporting period; see Article 21). Payment of further pre-financing payments is not automatic. It must be requested via a ‘statement on the use of the first pre-financing payment’ (see Annex 8). ARTICLE 20 — REPORTING — PAYMENT REQUESTS 20.1 Obligation to submit reports The coordinator must submit to the [Commission][Agency] (see Article 52) the technical and financial reports set out in this Article. These reports include the requests for payment and must be drawn up using the forms and templates provided in the electronic exchange system (see Article 52). 20.2 Reporting periods The action is divided into the following ‘reporting periods’: - RP1: from month 1 to month 12 - RP2: from month 13 to month 24 - RP3: from month 25 to month 36 - RP4: from month 37 to month 48 - RP5: from month 49 to month 60 20.2a Request for a second pre-financing payment [OPTION in case of two pre-financing payments: The coordinator must submit — within 30 days following the end of the first reporting period — a request for a second pre-financing payment. The request must be included in a ‘statement on the use of the previous pre-financing instalment’ (see Annex 8).] [OPTION: not applicable] […] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA EJP Cofund 627 ARTICLE 21 — PAYMENTS AND PAYMENT ARRANGEMENTS ARTICLE 21 — PAYMENTS AND PAYMENT ARRANGEMENTS 21.1 Payments to be made The following payments will be made to the coordinator: - one pre-financing payment; - [a second pre-financing payment, on the basis of the request for a second pre-financing payment (see Article 20);] - one or more interim payments, on the basis of the request(s) for interim payment (see Article 20), and - one payment of the balance, on the basis of the request for payment of the balance (see Article 20). 21.2 Pre-financing payment — Amount — Amount retained for the Guarantee Fund The aim of the pre-financing is to provide the beneficiaries with a float. It remains the property of the EU until the payment of the balance. The [Commission][Agency] will — within 30 days, either from the entry into force of the Agreement (see Article 58) or from 10 days before the starting date of the action (see Article 3), whichever is the latest — make a pre-financing payment to the coordinator of EUR [insert amount (insert amount in words)], except if Article 48 applies. From this amount, an amount of EUR [insert amount (insert amount in words)], corresponding to [OPTION in case of a single pre-financing payment: 5%][OPTION in case of two pre-financing payments: 2,5%] of the maximum grant amount (see Article 5.1), is retained by the Commission and transferred into the ‘Guarantee Fund’. [OPTION in case of a second pre-financing payment: The [Commission][Agency] will — within 30 days from the request for a second pre-financing payment (see Article 20.2a) — make a second pre-financing payment to the coordinator of EUR [insert amount (insert amount in words)], except if Article 48 applies. From this amount, an amount of EUR [insert amount (insert amount in words)], corresponding to 2.5% of the maximum grant amount (see Article 5.1), will be retained by the [Commission][Agency] and transferred into the Guarantee Fund. If the statement on the use of the previous pre-financing instalment shows that less than 70 % of the previous instalment paid has been used to cover the costs of the action, the amount of the new pre-financing to be paid will be reduced by the difference between the 70 % threshold and the amount used. ] [OPTION if the JRC is a beneficiary: The parts of the pre-financing payments related to the Joint Research Centre (JRC) ([insert amounts (insert amounts in words)] are not paid to the coordinator, but kept by the [Commission][Agency] for the JRC.] […] 21.5 Notification of amounts due When making payments, the [Commission][Agency] will formally notify to the coordinator the amount due, specifying whether it concerns a [second pre-financing payment,] interim payment or the payment of the balance. For the payment of the balance, the notification will also specify the final grant amount. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA EJP Cofund 628 1. Payments Normally, EJP Cofund actions are divided in 5 reporting periods (see Article 20.2), with one pre- financing payment and interim payments for each reporting period. Large EJPs may exceptionally benefit from a second pre-financing payment (at the beginning of the second reporting period). Example (two pre-financing payments): An EJP receives a grant with a maximum grant amount of EUR 30 million. A total pre-financing of EUR 8 million is agreed but is split into two pre-financings of EUR 4 million each. First pre-financing = EUR 4 000 000 with a Guarantee Fund retention of EUR 30 million x 2.5% = EUR 750 000  net payment of EUR 3 250 000 Second pre-financing: Example 1a: The coordinator submits a statement showing that at least EUR 2 275 000 (70% of the EUR 3 250 000) has been used to cover the costs of the action  the second pre-financing will be EUR 4 000 000 with a Guarantee Fund retention of EUR 30 million x 2.5% = EUR 750 000 = net payment of EUR 3 250 000 Example1b: The coordinator submits a statement showing that EUR 1 950 000 (60% of the initial pre- financing) has been used to cover the costs of the action  the second pre-financing will be EUR 4 000 000 – (EUR 2 275 000 – EUR 1 950 000) = EUR 3 675 000 with a Guarantee Fund retention of EUR 30 million x 2.5% = EUR 750 000  net payment of EUR 2 925 000 The second pre-financing payment is NOT automatic but must be requested by the coordinator via a ‘statement on the use of the first pre-financing payment’ (see Article 20). The balance is paid when the action ends. 2. Amount of pre-financing payments How much? The pre-financing for EJP Cofund actions is normally 20% of the maximum grant amount set out in Article 5.1 (— unless it is exceptionally fixed higher or lower, to reflect the size and the needs of the EJP, the reimbursement rate in the work programme/call and/or the availability of EU funds) If the GA foresees a second pre-financing payment, the Guarantee Fund retention (of 5% of the maximum grant amount) will be split between the two pre-financing payments. The second/third pre-financing payment will be reduced, if — according to the statement on use of the previous pre-financing instalment — the previous pre-financing was insufficiently used:  if 70% or more of the first/second pre-financing has been used: the second/third pre-financing is paid in full  if less than 70% of the first/second pre-financing has been used: the second/third pre-financing will be reduced by an amount equal to the difference between the percentage actually used and 70%. . In the case of reduction of the grant or recovery of undue amounts, the notification will be preceded by the contradictory procedure set out in Articles 43 and 44. […] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 Framework Partnerships and Specific Agreements 629 VIII. Framework Partnerships and Specific Agreements VIII.1 Background information and approach The H2020 FPA and H2020 SGA are used for framework partnerships and specific grants (under such framework partnerships) ONLY. Framework partnerships are long-term co-operations that:  pursue a mutual interest and common general objectives (that coincide with EU policy) – have an action plan with actions that were defined and agreed jointly on the basis of the common general objectives and – have an ongoing formal arrangement to implement (potential) actions (i.e. the FPA and SGAs). Currently, framework partnerships are only open to actions under the General MGA (i.e. all kinds of research and innovation actions (RIA), innovation actions (IA) and coordination and support actions (CSA)). Framework partnerships are currently not (yet) open to ERANET, PCP- PPI, EJP, ERC, MSCA or SME Instrument specific actions. The FPA and SGA generally follow the General MGA for content, but with a different numbering: Table of correspondence Title of Article FPA Article SGA Article MGA Article CHAPTER 1 GENERAL SUBJECT OF THE AGREEMENT 1 1 1 CHAPTER 2 FRAMEWORK PARTNERSHIP ACTION PLAN — AWARD OF SPECIFIC GRANTS — SPECIFIC AGREEMENTS 2 DURATION AND STARTING DATE OF THE FRAMEWORK PARTERNSHIP 3 RIGHTS AND OBLIGATIONS UNDER THE FRAMEWORK PARTNERSHIP 4 SUSPENSION OF FRAMEWORK PARTNERSHIP IMPLEMENTATION 5 TERMINATION OF THE FRAMEWORK PARTNERSHIP AGREEMENT OR OF PARTICIPATION OF ONE OR MORE PARTNERS 6 CHAPTER 3 SPECIFIC GRANTS SECTION 1 SPECIFIC ACTIONS ACTION TO BE IMPLEMENTED 7 2 2 SPECIFIC ACTIONS TO BE IMPLEMENTED — COMPLEMENTARY GRANTS — JOINTLY FUNDED ACTIONS 7 2 2 DURATION OF THE SPECIFIC ACTIONS 8 3 3 ESTIMATED BUDGET AND BUDGET TRANSFERS 9 4 H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 Framework Partnerships and Specific Agreements 630 SECTION 2 SPECIFIC GRANTS GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATES AND FORMS OF COSTS 10 4 5 ELIGIBLE AND INELIGIBLE COSTS 11 5 6 SECTION 3 RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THE SPECIFIC GRANTS SUBSECTION 1 RIGHTS AND OBLIGATIONS RELATED TO IMPLEMENTING THE SPECIFIC ACTIONS GENERAL OBLIGATION TO PROPERLY IMPLEMENT THE SPECIFIC ACTIONS 12 2 7 RESOURCES TO IMPLEMENT THE SPECIFIC ACTIONS 13 6 8 IMPLEMENTATION OF ACTION TASKS BY BENEFICIARIES NOT RECEIVING EU FUNDING 14 7 9 PURCHASE OF GOODS, WORKS OR SERVICES 15 8 10 USE OF IN-KIND CONTRIBUTIONS PROVIDED BY THIRD PARTIES AGAINST PAYMENT 16 9 11 USE OF IN-KIND CONTRIBUTIONS PROVIDED BY THIRD PARTIES FREE OF CHARGE 17 10 12 IMPLEMENTATION OF ACTION TASKS BY SUBCONTRACTORS 18 11 13 IMPLEMENTATION OF ACTION TASKS BY LINKED THIRD PARTIES 19 12 14 FINANCIAL SUPPORT TO THIRD PARTIES 20 13 15 PROVISION OF TRANS-NATIONAL OR VIRTUAL ACCESS TO RESEARCH INFRASTRUCTURES 22 14 16 SUPPORT TO OR IMPLEMENTATION OF TRANS-NATIONAL PROJECTS 21 13a SUBSECTION 2 RIGHTS AND OBLIGATIONS RELATED TO THE GRANT ADMINISTRATION GENERAL OBLIGATION TO INFORM 23 17 KEEPING RECORDS — SUPPORTING DOCUMENTATION 24 18 SUBMISSION OF DELIVERABLES 25 15 19 REPORTING — PAYMENT REQUESTS 26 16 20 PAYMENTS AND PAYMENT ARRANGEMENTS 27 17 21 CHECKS, REVIEWS, AUDITS AND INVESTIGATIONS — EXTENSION OF FINDINGS 28 22 EVALUATION OF THE IMPACT OF THE SPECIFIC ACTIONS 29 23 SUBSECTION 3 RIGHTS AND OBLIGATIONS RELATED TO BACKGROUND AND RESULTS OF THE SPECIFIC ACTIONS MANAGEMENT OF INTELLECTUAL PROPERTY 29a 23a AGREEMENT ON BACKGROUND 30 18 24 H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 Framework Partnerships and Specific Agreements 631 ACCESS RIGHTS TO BACKGROUND 31 18 25 OWNERSHIP OF RESULTS 32 18 26 PROTECTION OF RESULTS — VISIBILITY OF EU FUNDING 33 18 27 EXPLOITATION OF RESULTS 34 18 28 DISSEMINATION OF RESULTS — OPEN ACCESS — VISIBILITY OF EU FUNDING 35 18 29 TRANSFER AND LICENSING OF RESULTS 36 18 30 ACCESS RIGHTS TO RESULTS 37 18 31 SUBSECTION 4 OTHER RIGHTS AND OBLIGATIONS RECRUITMENT AND WORKING CONDITIONS FOR RESEARCHERS 38 32 GENDER EQUALITY 39 33 ETHICS 40 34 CONFLICT OF INTERESTS 41 35 CONFIDENTIALITY 42 36 SECURITY-RELATED OBLIGATIONS 43 37 PROMOTING THE ACTION — VISIBILITY OF EU FUNDING 44 38 PROCESSING OF PERSONAL DATA 45 39 ASSIGNMENTS OF CLAIMS FOR PAYMENT AGAINST THE [COMMISSION][AGENCY] 46 40 SECTION 4 DIVISION OF PARTNERS’ ROLES AND RESPONSIBILITIES [— RELATIONSHIP WITH COMPLEMENTARY BENEFICIARIES] [— RELATIONSHIP WITH PARTICIPANTS OF A JOINT ACTION] DIVISION OF PARTNERS’ ROLES AND RESPONSIBILITIES 47 19 41 SECTION 5 REJECTION OF COSTS — REDUCTION OF THE GRANT — RECOVERY — PENALTIES — DAMAGES — SUSPENSION — TERMINATION — FORCE MAJEURE REJECTION OF INELIGIBLE COSTS 48 42 REDUCTION OF THE GRANT 49 43 RECOVERY OF UNDUE AMOUNTS 50 44 ADMINISTRATIVE AND FINANCIAL PENALTIES 51 45 LIABILITY FOR DAMAGES 52 46 SUSPENSION OF PAYMENT DEADLINE 53 47 SUSPENSION OF PAYMENTS 54 48 SUSPENSION OF THE ACTION IMPLEMENTATION 55 49 TERMINATION OF THE SPECIFIC AGREEMENT OR OF PARTICIPATION 56 20 50 H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 Framework Partnerships and Specific Agreements 632 FOR ONE OR MORE PARTNERS FORCE MAJEURE 57 51 CHAPTER 4 FINAL PROVISIONS COMMUNICATIONS BETWEEN THE PARTIES 58 52 INTERPRETATION OF THE FRAMEWORK PARTNERSHIP AGREEMENT AND THE SPECIFIC AGREEMENTS 59 53 CALCULATION OF PERIODS, DATES AND DEADLINES 60 54 AMENDMENTS TO THE FRAMEWORK PARTNERSHIP AGREEMENT AND THE SPECIFIC AGREEMENTS 61 55 ACCESSION TO THE FRAMEWORK PARTNERSHIP AGREEMENT AND THE SPECIFIC AGREEMENTS 62 56 APPLICABLE LAW AND SETTLEMENT OF DISPUTES 63 57 ENTRY INTO FORCE OF THE FRAMEWORK PARTNERSHIP AGREEMENT 64 21 58 In addition, all references in the General MGA to ‘beneficiary(ies)’ must be read as referring to the ‘partner(s)’. The annotations will concentrate on differences in substance and interpretation that require explanation. Parts that differ only in numbering or presentation (e.g. Chapters 3 and 4; Annexes) will not be shown. By contrast, provisions that do not deviate from the General MGA, but that require clarification or a specific interpretation for the FPA or SGA are added:  Article 9.1 (FPA-SGA budget categories)  Article 10 (FPA-SGA maximum grant amount, form of grant, reimbursement rate, forms of costs, final grant amount, revised final grant amount)  Article 11 (FPA-SGA eligible and ineligible costs)  Article 13 (FPA-SGA rules on third party involvement). For more information on framework partnerships, see the Online Manual and the H2020 grants fact sheets on the Participant Portal. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 FPA 633 VIII.2 H2020 FPA: Annotations FRAMEWORK PARTNERSHIP AGREEMENT NUMBER [insert number] — [insert acronym] This ‘Framework Partnership Agreement’ is between the following parties: on the one part, [OPTION 1: the European Union (‘the EU’, represented by the European Commission (‘the Commission’ 2 ) ,] [OPTION 2: the European Atomic Energy Community (‘Euratom’), represented by the European Commission (‘the Commission’) 3 ,] [OPTION 3: the [Research Executive Agency (REA)] [European Research Council Executive Agency (ERCEA)] [Innovation and Networks Executive Agency (INEA)] [Executive Agency for Small and Medium-sized Enterprises (EASME)] (‘the Agency’), under the powers delegated by the European Commission (‘the Commission’) 4 ,] represented for the purposes of signature of this Framework Partnership Agreement by [[function, [Directorate-General, Directorate, Unit] [Department]], [forename and surname] 5 , and on the other part, 1. ‘the coordinator’: [full official name] (short name)legal form] [official registration No] established in [official address in full] [VAT number], represented for the purposes of signing the Framework Partnership Agreement by [function, forename and surname] and the following other partners if they have signed their ‘Accession Form’ (see Annex 3 and Article 62): 2. [full official name] [short name] [legal form] [official registration No] [official address in full] [VAT number]. [same for each partner] [OPTION if the JRC is a partner: and X. the Joint Research Centre (JRC) established in [official address in full], if it signs the Administrative Arrangement (see Annex 3b)]. Unless otherwise specified, references to ‘partner’ or ‘partners’ include the coordinator [OPTION if the JRC participates: and the Joint Research Centre (JRC)]. The parties have agreed to enter into the Framework Partnership Agreement under the terms and conditions set out below. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 FPA 634 1. Coordinator — Partners The ‘partners’ are the legal entities that have signed a framework partnership with the Commission/Agency. Once an SGA is signed, the partners also become ‘beneficiaries’ (i.e. a ‘participant’144 in an action supported by a grant). Arrangements for signing the FPA are as follows:  the coordinator signs the FPA directly 144 For the definition, see Article 2.1(15) of the Rules for Participation: ‘participant’ means any legal entity carrying out an action or part of an action under Regulation (EU) No 1291/2013 having rights and obligations with regard to the Union or another funding body under the terms of this Regulation. The Framework Partnership Agreement is composed of: Terms and Conditions Annex 1 Action plan 6 Annex 2 Model Specific Agreement Annex 1 Description of the specific action Annex 2 Estimated budget for the specific action Annex 3 Model for the financial statements Annex 4 Model for the certificate on the financial statements Annex 3 Accession Forms [OPTION to be used if Article 19 applies and if joint and several liability has been requested by the [Commission][Agency]: 3a Declaration on joint and several liability of linked third parties] [OPTION if the JRC participates: 3b Administrative Arrangement] Annex 4 Model for the certificate on the methodology 2 Text in italics shows the options of the Model Grant Agreement that are applicable to this Agreement. 3 Text in italics shows the options of the Model Grant Agreement that are applicable to this Agreement. 4 Text in italics shows the options of the Model Grant Agreement that are applicable to this Agreement. 5 The person representing the Commission/Agency must be an authorising officer (by delegation or sub-delegation) designated in accordance with document 60008 of 22.02.2001 ‘Mise en place de la Charte des ordonnateurs’. 6 The action plan should include the common objectives of the parties and the types of activities covered under this framework partnership, that contribute to the achievement of those objectives. Same partners at FPA and SGA level — Partners must generally be the same at FPA and SGA level. However, partners that do not want to actively participate in a specific action, may participate as ‘partners not carrying out action tasks’ (for that Specific Agreement and will not have to comply with most of the obligations under that SGA (see Preamble SGA). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 FPA 635  the other partners sign the Accession Form (see Article 62 FPA and Annex 3). The documents must be signed electronically in Participant Portal. Amendments to the FPA (and the SGAs) will be signed by the coordinator on behalf of the other partners. Applicants who accept the partnership by signing the FPA become partners to the Agreement and are bound by its terms and conditions. Other entities involved in the partnership which do not sign the FPA (including entities linked to the partners) are considered as ‘third parties involved in the partnership’. They are not bound by the terms and conditions of the FPA and SGA; conversely, the Commission/Agency has no obligation towards third parties. Only linked third parties are normally involved in the framework partnership itself. Other third parties are normally only involved in the specific actions (‘third parties involved in the specific actions’). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 FPA 636 CHAPTER 1 GENERAL ARTICLE 1 — SUBJECT MATTER OF THE AGREEMENT CHAPTER 1 GENERAL ARTICLE 1 — SUBJECT MATTER OF THE AGREEMENT This Agreement establishes a long term cooperation (‘framework partnership’) and sets out its terms and conditions and the general terms and conditions and rights and obligations applicable to the specific grants that may be awarded by the [Commission][Agency] for the specific actions under the framework partnership. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 FPA 637 CHAPTER 2 FRAMEWORK PARTNERSHIP ARTICLE 2 — ACTION PLAN — AWARD OF SPECIFIC GRANTS — SPECIFIC AGREEMENTS CHAPTER 2 FRAMEWORK PARTNERSHIP ARTICLE 2 — ACTION PLAN — AWARD OF SPECIFIC GRANTS — SPECIFIC AGREEMENTS 2.1 Action plan The objectives and activities under the framework partnership are set out in the ‘action plan’ in Annex 1. 2.2 Award of specific grants for specific actions — Specific Agreements The [Commission][Agency] may award ‘specific grants’ for actions to be implemented under the framework partnership (‘specific actions’). [OPTION by default: In order to obtain proposals for specific grants, the [Commission][Agency] will consult the partners on the basis of [a call for proposals][an invitation to submit a proposal] 7 [a call for proposals or an invitation to submit a proposal] that sets out the [selection and] 8 award criteria it will apply. [This call will be [open to all the partners for which this type of activity is included in an FPA action plan (see Annex 1))] [open to all applicants meeting the announced criteria].] The partners are not obliged to respond to such consultations and may choose not to submit any proposal.] [OPTION if foreseen in the work programme: The partners must submit the proposals for specific grants (consisting of [insert documents to be submitted with proposal]) [for [insert the name(s) of the activity]] by [the date(s) specified in the action plan][insert date].] The [Commission][Agency] will decide on the award of the specific grants following an evaluation of the proposal [and a competitive review across consortia of partners]. If the [Commission][Agency] decides to award a specific grant, it will propose the partners to conclude a ‘Specific Agreement (SGA)’ (see Annex 2). By entering into the Specific Agreement [OPTION if the JRC is a partner: or the Administrative Arrangement], the partners accept the specific grant and agree to implement the specific action under their own responsibility and in accordance with the Framework Partnership Agreement and this Specific Agreement, with all the obligations and conditions they set out Specific Agreements must be concluded before the end of the framework partnership (see Article 3). After the end of the framework partnership or its termination, the Framework Partnership Agreement continues to apply to specific actions that are implemented under Specific Agreements which have entered into force before end of the duration. 7 The invitation to submit a proposal is an option reserved: - for monopoly situations or partners designated in the basic act;, - for cases where work is carried out in a network with pre-determined partners under the conditions laid down in the basic acts or - for actions with specific characteristics that require a particular type of body on account of its technical competence, its high degree of specialisation or its administrative power, on condition that the actions concerned do not fall within the scope of a call for proposals. 8 Use this option if you opt for an open call for proposals (‘a call for proposals open to all applicants meeting the announced criteria’). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 FPA 638 1. Framework partnership — Action plan What? Framework partnerships are long-term partnerships based on jointly agreed general objectives and a roadmap of actions (‘action plan’). The action plan should normally include at least the following:  the objectives of the partnership (as set out in the work programme/call)  the list of actions covered (including an indicative work plan)  an explanation of how the actions will contribute to the achievement of the objectives  the description of the partners  key performance indicators  information on the arrangements for intellectual property rights and open access (if relevant at FPA level)  information on ethics and gender issues (if relevant). The partnership is established in a FPA and implemented by SGAs for specific actions. For this purpose, specific grants will be announced in work programmes/calls. The FPA does NOT oblige the Commission/Agency to award specific grants. Specific grants can be awarded only in line with the action plan. The partners remain free to participate also in other calls for proposals organised by the Commission/Agency, in order to receive grants outside the action plan. Framework partnerships can in principle be funded in all areas of the Horizon 2020 Framework Programme. Currently, they are however only open to actions under the General MGA (i.e. all kinds of research and innovation actions (RIA), innovation actions (IA) and coordination and support actions (CSA) (e.g. H2020-FETFLAG-2014; H2020-EINFRA-2014-2); Framework partnerships are currently NOT (yet) open to ERANET, PCP-PPI, EJP, ERC, MSCA or SME Instrument specific actions. 2. Award of specific grants The specific grants are awarded to partners through one or more of the following procedures (depending on which options are inserted in the FPA): – calls for proposals open to all partners for which this type of activity is included in the action plan Such calls are restricted to the consortia that have signed a FPA and compete for the specific grant. Example: The Commission signs different FPAs. In the call for proposals for specific grants, it establishes that participation is restricted to applicants who have already signed an FPA. Consortia A and B have signed FPAs with the Commission – FPA-1 in the case of Consortium A and FPA-2 in the case of Consortium B. Following submission of the proposal and a positive evaluation, Consortium B is awarded the grant and signs an SGA with the Commission in the framework of FPA-2. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 FPA 639 – calls for proposals open to all applicants meeting the criteria Such calls are open to any legal entity that satisfies the criteria set out in the call for proposals.  invitations to submit a proposal Such invitations can only be issued in one of the following cases:  in monopoly situations or where partners are designated in the basic act – in if work is carried out in a network with pre-determined partners under conditions laid down in the basic acts – for actions with specific characteristics that require a particular type of body on account of its technical competence, high degree of specialisation or administrative capacity, and do not fall within the scope of a call for proposals  submission of a proposal by a certain date This option can be included in the FPA only if it is provided for in the work programme/call. The date must be set out in the action plan or in Article 2 FPA. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 FPA 640 ARTICLE 3 — DURATION AND STARTING DATE OF THE FRAMEWORK PARTERNSHIP 1. Starting date of the framework partnership The starting date of the framework partnership is fixed by the Commission/Agency in the FPA It is usually the first day of the month following the date on which the FPA enters into force. The FPA enters into force when the last party signs it (see Article 64 FPA). Example: The FPA is signed by the coordinator on 30 December 2014 and by the Commission on 5 January 2015. The starting date of the partnership is 1 February 2015. 2. Duration of the framework partnership The duration of framework partnerships may not exceed four years, except in duly justified exceptional cases (e.g. to align it with the duration of the Horizon 2020 Framework Programme). The duration of a framework partnership cannot be extended (i.e. it is not possible to request an amendment extending the duration). SGAs must be signed before the end of the FPA. ARTICLE 3 — DURATION AND STARTING DATE OF THE FRAMEWORK PARTNERSHIP The Framework Partnership Agreement is concluded for a period of [insert number] of months ([…]years) 9 as of its entry into force (see Article 64). This period cannot be extended. 9 Not more than four years, except in duly justified exceptional cases (for instance, to align it with the duration of the framework programme) (Article 178 RAP). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 FPA 641 ARTICLE 4 — RIGHTS AND OBLIGATIONS UNDER THE FRAMEWORK PARTNERSHIP 1. Consortium agreement As a general rule, the partners must conclude a FPA consortium agreement to ensure a smooth and successful implementation of the framework partnership and the specific actions (like for GAs; see Article 41.3 H2020 General MGA). If necessary, the consortium may decide to have — in addition to the FPA consortium agreement — specific consortium agreements for each SGA. In this case, the consortium will need to ensure a mechanism to settle possible conflicts between the different consortium agreements. ARTICLE 4 — RIGHTS AND OBLIGATIONS UNDER THE FRAMEWORK PARTNERSHIP 4.1 Obligation to properly implement the framework partnership The partners must respect the objectives of the framework partnership and implement it as described in Annex 1 and endeavour to achieve those objectives also in the specific actions. The partners must maintain relations of mutual co-operation and regular and transparent exchanges of information with the [Commission][Agency] on: - the implementation and follow-up of the action plan and the specific grants and - other matters of common interest related to the Framework Partnership Agreement. The partners must implement the framework partnership in compliance with Articles 39, 40, 41, 42, 44, 45, 52 — mutatis mutandis. 4.2 Consortium agreement [OPTION to be used, unless the work programme specifies that there is no need for a consortium agreement: The partners must have internal arrangements regarding their operation and co-ordination to ensure that the framework partnership and the specific actions are implemented properly. These internal arrangements must be set out in a written ‘consortium agreement’ between the partners, which may cover: - internal organisation of the consortium; - management of access to the electronic exchange system; - distribution of EU funding; - additional rules on rights and obligations related to background and results (including whether access rights remain or not, if a partner is in breach of its obligations) (see Subsection 3 of Chapter 3); - settlement of internal disputes; - liability, indemnification and confidentiality arrangements between the partners. The consortium agreement must not contain any provision contrary to the Framework Partnership Agreement and the Specific Agreements.] [OPTION: Not applicable] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 FPA 642 ARTICLE 5 — SUSPENSION OF FRAMEWORK PARTNERSHIP IMPLEMENTATION 1. Suspension of framework partnership implementation The rules on suspension of framework partnership implementation are similar to the suspension of action implementation (see Article 49 H2020 General MGA). Amendments after a suspension can NOT however have the effect of extending the FPA duration set out in Article 3 FPA. ARTICLE 5 — SUSPENSION OF FRAMEWORK PARTNERSHIP IMPLEMENTATION The parties may suspend the implementation of the framework partnership on the grounds and according to the procedure — mutatis mutandis — set out in Article 55. If the [Commission][Agency] suspends the framework partnership implementation, all specific actions are also deemed suspended (see Article 55), from the date of suspension of the framework partnership. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 FPA 643 ARTICLE 6 — TERMINATION OF THE FRAMEWORK PARTNERSHIP AGREEMENT OR OF THE PARTICIPATION OF ONE OR MORE PARTNERS 1. Termination of the FPA The FPA can be terminated at any time and on any grounds, without the need for a contradictory procedure between the parties. 2. Termination of the participation of one or more partners The parties may terminate the participation of a partner in the framework partnership on similar grounds (and according to similar procedures) as their termination in actions (see Article 50 H2020 General MGA). Termination of the FPA has NO effect on ongoing SGAs (— unless these are also terminated; see Article 56 FPA and Article 20 SGA). ARTICLE 6 — TERMINATION OF THE FRAMEWORK PARTNERSHIP AGREEMENT OR OF THE PARTICIPATION OF ONE OR MORE PARTNERS 6.1 Termination of the Agreement The parties may terminate the Framework Partnership Agreement at any time. The party terminating the Framework Partnership Agreement must formally notify termination to the other party, stating the date the termination will take effect. This date must be after the notification. Termination of the Framework Partnership Agreement does not release the parties from their obligations under Specific Agreements which have entered into force before the date on which the termination takes effect, unless they have been terminated. Neither party may claim damages due to termination by the other party. 6.2 Termination of the participation of one or more partners The parties may terminate participation of one or more partners in the framework partnership on the grounds and according to the procedures — mutatis mutandis — set out in Article 56.2.1, 56.3.1 and 56.3.2. The coordinator must submit a request for amendment (see Article 61) to adapt Annex 1 and, if necessary, the addition of one or more new partners (see Article 62). If the request for amendment is rejected by the [Commission][Agency], the Framework Partnership Agreement may be terminated (see above). Termination of participation in the framework partnership does not release the partner concerned from its obligations under Specific Agreements. It cannot however participate in specific actions awarded after the date on which the termination takes effect. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 FPA 644 Termination of participation in the framework partnership has NO effect on ongoing SGAs (— unless these are also terminated; see Article 56 FPA). Example: A partner wants to terminate participation in the framework partnership because it no longer has interest in future SGAs (while it wants to finish the ongoing ones it has committed to). Same partners at FPA and SGA level — Partners must generally be the same at FPA and SGA level. Termination of participation will however exceptionally lead to a different consortium composition at FPA and SGA level — unless participation is ended on both levels (and for ALL SGAs). This is one of the very few cases of a different consortium composition. Normally, consortium composition is the same, but partners can participate as ‘partners not carrying out action tasks’ for certain specific actions. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 FPA 645 ARTICLE 9 — ESTIMATED BUDGET AND BUDGET TRANSFERS 1. Budget categories The budget categories of the SGA will depend on the type of SGA used. Example: For RIA, IA and CSA specific actions, the SGA will use the budget categories of the General MGA:  direct personnel costs  direct costs of subcontracting  direct costs of providing financial support to third parties (if option applies)  other direct costs  indirect costs  specific cost categories (if option applies) (see Article 4 H2020 General MGA). ARTICLE 9 — ESTIMATED BUDGET AND BUDGET TRANSFERS 9.1 Estimated budget The estimated budget for the specific actions is set out in Annex 2 to the Specific Agreements. It contains the estimated eligible costs and the forms of costs, broken down by partner [and linked third party] and budget category (Articles 4, 5 , 6 SGA [and Article 19 FPA] It also contains the estimated costs of the partners not receiving EU funding, if applicable (see Article 6 SGA) […] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 FPA 646 ARTICLE 10 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATES AND FORMS OF COSTS ARTICLE 10 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATES AND FORMS OF COSTS 10.1 Maximum grant amount The maximum grant amount for the specific grants is set out in the Specific Agreements (see Article 4 SGA). 10.2 Form of grant, reimbursement rates and form(s) of costs The form of the grant, reimbursement rate(s), estimated eligible costs and the form(s) of costs of the specific grants are set out in the Specific Agreements (see Article 4 SGA). 10.3 Final grant amount — Calculation The final grant amount of a specific grant depends on the actual extent to which the specific action is implemented in accordance with the terms and conditions of the Framework Partnership Agreement and the Specific Agreement concerned. This amount is calculated by the [Commission][Agency] — when the payment of the balance is made (see Article 17 SGA) — in the following steps: Step 1 – Application of the reimbursement rates to the eligible costs Step 2 – Limit to the maximum grant amount Step 3 – Reduction due to the no-profit rule Step 4 – Reduction due to improper implementation or breach of other obligations 10.3.1 Step 1 — Application of the reimbursement rates to the eligible costs The reimbursement rate(s) (see Article 4 SGA) are applied to the eligible costs (actual costs, unit costs, flat- rate costs and lump sum costs; see Article 5 SGA) declared by the partners [and the linked third parties] (see Article 16 SGA) and approved by the [Commission][Agency] (see Article 17 SGA). 10.3.2 Step 2 — Limit to the maximum grant amount If the amount obtained following Step 1 is higher than the maximum grant amount (see Article 4 SGA), it will be limited to the latter. 10.3.3 Step 3 — Reduction due to the no-profit rule The specific grant must not produce a profit. ‘Profit’ means the surplus of the amount obtained following Steps 1 and 2 plus the specific action’s total receipts, over the specific action’s total eligible costs. The ‘specific action’s total eligible costs’ are the consolidated total eligible costs approved by the [Commission][Agency]. The ‘specific action’s total receipts’ are the consolidated total receipts generated during its duration (see Article 3 SGA). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 FPA 647 The following are considered receipts: (a) income generated by the specific action; if the income is generated from selling equipment or other assets purchased under the Specific Agreement, the receipt is up to the amount declared as eligible under the Specific Agreement; (b) financial contributions given by third parties to the partner [or to a linked third party] specifically to be used for the specific action, and (c) in-kind contributions provided by third parties free of charge specifically to be used for the specific action, if they have been declared as eligible costs. The following are however not considered receipts: (a) income generated by exploiting the specific action’s results (see Article 34); (b) financial contributions by third parties, if they may be used to cover costs other than the eligible costs (see Article 5 SGA); (c) financial contributions by third parties with no obligation to repay any amount unused at the end of the period set out in Article 3 of the Specific Agreement). If there is a profit, it will be deducted from the amount obtained following Steps 1 and 2. 10.3.4 Step 4 — Reduction due to improper implementation or breach of other obligations — Reduced grant amount — Calculation If the specific grant is reduced (see Article 49), the [Commission][Agency] will calculate the reduced grant amount by deducting the amount of the reduction (calculated in proportion to the improper implementation of the specific action or to the seriousness of the breach of obligations in accordance with Article 49.2) from the maximum grant amount (see Article 4 SGA). The final grant amount will be the lower of the following two: - the amount obtained following Steps 1 to 3 or - the reduced grant amount following Step 4. 10.4 Revised final grant amount — Calculation If — after the payment of the balance (in particular, after checks, reviews, audits or investigations; see Article 28) — the [Commission][Agency] rejects costs (see Article 48) or reduces the specific grant (see Article 49), it will calculate the ‘revised final grant amount’ for the partner concerned by the findings. This amount is calculated by the [Commission][Agency] on the basis of the findings, as follows: - in case of rejection of costs: by applying the reimbursement rate to the revised eligible costs approved by the [Commission][Agency] for the partner concerned; - in case of reduction of the specific grant: by calculating the concerned partner’s share in the grant amount reduced in proportion to its improper implementation of the specific action or to the seriousness of its breach of obligations (see Article 49.2). In case of rejection of costs and reduction of the specific grant: the revised final grant amount for the partner concerned will be the lower of the two amounts above. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 FPA 648 1. Form of grant — Reimbursement rates — Cost form(s) The form of grant, reimbursement rates and cost form(s) of the SGA will depend on the type of SGA used. Example: For RIA, IA and CSA actions, the SGA will use the form of grant, reimbursement rates and forms of costs of the General MGA (see Article 4 SGA and Article 5 H2020 General MGA) 2. Calculation of the final grant amount — Calculation of a revised final grant amount Similarly, the rules on the calculation of the final grant amount and a revised final grant amount will depend on the type of SGA used. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 FPA 649 ARTICLE 11 — ELIGIBLE AND INELIGIBLE COSTS 1. Eligible costs The specific eligibility conditions applicable per budget category are set out in Article 5 SGA. The SGA will use the budget categories that belong to the type of specific action, with the same types of costs, conditions for eligibility and rules for cost calculation. Example: For RIA, IA or CSA specific actions, the budget categories, types of costs, conditions for eligibility and rules for cost calculation of the General MGA will apply (see Article 5 SGA and Article 6 H2020 General MGA). ARTICLE 11 — ELIGIBLE AND INELIGIBLE COSTS 11.1 Eligible Costs The general and specific conditions for costs to be eligible under the specific grants are set out in the Specific Agreements (see Article 5 SGA). 11.2 Ineligible costs The conditions under which costs are considered ineligible under the specific grants are set out in the Specific Agreements (see Article 5 SGA). 11.3 Consequences of declaration of ineligible costs Declared costs that are ineligible will be rejected (see Article 48). This may also lead to any of the other measures described in Section 5. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 FPA 650 ARTICLE 13 — RESOURCES TO IMPLEMENT THE SPECIFIC ACTIONS — THIRD PARTIES INVOLVED IN THE SPECIFIC ACTIONS 1. Appropriate own resources — Use of third party resources — Third parties involved in the action The rules on third party involvement will depend on the type of SGA used. Example: For RIA, IA and CSA specific actions, the SGA will use the rules on third party involvement of the General MGA (see Article 8 H2020 General MGA). The third parties are normally involved in the specific actions, not in the framework partnership. Example: Third parties making resources available against payment or free of charge (see Articles 9 and 10 FPA) must be identified in Annex I of the SGA. However, partners must — already at FPA proposal stage — indicate if they intend to use third parties or not. Moreover, linked third parties must be identified already in the FPA (see Article 19 FPA). Example: Linked third parties carrying out specific action task must be identified in the FPA and also in Annex I of the relevant SGAs ARTICLE 13 — RESOURCES TO IMPLEMENT THE SPECIFIC ACTIONS — THIRD PARTIES INVOLVED IN THE SPECIFIC ACTIONS The rules on the resources to implement the specific actions and involvement of third parties in the action are set out in the Specific Agreements (see Article 6 SGA). If a linked third party wants to participate in a specific action, its partner must also fully participate in that action (i.e. NOT be ‘partner not carrying out action tasks’). If the partner does not want to, the linked third party can however itself become a partner of the FPA and SGA. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 FPA 651 ARTICLE 62 — ACCESSION TO THE FRAMEWORK PARTNERSHIP AGREEMENT AND THE SPECIFIC AGREEMENTS 1. Accession to the FPA and SGAs While the coordinator signs the FPA, the other partners must accede to the FPA by means of the Accession Forms. In doing so, they mandate the coordinator:  to submit and sign in their name and on their behalf any amendments to the framework  to sign in their name and on their behalf any SGA that may be awarded. The SGAs are signed ONLY by the coordinator. The other partners do NOT need to sign accession forms for the SGAs. ARTICLE 62 — ACCESSION TO THE FRAMEWORK PARTNERSHIP AGREEMENT AND THE SPECIFIC AGREEMENTS 62.1 Accession of the partners mentioned in the preamble The other partners must accede to the Framework Partnership Agreement by signing the Accession Form (see Annex 3) in the electronic exchange system (see Article 58) — within 30 days after its entry into force (see Article 64). [OPTION if Article 19 applies and joint and several liability has been requested: and for partners for which the [Commission][Agency] has requested joint and several liability of a linked third party, by also submitting — at accession to the Framework Partnership Agreement — a declaration on joint and several liability (see Annex 3a) signed by the third party.] All partners having acceded to the Framework Partnership Agreement must be part of the Specific Agreements. The partners will accede to the Specific Agreements by signature of the coordinator (see mandate in Annex 3). They will assume the rights and obligations under the agreements with effect from the date of their entry into force (see Article 64 and Article 21 SGA). If a partner does not accede to the Framework Partnership Agreement within the above deadline, the coordinator must — within 30 days — request an amendment to make any changes necessary to ensure proper implementation of the action plan. This does not affect the [Commission’s][Agency’s] right to terminate the agreements (see Articles 6 and 56). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 FPA 652 1. Addition of a new partner New partners can be added at any moment of the framework partnership. Before any SGA has been concluded, only the FPA must be amended. Once an SGA has already been concluded, both the FPA and the SGA must be amended. The coordinator must submit the request(s) for amendments. The request for amendment must include a proposal to amend Annex 1 to the FPA and the SGAs (if necessary). The conditions for accepting new partners are the same as under the General MGA (see Article 56.2 H2020 General MGA). Requests for amendment of the FPA and the SGA must be made in parallel. The SGA can NOT be amended before the FPA. 62.2 Addition of new partners In justified cases, the partners may request the addition of a new partner. For this purpose, the coordinator must submit a request for amendment of the Framework Partnership and the Specific Agreements in accordance with Article 61. It must include an Accession Form (see Annex 3) signed by the new partner in the electronic exchange system (see Article 58). New partners must assume the rights and obligations under the agreements with effect from the date of their accession specified in the Accession Form (see Annex 3). Same partners at FPA and SGA level — Partners must generally be the same at FPA and SGA level. The new partner must therefore be added at both levels. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 SGA 653 VIII.3 H2020 SGA: Annotations SPECIFIC AGREEMENT NUMBER [insert number] — [insert acronym] This ‘Specific Agreement’ is between the following parties: on the one part, [OPTION 1: the European Union (‘the EU’, represented by the European Commission (‘the Commission’) 2 ,] [OPTION 2: the European Atomic Energy Community (‘Euratom’), represented by the European Commission (‘the Commission’ 3 ),] [OPTION 3: the [Research Executive Agency (REA)] [European Research Council Executive Agency (ERCEA)] [Innovation and Networks Executive Agency (INEA)] [Executive Agency for Small and Medium-sized Enterprises (EASME)] (‘the Agency’), under the powers delegated by the European Commission (‘the Commission’) 4 ,] represented for the purposes of signature of this Specific Agreement by [[function, [Directorate-General, Directorate, Unit] [Department]], [forename and surname], 5 and on the other part, 1. ‘the coordinator’: [full official name (short name)] [legal form] [official registration No] established in [official address in full] [VAT number], represented for the purposes of signing the Specific Agreement by [function, forename and surname] and the following other partners, represented for the purposes of signing the Specific Agreement by the coordinator (see the mandate in Annex 3 of the Framework Partnership Agreement and Article 62 of the Framework Partnership Agreement): 2. [full official name] [short name] [legal form] [official registration No] [official address in full] [VAT number]. [OPTION for partners not carrying out action tasks under this Specific Agreement: X. [full official name (short name)] [legal form], [official registration No], established in [official address in full] [VAT number]] [OPTION for partners not receiving EU funding under this Specific Agreement: X. [full official name (short name)] [legal form], [official registration No], established in [official address in full] [VAT number], as ‘partners not receiving EU funding’ (see Article 7),] [same for each partner] [OPTION if the JRC is a partner: and X. the Joint Research Centre (JRC) established in [official address in full], if it signs the Αdministrative Αrrangement (see Annex 3b)]. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 SGA 654 1. Partners — Partners not carrying out action tasks under this SGA The partners of a SGA are generally the same as the partners of the FPA (see Article 62.1 FPA). However, not all partners of a framework partnership must actively participate in all specific actions. Partners who do not actively participate in a specific action are ‘partners not carrying out action tasks’ under that Specific Agreement (and must be identified as such in the preamble to the SGA). These partners nevertheless remain part of the consortium implementing the SGA (and are parties to this SGA, meaning that the coordinator signs also in their name). They will also be identified in Annex 1, but it will be specified that they do not carry out any tasks covered by the SGA. Moreover, they will also be mentioned in Annex 2, without being associated with any costs or request for an EU contribution. Some obligations (e.g. IPR, checks reviews and audits and confidentiality) are applicable also for these partners. However, most of the other obligations concerning that SGA (e.g. By entering into the Specific Agreement [OPTION if the JRC is a partner: or the Αdministrative Αrrangement], the partners accept the grant and agree to implement the specific action, under their own responsibility and in accordance with the Framework Partnership Agreement and this Specific Agreement, with all the obligations and conditions they set out. The Specific Agreement is composed of: Terms and Conditions Annex 1 Description of the action Annex 2 Estimated budget for the action Annex 3 Model for the financial statements Annex 4 Model for the certificate on the financial statements 2 Text in italics shows the options of the Model Grant Agreement that are applicable to this Agreement. 3 Text in italics shows the options of the Model Grant Agreement that are applicable to this Agreement. 4 Text in italics shows the options of the Model Grant Agreement that are applicable to this Agreement. 5 The person representing the Commission/Agency must be an authorising officer (by delegation or sub-delegation) designated in accordance with document 60008 of 22.02.2001 ‘Mise en place de la Charte des ordonnateurs’. Same partners at FPA and SGA level — Partners must generally be the same at FPA and SGA level. An entity that is not party to the FPA cannot become party to the SGA. Conversely, all parties to the FPA become parties to the SGA. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 SGA 655 implementation, deliverables, technical and financial reporting, keeping of supporting documents, etc.) are NOT. SGAs are signed by the coordinator on behalf of the other partners (see Article 62.1 FPA). The documents must be signed electronically in the Participant Portal. The other partners do NOT need to sign Accession Forms. Other entities involved in a specific action which do not sign the SGA (including entities linked to the partners) are considered as ‘third parties involved in the specific action’. They are not bound by the terms and conditions of the FPA or SGA; conversely, the Commission/Agency has no obligations towards them. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 SGA 656 ARTICLE 17 — PAYMENTS AND PAYMENT ARRANGEMENTS 1. Minimum number of partners The minimum number of partners generally depends on the type of specific action. For SGAs, the minimum number of partners will be explicitly indicated in the call for proposals (or — if there is no call for proposals — in the work programme and in the invitation to submit a proposal). The minimum numbers of partners refers to the partners implementing the specific action. If a specific action requires more partners than are currently in the framework partnership, the FPA first needs to be enlarged. ARTICLE 17 — PAYMENTS AND PAYMENT ARRANGEMENTS […] 17.7 Payments to the coordinator — Distribution to the partners Payments will be made to the coordinator. Payments to the coordinator will discharge the [Commission][Agency] from its payment obligation. The coordinator must distribute the payments between the partners without unjustified delay. Pre-financing may however be distributed only: a) if the minimum number of partners set out in the call for proposals has acceded to the Framework and Specific Agreement (see Article 62 FPA) and b) to partners that have entered into the Specific Agreement (see Article 62 FPA). […] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 657 IX. Lump sum MGA IX.1 Background information and approach The Lump sum Model Grant Agreement (H2020 MGA Lump sum) is used mainly for ‘coordination and support actions (CSA) and (exceptionally) for ‘research and innovation actions (RIA)’ and ‘innovation actions (IA)’) — if the work programme/call provides for a lump sum grant. Example: H2020-INNOSUP-2014-5 Peer learning of innovation agencies The MGA Lump sum follows the General MGA for numbering and content, except for: The annotations will concentrate on differences in substance and interpretation that require explanation. Parts that do not apply or differ only in presentation (e.g. Articles 4.2, 9, 11, 12, 16, 20.5, 21.3, 25.5, Annexes) will not be shown. The annotations are based on the multi-beneficiary version, since it is the most common for lump sum actions. Where there are significant differences (i.e. Articles 21, 41, 44, 49 and 50), the mono-beneficiary version of the Article is shown. The H2020 MGA Lump sum deviates from the General MGA as follows:  Article 4 (estimated budget of the action)  Article 5 (maximum grant amount, form of grant and reimbursement rate)  Article 6 (lump sum specific form of costs)  Article 7 (specific provision for lump sum)  Article 8 (specific provision for third parties)  Articles 9, 11, 12, 16 (not applicable)  Article 18 (specific provision for record-keeping)  Article 20 (specific reporting provisions)  Article 21 (specific payment provisions)  Article 42 (specific provision for lump-sum)  Article 44 (specific provisions for lump sum)  Article 49 (specific provision for suspension of action implementation)  Article 50 (specific provision for lump-sum)  Annex 2 Model for the estimated budget for the action  Annex 3 Accession form for beneficiaries  Annex 4 Model for the financial statement  Annex 7 Model for the request for further pre-financing payment(s) H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 658 IX.2 H2020 MGA lump sum: Annotations ARTICLE 2 — ACTION TO BE IMPLEMENTED 1. CSA, RIA and IA lump sum actions What? Lump sum grants fund (mainly) coordination and support actions (CSA) and (exceptionally) research and innovation actions (RIA) or innovation actions (IA) — if the work programme/call provides for a lump sum grant. CSA, RIA and IA lump sum actions may be mono- or multi-beneficiary actions. They can be funded in all Parts of the Horizon 2020 Framework Programme (e.g. H2020- INNOSUP-2014-5). ARTICLE 2 — ACTION TO BE IMPLEMENTED The grant is awarded for the action entitled [insert title of the action] — [insert acronym] (‘action’), as described in Annex 1. For definitions and more information on CSA, RIA and IA actions, see Article 2 of the H2020 General MGA, the Online Manual and the H2020 grants fact sheets on the Participant Portal. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 659 ARTICLE 4 — ESTIMATED BUDGET AND BUDGET TRANSFERS 1. Budget category The MGA Lump sum does not use the budget categories of the General MGA. Since these grants consist in a single lump sum, there is only one budget category. Budget category of the MGA Lump sum:  costs (direct and indirect costs) ARTICLE 4 — ESTIMATED BUDGET AND BUDGET TRANSFERS 4.1 Estimated budget The ‘estimated budget’ for the action is set out in Annex 2. It contains the budget category, the estimated eligible costs and the form of costs (see Articles 5 and 6). 4.2 Budget transfers Not applicable The budget categories are relevant for the estimated budget (Article 4 and Annex 2), forms of costs (Article 5), cost eligibility rules (Article 6.2) and the cost declarations (i.e. financial statements; Article 20 and Annex 4). . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 660 ARTICLE 5 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATE AND FORM OF COSTS 1. Maximum grant amount — Reimbursement rate — Cost forms How much & which form? The MGA Lump sum does not use the cost forms of the General MGA, but is a lump sum grant. The use of the lump sum will be set out in the work programme/call. The lump sum will be set to give a round amount when the reimbursement rate is applied (— important if the reimbursement rate is not 100%). It is one amount (for the entire consortium). The conditions for eligibility are set out in Article 6. If the action is correctly implemented, the beneficiaries are entitled to receive this fixed amount of EU funding (lump sum). ARTICLE 5 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATES AND FORMS OF COSTS 5.1 Maximum grant amount The ‘maximum grant amount’ is EUR [insert amount (insert amount in words)]. 5.2 Form of grant, reimbursement rate and form of costs The grant reimburses [OPTION for research and innovation actions (RIA): 100 % of the action’s eligible costs] [OPTION for innovation actions (IA): 70% of the action’s eligible costs] 8 [OPTION for exceptional cases if foreseen in the work programme: […%] of the action’s eligible costs] (see Article 6) (‘reimbursement of eligible costs grant’) (see Annex 2). The estimated eligible costs of the action are EUR [insert amount (insert amount in words)]. Eligible costs (see Article 6) must be declared as the lump sum set out in Annex 2 (i.e. under the form of ‘lump sum costs’). 8 For the definition, see Article 2.1 (6) of Regulation (EU) No 1290/2013 of the European Parliament and of the Council of 11 December 2013 laying down the rules for participation and dissemination in 'Horizon 2020 – the Framework Programme for Research and Innovation (2014 – 2020)' ('Rules for Participation Regulation No 1290/2013') (OJ L 347, 20.12.2013 p. 81): 'innovation action' means an action primarily consisting of activities directly aiming at producing plans and arrangements or designs for new, altered or improved products, processes or services. For this purpose they may include prototyping, testing, demonstrating, piloting, large-scale product validation and market replication. The lump sum is deemed to cover ALL (direct and indirect) costs that are incurred for the action. NO other costs will be reimbursed. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 661 1. Final grant amount For lump sum grants, the rules on the calculation of the final grant amount are in principle the same as in the General MGA (see Article 5.3 H2020 General MGA). However, since they are lump sum grants (and the amount declared is pre-filled by the system), there is NO:  limit to the maximum grant amount or  reduction due to the no-profit rule. 5.3 Final grant amount — Calculation The ‘final grant amount’ depends on the proper implementation of the action in accordance with the Agreement’s terms and conditions. This amount is calculated by the [Commission][Agency] — when the payment of the balance is made (see Article 21) — in the following steps: Step 1 — Application of the reimbursement rate Step 2 — Reduction due to breach of obligations 5.3.1 Step 1 — Application of the reimbursement rate to the eligible costs The reimbursement rate (see Article 5.2) is applied to the eligible costs (lump sum costs; see Article 6) declared by the consortium and approved by the [Commission][Agency] (see Article 21). 5.3.2 Step 2 — Reduction due to breach of obligations other than improper implementation — Reduced maximum grant amount — Calculation If the grant is reduced (see Article 43), the [Commission][Agency] will calculate the reduced maximum grant amount by deducting the amount of the reduction (calculated in proportion to the seriousness of the breach of obligations in accordance with Article 43.2) from the maximum grant amount set out in Article 5.1. In this case, the final grant amount will be the lower of the following two: - the amount obtained in Step 1 or - the amount obtained in Step 2. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 662 1. Revised final grant amount For lump sum grants, the rules on the calculation of the revised final grant amount are in principle the same as in the General MGA (see Article 5.3 H2020 General MGA). However, since they are lump sum grants, improper implementation of the action leads to ineligibility of the costs (NOT to the reduction of the grant). Therefore, the grant reduction mentioned in this provision does not relate to improper implementation of the action (but only to breaches of ‘other obligations’; see Article 43). 5.4 Revised final grant amount — Calculation If — after the payment of the balance (in particular, after checks, reviews, audits or investigations; see Article 22) — the [Commission][Agency] rejects costs (see Article 42) or reduces the grant (see Article 43), it will calculate the ‘revised final grant amount’. This amount is calculated by the [Commission][Agency] on the basis of the findings, as follows: - in case of rejection of costs: by applying the reimbursement rate to the revised eligible costs approved by the [Commission][Agency]; - in case of reduction of the grant: in proportion to the seriousness of its breach of obligations (see Article 43.2). In case of rejection of costs and reduction of the grant, the revised final grant amount will be the lower of the two amounts above. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 663 ARTICLE 6 — ELIGIBLE AND INELIGIBLE COSTS 1. Eligible costs The MGA Lump sum has its own budget category, with its own types of costs, conditions for eligibility and rules for cost calculation. 2. Costs for the action: Types of costs — Cost form — Conditions for eligibility — Cost calculation 2.1 What? The budget category ‘costs’ covers the (direct and indirect) costs for the action. 2.2 These costs must be declared as the amount set out in the work programme/call. In practice the declaration of costs for lump sum grants is completely automatized. The coordinator only needs to sign and submit the financial statement (pre-filled by the IT system). 2.3 They must fulfil the following eligibility conditions: ARTICLE 6 — ELIGIBLE AND INELIGIBLE COSTS 6.1 Eligible costs Costs for the budget category: A. Costs for the action (direct and indirect costs) are eligible (‘eligible costs’), if they correspond to the lump sum set out in Annex 2 and if the corresponding tasks or parts of the action have been properly implemented in accordance with Annex 1. 6.2 Ineligible costs ‘Ineligible costs’ are: (a) costs that do not comply with the conditions set out above (see Article 6.1) and (b) costs reimbursed under another EU or Euratom grant (including grants awarded by a Member State and financed by the EU or Euratom budget and grants awarded by bodies other than the [Commission][Agency] for the purpose of implementing the EU and Euratom budget. [(c) OPTION for cost categories explicitly excluded in the work programme: [insert name of excluded cost category]]. 6.3 Consequences of declaration of ineligible costs Declared costs that are ineligible will be rejected (see Article 42). This may also lead to any of the other measures described in Chapter 6. The lump sum is deemed to cover ALL (direct and indirect) costs that are incurred for the action. NO other costs will be reimbursed. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 664  the action tasks must have been carried out as described in Annex 1. 2.4 NO cost calculation is necessary (since it is a fixed global amount). By signing the financial statement (for multi-beneficiary actions: one common financial statement for the consortium; see Article 20), the beneficiaries automatically declare the amount set out in the work programme/call as the total eligible costs of the action (the amount is fixed and pre-filled by the IT system). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 665 ARTICLE 7 — GENERAL OBLIGATION TO PROPERLY IMPLEMENT THE ACTION 1. Consequences of improper implementation Since the lump sum grant consists in a lump sum, ‘improper implementation of the action not in accordance with Annex 1’ does NOT lead to a reduction of the grant, but to the ineligibility of the costs (see Article 6.1). By contrast, if ‘other obligations’ have been breached (e.g. other provisions of the GA or provisions of EU, international and national law are not complied with), the grant may be reduced (see Article 43). If the action is not carried out as described in Annex 1, costs will be rejected proportionally to the tasks or parts of the action not implemented (see Article 42). . ARTICLE 7 — GENERAL OBLIGATION TO PROPERLY IMPLEMENT THE ACTION 7.1 General obligation to properly implement the action The beneficiaries must implement the action as described in Annex 1 and in compliance with the provisions of the Agreement and all legal obligations under applicable EU, international and national law. 7.2 Consequences of non-compliance If a beneficiary does not properly implement the action (or part of it), the corresponding costs will be ineligible (see Article 6) and will be rejected (see Article 42). If a beneficiary breaches any other obligation, the grant may be reduced (see Article 43). This may also lead to any of the other measures described in Chapter 6. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 666 ARTICLE 8 — RESOURCES TO IMPLEMENT THE ACTION—THIRD PARTIES INVOLVED IN THE ACTION 1. Appropriate own resources — Use of third party resources — Third parties involved in the action The rules of the General MGA on third party involvement are only partly applicable. The rules on third party involvement in lump sum actions are limited to purchases (Article 10), subcontracting (Article 13) and linked third parties (Article 14). The provisions on in-kind contributions (Articles 11 and 12 H2020 General MGA) do NOT apply — since, for lump sum grants, in-kind contributions are not linked to any specific conditions. (Specific rules are only needed where a grant reimburses actual costs). ARTICLE 8 — RESOURCES TO IMPLEMENT THE ACTION — THIRD PARTIES INVOLVED IN THE ACTION The beneficiaries must have the appropriate resources to implement the action. If it is necessary to implement the action, the beneficiaries may: - purchase goods, works and services (see Article 10); - call upon subcontractors to implement action tasks described in Annex 1 (see Article 13); - call upon linked third parties to implement action tasks described in Annex 1 (see Article 14). In these cases, the beneficiaries retain sole responsibility towards the [Commission][Agency] for implementing the action. For all types of third party involvement (purchases, subcontracts, linked third parties, in-kind contributions), the costs are ALL covered by the lump sum. NO other costs will be reimbursed. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 667 ARTICLE 10 — PURCHASE OF GOODS, WORKS OR SERVICES 1. Purchase of goods, works or services The rules on contracts for the purchase of goods, works or services for Lump sum actions are almost identical to the General MGA (see Article 13 H2020 General MGA). The obligations in Article 10.1.1 are however NOT considered to be additional eligibility conditions, but ‘other obligations’. In case of breach, the Commission/Agency may therefore reduce the grant in proportion to the seriousness of the breach (instead of rejecting the costs). ARTICLE 10 — PURCHASE OF GOODS, WORKS OR SERVICES 10.1 Rules for purchasing goods, works or services 10.1.1 If necessary to implement the action, the beneficiaries may purchase goods, works or services. The beneficiaries must make such purchases ensuring the best value for money or, if appropriate, the lowest price. In doing so, they must avoid any conflict of interests (see Article 35). The beneficiaries must ensure that [the Agency,] the Commission, the European Court of Auditors (ECA) and the European Anti-Fraud Office (OLAF) can exercise their rights under Articles 22 and 23 also towards their contractors. 10.1.2 Beneficiaries that are ‘contracting authorities’ within the meaning of Directive 2004/18/EC24 9 or ‘contracting entities’ within the meaning of Directive 2004/17/EC25 10 must comply with the applicable national law on public procurement. 10.2 Consequences of non-compliance If a beneficiary breaches any of its obligations under this Article, the grant may be reduced (see Article 43). Such breaches may also lead to any of the other measures described in Chapter 6. 9 Directive 2014/18/EC of the European Parliament and of the Council of 31 March 2014 on the coordination of procedures for the award of public work contracts, public supply contracts and public service contracts (OJ L 134, 30.04.2004, p. 114). 10 Directive 2014/17/EC of the European Parliament and of the Council of 31 March 2014 coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors (OJ L 134, 30.04.2004, p. 1). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 668 ARTICLE 13 — IMPLEMENTATION OF ACTION TASKS BY SUBCONTRACTORS 1. Subcontracting The rules on subcontracting for lump sum actions are similar to the General MGA (see Articles 8 and 13 H2020 General MGA). The MGA Lump sum has however the following specificities: The estimated costs do NOT have to be included in Annex 1 or shown in the table of estimated costs of Annex 2 (since they are covered by the lump sum). The obligations in Article 13.1 are NOT considered to be additional eligibility conditions, but ‘other obligations’. In case of breach, the Commission/Agency may therefore reduce the grant in proportion to the seriousness of the breach (instead of rejecting the costs). ARTICLE 13 — IMPLEMENTATION OF ACTION TASKS BY SUBCONTRACTORS 13.1 Rules for subcontracting action tasks If necessary to implement the action, the beneficiaries may award subcontracts covering the implementation of certain action tasks described in Annex 1. Subcontracting may cover only a limited part of the action. The beneficiaries must award the subcontracts ensuring the best value for money or, if appropriate, the lowest price. In doing so, they must avoid any conflict of interests (see Article 35). [OPTION for classified results: Classified results may be subcontracted only after explicit approval (in writing) from the [Commission][Agency] (see Article 37).] The beneficiaries must ensure that [the Agency,] the Commission, the European Court of Auditors (ECA) and the European Anti-Fraud Office (OLAF) can exercise their rights under Articles 22 and 23 also towards their subcontractors. The beneficiaries must ensure that their obligations under Articles 35, 36, 38 and 46 also apply to the subcontractors. Beneficiaries that are ‘contracting authorities’ within the meaning of Directive 2004/18/EC or ‘contracting entities’ within the meaning of Directive 2004/17/EC must comply with the applicable national law on public procurement. 13.2 Consequences of non-compliance If a beneficiary breaches any of its obligations under this Article, the grant may be reduced (see Article 43). Such breaches may also lead to any of the other measures described in Chapter 6. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 669 ARTICLE 18 — KEEPING RECORDS — SUPPORTING DOCUMENTATION 1. Records and other supporting documentation For lump sum actions, beneficiaries do not need to keep full records on their actual costs; they only need to keep the evidence (documentation, records) that the action’s tasks (as described in Annex 1) were properly carried out. Such records and supporting documentation must:  refer to the scientific and technical implementation of the action in line with the accepted standards in the respective field (see Article 18.1.1) and ARTICLE 18 — KEEPING RECORDS — SUPPORTING DOCUMENTATION 18.1 Obligation to keep records and other supporting documentation The beneficiaries must — for a period of [OPTION by default: five][OPTION for low value grants 13 : three] years after the payment of the balance — keep adequate records and other supporting documentation to prove the proper implementation of the action and the costs they declare as eligible. They must make them available upon request (see Article 17) or in the context of checks, reviews, audits or investigations (see Article 22). If there are on-going checks, reviews, audits, investigations, litigation or other pursuits of claims under the Agreement (including the extension of findings; see Article 22), the beneficiaries must keep the records and other supporting documentation until the end of these procedures. The beneficiaries must keep the original documents. Digital and digitalised documents are considered originals if they are authorised by the applicable national law. The [Commission][Agency] may accept non- original documents if it considers that they offer a comparable level of assurance 18.1.1 Records and other supporting documentation on the scientific and technical implementation The beneficiaries must keep records and other supporting documentation on scientific and technical implementation of the action in line with the accepted standards in the respective field. 18.1.2 Records and other documentation to support the costs declared The beneficiaries must keep adequate records and documentation and other supporting documentation to prove that the corresponding tasks or part of the action as described in Annex 1 were implemented properly. The beneficiaries do not need to identify the actual eligible costs covered or provide supporting documentation (such as accounting statements) to prove the amount declared as a lump sum. 18.2 Consequences of non-compliance If a beneficiary breaches any of its obligations under this Article, costs insufficiently substantiated will be ineligible (see Article 6) and will be rejected (see Article 42). Such breaches may also lead to any of the other measures described in Chapter 6. 13 For the definition, see Article 185 of Commission Delegated Regulation (EU) No 1268/2012 of 29 October 2012 on the rules of application of Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council on the financial rules applicable to the general budget of the Union (OJ L 362, 31.12.2012, p. 1) ('Rules of Application Regulation No 1268/2012'): 'low value grants' are lower or equal to EUR 60 000. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 670  prove that the corresponding tasks or part of the action allocated to the beneficiary as described in Annex 1 were implemented properly (see Article 18.1.2). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 671 ARTICLE 20 — REPORTING — PAYMENT REQUESTS ARTICLE 20 — REPORTING — PAYMENT REQUESTS 20.1 Obligation to submit reports The coordinator must submit to the [Commission][Agency] (see Article 52) the reports set out in this Article. These reports include the request for payment and must be drawn up using the forms and templates provided in the electronic exchange system (see Article 52). 20.2 Reporting periods The action is divided into the following ‘reporting periods’: - RP1: from month 1 to month [X] [- RP2: from month [X+1] to month [Y] - RP3: from month [Y+1] to month [Z] [same for other RPs] - RPN: from month [N+1] to [the last month of the project].] 20.3 Periodic reports — Requests for further pre-financing payments The coordinator must submit a periodic report within 60 days following the end of each reporting period. The periodic report must include the following: (a) a ‘periodic technical report’ containing: (i) an explanation of the work carried out by the beneficiaries; (ii) an overview of the progress towards the objectives of the action, including milestones and deliverables identified in Annex 1. This report must include explanations justifying the differences between work expected to be carried out in accordance with Annex 1 and that actually carried out. The report must also detail the exploitation and dissemination of the results and — if required in Annex 1 — an updated ‘plan for the exploitation and dissemination of the results’; (iii) a summary for publication by the [Commission][Agency]; (iv) the answers to the ‘questionnaire’, covering issues related to the action implementation and the economic and societal impact, notably in the context of the Horizon 2020 key performance indicators and the Horizon 2020 monitoring requirements; (b) a 'statement on the use of the previous pre-financing instalment', including the request for a further pre-financing payment (Annex 7). 20.4 Final report — Request for payment of the balance The coordinator must submit to the [Commission][Agency] (see Article 52) — within 60 days following the end of the reporting period — a final report, which includes the request for payment of the balance. The final report must include the following: H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 672 (a) a ‘final technical report’ containing a summary with: (iv) an overview of the results; (v) the conclusions on the action; (vi) the answers to the ‘questionnaire’, covering issues related to the action implementation and the economic and societal impact, notably in the context of the Horizon 2020 key performance indicators and the Horizon 2020 monitoring requirements. (b) a ‘final financial report’ containing: (i) a ‘financial statement’ from the consortium (see Annex 4), which includes the request for payment of the balance. The financial statement must detail the eligible costs (lump sum costs; see Article 6 and Annex 2). Amounts which are not declared in the financial statement will not be taken into account by the [Commission][Agency]. The consortium must certify that: - the information provided is full, reliable and true; - the costs declared are eligible (i.e. that the action has been properly implemented; see Article 6); - the costs (i.e. the proper implementation of the action) can be substantiated by adequate records and supporting documentation (see Article 18) that will be produced upon request (see Article 17) or in the context of checks, reviews, audits and investigations (see Article 22). (ii) [OPTION if the JRC is a beneficiary: information on the amount of the payment of the balance to be paid by the [Commission][Agency] to the Joint Research Centre (JRC);][OPTION: not applicable] 20.5 Information on cumulative expenditure incurred Not applicable 20.6 Currency for financial statements The financial statement must be drafted in euro. 20.7 Language of reports The reports must be submitted in the language of the Agreement. 20.8 Consequences of non-compliance — Suspension of the payment deadline — Termination If the reports submitted do not comply with this Article, the [Commission][Agency] may suspend the payment deadline (see Article 47) and apply any of the other measures described in Chapter 6. If the coordinator breaches its obligation to submit the reports and if it fails to comply with this obligation within 30 days following a written reminder sent by the [Commission][Agency], the Agreement may be terminated (see Article 50). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 673 1. Reports When & What? For lump sum actions, the coordinator has to submit — after each reporting period — a periodic technical report, with information on the technical implementation. NO financial report is needed during the action (i.e. no financial statements before the final report). The coordinator only has to sign and submit a 'statement on the use of the previous pre-financing instalment' (which includes also the request for further pre-financing payments; see Annex 7 ). List of documents for the periodic reports:  explanation of the work carried out  overview of the progress  summary for publication  questionnaire (i.e. the structured information requested)  statement on the use of the previous pre-financing instalment At the end of the action, the coordinator has to submit a final report with both the technical and financial report. 2. Reporting periods When? The lump sum actions are normally divided into several reporting periods and each reporting period triggers a further pre-financing. Each reporting period triggers a periodic report. 3. Final financial report: Financial statement The financial statement (one common financial statement for the consortium) is automatically pre- filled by the system (with the amount set out in the work programme/call as final grant amount; see Article 5). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 674 ARTICLE 21 — PAYMENTS AND PAYMENT ARRANGEMENTS MONO-BENEFICIARY: ARTICLE 21 — PAYMENTS AND PAYMENT ARRANGEMENTS 21.1 Payments to be made The following payments will be made to the beneficiary: - one pre-financing payment; - [a second pre-financing payment, on the basis of the request for a second pre-financing payment (see Article 20);] - [a third pre-financing payment, on the basis of the request for a third pre-financing payment (see Article 20);] [same for more pre-financing payments] - one payment of the balance, on the basis of the request for payment of the balance (see Article 20) 21.2 Pre-financing payment — Amount — Amount retained for the Guarantee Fund [OPTION 1 by default: The aim of the pre-financing is to provide the beneficiary with a float. It remains the property of the EU until the payment of the balance. The [Commission][Agency] will — within 30 days, either from the entry into force of the Agreement (see Article 58) or from 10 days before the starting date of the action (see Article 3), whichever is the latest — make a first pre-financing payment to the coordinator of EUR [insert amount (insert amount in words)], except if Article 48 applies. From this amount, an amount of EUR [insert amount (insert amount in words)], corresponding to 5% of the maximum grant amount (see Article 5.1), is retained by the [Commission][Agency] and transferred into the ‘Guarantee Fund’. [OPTION in case of two pre-financing payments: The [Commission][Agency] will — within 60 days after receiving the request (see Article 20) — make a second pre-financing payment to the coordinator of EUR [insert amount (insert amount in words)], except if Articles 47 or 48 apply. If the statement on the use of the previous pre-financing instalment shows that less than 70% of the previous instalment paid has been used to cover the costs of the action, the amount of the new pre-financing to be paid will be reduced by the difference between the 70% threshold and the amount used.] [OPTION in case of three pre-financing payments: The [Commission][Agency] will — within 60 days after receiving the request (see Article 20) — make a third pre-financing payment to the coordinator of EUR [insert amount (insert amount in words)], except if Articles 47 or 48 apply. If the statement on the use of the previous pre-financing instalment shows that less than 70% of the previous instalment paid has been used to cover the costs of the action, the amount of the new pre-financing to be paid will be reduced by the difference between the 70% threshold and the amount used.] [same for more pre-financing payments]] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 675 [OPTION 2 if JRC is the beneficiary: The [DG][Agency] will make a [first] pre-financing payment to the coordinator of EUR [insert amount including the 5% to be paid to the Guarantee Fund (insert amount in words)] within 30 days from the submission of a debit note from the JRC after the signature of the 'Agreement'. The JRC agrees that the amount of EUR [insert amount: 5% of the grant amount intended for the JRC (insert amount in words)], corresponding to its contribution to the Guarantee Fund (see Article 21.2), is transferred in its name by the [DG][Agency] to the Guarantee Fund. [OPTION if the JRC is the beneficiary and in case of two pre-financing payments: The [DG][Agency] will make a second pre-financing payment to the coordinator of EUR [insert amount (insert amount in words)] within 30 days from the submission of a debit note from the JRC after the signature of the 'Agreement'. If statement on the use of the previous pre-financing instalment shows that less than 70% of the previous instalment paid has been used to cover the costs of the action, the amount of the new pre-financing to be paid will be reduced by the difference between the 70% threshold and the amount used.] [same for more pre-financing payments]] The total amount of pre-financing payments must not exceed 90% of the maximum grant amount set out in Article 5.1 21.3 Interim payments — Amount — Calculation Not applicable 21.4 Payment of the balance — Amount — Calculation — Release of the amount retained for the Guarantee Fund The payment of the balance reimburses the remaining part of the eligible costs incurred by the beneficiary for the implementation of the action. If the total amount of earlier payments is greater than the final grant amount (see Article 5.3), the payment of the balance takes the form of a recovery (see Article 44). If the total amount of earlier payments is lower than the final grant amount, the [Commission][Agency] will pay the balance within 90 days from receiving the final report (see Article 20.4), except if Articles 47 or 48 apply. Payment is subject to the approval of the final report. Its approval does not imply recognition of the compliance, authenticity, completeness or correctness of its content. The amount due as the balance is calculated by the [Commission][Agency] by deducting the total amount of pre-financing already made, from the final grant amount determined in accordance with Article 5.3: {final grant amount (see Article 5.3) minus pre-financing made}. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 676 At the payment of the balance, the amount retained for the Guarantee Fund (see above) will be released and: - if the balance is positive: the amount released will be paid in full to the beneficiary together with the amount due as the balance; - if the balance is negative (payment of the balance taking the form of recovery): it will be deducted from the amount released (see Article 44.1.2). If the resulting amount: - is positive, it will be paid to the beneficiary - is negative, it will be recovered from the beneficiary. The amount to be paid may however be offset — without the beneficiary’s consent — against any other amount owed by the beneficiary to the [Agency, the] Commission or an[other] executive agency (under the EU or Euratom budget), up to the maximum grant amount set out in Article 5.1. 21.5 Notification of amounts due The [Commission][Agency] will formally notify to the beneficiary the amount due and specify the final grant amount. In the case of reduction of the grant or recovery of undue amounts, the notification will be preceded by the contradictory procedure set out in Articles 43 and 44. […] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 677 MULTI-BENEFICIARY: ARTICLE 21 — PAYMENTS AND PAYMENT ARRANGEMENTS […] 21.4 Payment of the balance — Amount — Calculation — Release of the amount retained for the Guarantee Fund The payment of the balance reimburses the remaining part of the eligible costs incurred by the beneficiaries for the implementation of the action. If the total amount of earlier payments is greater than the final grant amount (see Article 5.3), the payment of the balance takes the form of a recovery (see Article 44). If the total amount of earlier payments is lower than the final grant amount, the [Commission][Agency] will pay the balance within 90 days from receiving the final report (see Article 20.4), except if Articles 47 or 48 apply. Payment is subject to the approval of the final report. Its approval does not imply recognition of the compliance, authenticity, completeness or correctness of its content. The amount due as the balance is calculated by the [Commission][Agency] by deducting the total amount of pre-financing already made, from the final grant amount determined in accordance with Article 5.3: {final grant amount (see Article 5.3) minus pre-financing made}. At the payment of the balance, the amount retained for the Guarantee Fund (see above) will be released and: - if the balance is positive: the amount released will be paid in full to the coordinator together with the amount due as the balance; - if the balance is negative (payment of the balance taking the form of recovery): it will be deducted from the amount released (see Article 44.1.2). If the resulting amount: - is positive, it will be paid to the coordinator - is negative, it will be recovered from the coordinator. The amount to be paid may however be offset — without the coordinator’s consent — against any other amount owed by the coordinator to the [Agency, the] Commission or an[other] executive agency (under the EU or Euratom budget), up to the maximum grant amount set out in Article 5.1. […] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 678 1. Payments— No interim payments Lump sum actions are divided into several reporting periods with pre-financing payments (each reporting period triggering a pre-financing). Only the first pre-financing payment is automatic. Further pre-financing payments must be requested by the coordinator via a 'statement on the use of the previous pre-financing payment' (see Article 20). There are NO interim payments. The balance is paid when the action ends. 2. Amount of pre-financing payment(s) How much? There is no standard amount (or percentage) for pre-financing payments; the amount is fixed in each GA. 3. Amount of the payment of the balance The amount of the payment of the balance depends on:  the amount of pre-financing(s) already paid (see Article 21.2)  the proper implementation of the action (see Article 42) and The total amount of pre-financing can NOT exceed 90 % of the maximum grant amount (see Article 5.1). The further (i.e. second/third/same for more) pre-financing payment(s) will be reduced, if — according to the statement on the use of the previous pre-financing payment — the previous pre-financing was insufficiently used:  if 70% or more of the previous pre-financing has been used: the next pre-financing is paid in full  if less than 70% of the previous pre-financing has been used: the next pre-financing will be reduced by an amount equal to the difference between the percentage actually used and 70%. Example: Consortium with a maximum grant amount of EUR 400 000 (100% reimbursement rate) and 3 reporting periods. 90% limit of the maximum grant amount: EUR 360 000. 3 Pre-financing payments: EUR 100 000; EUR 120 000 and EUR 140 000. Statement on the use of previous pre-financing submitted by the Consortium: 70% of the 1st pre-financing and 60% of the 2nd pre-financing payment. 2nd pre-financing payment of EUR 120 000 is paid in full since the consortium used 70% of the 1st pre- financing; 3rd pre-financing to the coordinator must be reduced because the consortium used only 60% of the 2nd pre-financing; Pre-financing actually used: EUR 120 000 * 60% = EUR 72 000 70% of the 2nd pre-financing payment: EUR 120 000 * 70% = EUR 84 000 Reduction due to 70% consumption rule: EUR 84 000 – EUR 72 000 = EUR 12 000 3rd pre-financing paid to the consortium: EUR 140 000 – EUR 12 000 = EUR 128 000. . H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 679  any breach of ‘other obligations’ (i.e. other than improper implementation of the action) (see Article 43). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 680 ARTICLE 41 — DIVISION OF THE BENEFICIARY’S ROLES AND RESPONSIBILITIES — RELATIONSHIP WITH COMPLEMENTARY BENEFICIARIES — RELATIONSHIP WITH PARTNERS OF A JOINT ACTION MONO-BENEFICIARY: ARTICLE 41 — DIVISION OF BENEFICIARIES’ ROLES AND RESPONSIBILITIES — RELATIONSHIP WITH COMPLEMENTARY BENEFICIARIES — RELATIONSHIP WITH PARTNERS OF A JOINT ACTION 41.1 Role and responsibility towards the [Commission][Agency] The beneficiary has full responsibility for implementing the action and complying with the Agreement. The beneficiary is itself responsible for: (a) monitoring that the action is implemented properly (see Article 7); (b) informing the [Commission][Agency] immediately of any events or circumstances likely to affect significantly or delay the implementation of the action (see Article 17); (c) submit the deliverables and the report to the [Commission][Agency] (see Articles 19 and 20); (d) submit to the [Commission][Agency] in good time any documents or information required by it and may not subcontract these tasks to any third party. 41.2 Internal division of roles and responsibilities Not applicable […] MULTI-BENEFICIARY: ARTICLE 41 — DIVISION OF BENEFICIARIES’ ROLES AND RESPONSIBILITIES — RELATIONSHIP WITH COMPLEMENTARY BENEFICIARIES — RELATIONSHIP WITH PARTNERS OF A JOINT ACTION 41.1 Roles and responsibilities towards the [Commission][Agency] The beneficiaries have full responsibility for implementing the action and complying with the Agreement. The beneficiaries are jointly and severally liable for the technical implementation of the action as described in Annex 1. If a beneficiary fails to implement its part of the action, the other beneficiaries become responsible for implementing this part (without being entitled to any additional EU funding for doing so), unless the [Commission][Agency] expressly relieves them of this obligation. The financial responsibility of each beneficiary is governed by Articles 44, 45 and 46. 41.2 Internal division of roles and responsibilities The internal roles and responsibilities of the beneficiaries are divided as follows: (a) Each beneficiary must: (i) keep information stored in the Beneficiary Register (via the electronic exchange system) up to date (see Article 17); (ii) inform the coordinator immediately of any events or circumstances likely to affect significantly or delay the implementation of the action (see Article 17); H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 681 1. Division of roles and responsibilities — Responsibilities towards the Commission/Agency The rules on internal division of roles and responsibilities are similar to the General MGA (see Article 41 H2020 General MGA). Since for lump Sum multi-beneficiary actions there is however only one (common) financial statement (see Article 20), there is NO obligation for the beneficiaries to submit their own individual financial statements to the coordinator. (iii) submit to the coordinator in good time: - the data needed to draw up the technical report (see Article 20); - ethics committee opinions and notifications or authorisations for activities raising ethical issues (see Article 34); - any other documents or information required by the [Agency or] the Commission under the Agreement, unless the Agreement requires the beneficiary to submit this information directly to the [Agency or] the Commission. (b) The coordinator must: (i) monitor that the action is implemented properly (see Article 7); (ii) act as the intermediary for all communications between the beneficiaries and the Agency (in particular, providing the [Commission][Agency] with the information described in Article 17), unless the Agreement specifies otherwise; (iii) request and review any documents or information required by the Agency and verify their completeness and correctness before passing them on to the [Commission][Agency]; (iv) submit the deliverables and the report to the [Commission][Agency] (see Articles 19 and 20); (v) ensure that all payments are made to the other beneficiaries without unjustified delay (see Article 21); (vi) inform the [Commission][Agency] of the amounts paid to each beneficiary, when required under the Agreement (see Articles 44 and 50) or requested by the Agency. The coordinator may not delegate the above-mentioned tasks to any other beneficiary or subcontract them to any third party. [OPTION to be used when the coordinator is a secondary or higher education establishment or public body and there is an ‘authorisation to administer’ given to a third party created, controlled or affiliated to the coordinator: As an exception, the coordinator delegates the tasks set out in Point 2(b)(v) and (vi) above to [insert name of third party with an authorisation to administer]. The coordinator retains sole responsibility for the EU contribution and for compliance with the obligations under the Agreement.] […] H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 682 ARTICLE 42 — REJECTION OF INELIGIBLE COSTS 1. Rejection of ineligible costs The rules on rejection of ineligible costs are in principle the same as in the General MGA (see Article 42 H2020 General MGA). However, since lump sum grants consist in a lump sum, the main cost eligibility condition refers to ‘proper implementation of the action in accordance with Annex 1’ (see Article 6.1). Improper implementation therefore leads to the ineligibility of the costs (NOT reduction of the grant; see also Article 7). If the action is not carried out as described in Annex 1, the costs will be considered ineligible and rejected proportionally to the tasks or parts of the action not implemented. ‘Rejection of costs’ will be made for improper implementation of the action (see Article 7). . ARTICLE 42 — REJECTION OF INELIGIBLE COSTS 42.1 Conditions 42.1.1 The [Commission][Agency] will — at the payment of the balance or afterwards — reject any costs which are ineligible (i.e. if the action as described in Annex 1 is not properly implemented; see Article 6), in particular following checks, reviews, audits or investigations (see Article 22). 42.1.2 The rejection may also be based on the extension of findings from other grants to this grant, under the conditions set out in Article 22.5.2. 42.2 Ineligible costs to be rejected — Calculation — Procedure Ineligible costs will be rejected proportionally to the tasks or parts of the action not implemented. If the [Commission][Agency] rejects costs without reduction of the grant (see Article 43) or recovery of undue amounts (see Article 44), it will formally notify the coordinator or beneficiary concerned the rejection of costs, the amounts and the reasons why (if applicable, together with the notification of amounts due; see Article 21.5). The coordinator or beneficiary concerned may — within 30 days of receiving notification — formally notify the [Commission][Agency] of its disagreement and the reasons why. If the [Commission][Agency] rejects costs with reduction of the grant or recovery of undue amounts, it will formally notify the rejection in the ‘pre-information letter’ on reduction or recovery set out in Articles 43 and 44. 42.3 Effects If the [Commission][Agency] rejects costs at the payment of the balance, it will deduct them from the total eligible costs declared, for the action, in the financial statement (see Article 20.4). It will then calculate the payment of the balance as set out in Article 21.4. If the [Commission][Agency] rejects costs after the payment of the balance, it will deduct the amount rejected from the total eligible costs declared, by the beneficiary, in the financial statement. It will then calculate the revised final grant amount as set out in Article 5.4. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 683 ARTICLE 43 — REDUCTION OF THE GRANT 1. Reduction of the grant The rules on rejection of ineligible costs are in principle the same as in the General MGA (see Article 42 H2020 General MGA). However, since lump sum grants consist in a lump sum, ‘proper implementation of the action in accordance with Annex 1’ is an eligibility rule and does NOT lead to the reduction of the grant (see also Articles 6.1 and 7). The grant may thus be reduced if ‘other obligations’ have been breached (e.g. another obligation under the GA or applicable EU, international and national law; see Article 43 H2020 General MGA). A ‘reduction of the grant’ is possible for any breach of obligation other than proper implementation (under the GA or applicable EU, international and national law; see Article 7). . ARTICLE 43 — REDUCTION OF THE GRANT 43.1 Conditions 43.1.1 The [Commission][Agency] may — at the payment of the balance or afterwards — reduce the maximum grant amount (see Article 5.1), if an obligation under the Agreement (other than improper implementation of the action as described in Annex 1) has been breached. 43.1.2 The [Commission] [Agency] may also reduce the maximum grant amount on the basis of the extension of findings from other grants to this grant, under the conditions set out in Article 22.5.2. 43.2 Amount to be reduced — Calculation — Procedure The amount of the reduction will be proportionate to the seriousness of the breach. Before reduction of the grant, the [Commission][Agency] will formally notify a ‘pre-information letter’ to the coordinator or beneficiary concerned: - informing it of its intention to reduce the grant, the amount it intends to reduce and the reasons why and - inviting it to submit observations within 30 days of receiving notification. If the [Commission][Agency] does not receive any observations or decides to pursue reduction despite the observations it has received, it will formally notify confirmation of the reduction (if applicable, together with the notification of amounts due; see Article 21). 43.3 Effects If the [Commission][Agency] reduces the grant at the time of the payment of the balance, it will calculate the reduced grant amount for the action and then determine the amount due as payment of the balance (see Articles 5.3.4 and 21.4). If the [Commission][Agency] reduces the grant after the payment of the balance, it will calculate the revised final grant amount for the beneficiary concerned (see Article 5.4). If the revised final grant amount for the beneficiary concerned is lower than its share of the final grant amount, the [Commission][Agency] will recover the difference (see Article 44). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 684 ARTICLE 44 — RECOVERY OF UNDUE AMOUNTS MONO-BENEFICIARY: ARTICLE 44 — RECOVERY OF UNDUE AMOUNTS 44.1 Amount to be recovered — Calculation — Procedure The [Commission][Agency] will —at the payment of the balance or afterwards — claim back any amount that was paid, but is not due under the Agreement. 44.1.1 Recovery after termination of a beneficiary’s participation Not applicable 44.1.2 Recovery at payment of the balance If the payment of the balance takes the form of a recovery (see Article 21.4), the [Commission][Agency] will formally notify a ‘pre-information letter’ to the beneficiary: - informing it of its intention to recover, the amount due as the balance and the reasons why; - specifying that it intends to deduct the amount to be recovered from the amount retained for the Guarantee Fund, and - inviting it to submit observations within 30 days of receiving notification. If no observations are submitted or the [Commission][Agency] decides to pursue recovery despite the observations it has received, it will confirm recovery (together with the notification of amounts due; see Article 21.5) and: - pay the difference between the amount to be recovered and the amount retained for the Guarantee Fund, if the difference is positive or - formally notify to the beneficiary a debit note for the difference between the amount to be recovered and the amount retained for the Guarantee Fund, if the difference is negative. This note will also specify the terms and the date for payment. If payment is not made by the date in the debit note, [Commission][Agency] will recover the amount: (a) by offsetting it — without the beneficiary’s consent — against any amounts owed to the beneficiary by the [Agency, the] Commission or an[other] executive agency (from the EU or Euratom budget). In exceptional circumstances, to safeguard the EU’s financial interests, the [Commission][Agency] may offset before the payment date specified in the debit note; (b) by drawing on the Guarantee Fund. The [Agency or the] Commission will formally notify the beneficiary the debit note on behalf of the Guarantee Fund and recover the amount: (i) [OPTION if Article 14 applies and joint and several liability has been requested by the [Commission][Agency]: if a linked third party has accepted joint and several liability (see Article 14), by holding the third party liable up to the maximum EU contribution indicated, for the beneficiary, in the estimated budget (see Annex 2) and/or][OPTION: not applicable;] (ii) by taking legal action (see Article 57) or by adopting an enforceable decision under Article 299 of the Treaty on the Functioning of the EU (TFEU) and Article 79(2) of the Financial Regulation No 966/2012. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 685 If payment is not made by the date in the debit note, the amount to be recovered (see above) will be increased by late-payment interest at the rate set out in Article 21.11, from the day following the payment date in the debit note, up to and including the date [the Agency or] the Commission receives full payment of the amount. Partial payments will be first credited against expenses, charges and late-payment interest and then against the principal. Bank charges incurred in the recovery process will be borne by the beneficiary, unless Directive 2007/64/EC applies. 44.1.3 Recovery of amounts after payment of the balance If the revised final grant amount (see Article 5.4) is lower than the final grant amount, the beneficiary must repay the difference to the [Commission][Agency]. The [Commission][Agency] will formally notify a pre-information letter to the beneficiary: - informing it of its intention to recover, the due amount and the reasons why and - inviting it to submit observations within 30 days of receiving notification. If no observations are submitted or the [Commission][Agency] decides to pursue recovery despite the observations it has received, it will confirm the amount to be recovered and formally notify to the beneficiary a debit note. This note will also specify the terms and the date for payment. If payment is not made by the date specified in the debit note, the [Commission][Agency] will recover the amount: (c) by offsetting it — without the beneficiary’s consent — against any amounts owed to the beneficiary by [the Agency,] the Commission or an[other] executive agency (from the EU or Euratom budget). In exceptional circumstances, to safeguard the EU’s financial interests, the [Commission][Agency] may offset before the payment date specified in the debit note; (d) by drawing on the Guarantee Fund. The [Agency or the] Commission will formally notify the beneficiary the debit note on behalf of the Guarantee Fund and recover the amount: (i) [OPTION if Article 14 applies and joint and several liability has been requested by the [Commission][Agency]: if a linked third party has accepted joint and several liability (see Article 14), by holding the third party liable up to the maximum EU contribution indicated, for the beneficiary, in the estimated budget (see Annex 2) and/or] [OPTION: not applicable;] (ii) by taking legal action (see Article 57) or by adopting an enforceable decision under Article 299 of the Treaty on the Functioning of the EU (TFEU) [, Article 106a of the Euratom Treaty] and Article 79(2) of the Financial Regulation No 966/2012. If payment is not made by the date in the debit note, the amount to be recovered (see above) will be increased by late-payment interest at the rate set out in Article 21.11, from the day following the date for payment in the debit note, up to and including the date [the Agency or] the Commission receives full payment of the amount. Partial payments will be first credited against expenses, charges and late-payment interest and then against the principal. Bank charges incurred in the recovery process will be borne by the beneficiary, unless Directive 2007/64/EC applies. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 686 MULTI-BENEFICIARY: ARTICLE 44 — RECOVERY OF UNDUE AMOUNTS 44.1 Amount to be recovered — Calculation — Procedure The [Commission][Agency] will —at the payment of the balance or afterwards — claim back any amount that was paid, but is not due under the Agreement. 44.1.1 Recovery after termination of a beneficiary’s participation Not applicable 44.1.2 Recovery at payment of the balance If the payment of the balance takes the form of a recovery (see Article 21.4), the [Commission][Agency] will formally notify a ‘pre-information letter’ to the coordinator: - informing it of its intention to recover, the amount due as the balance and the reasons why; - specifying that it intends to deduct the amount to be recovered from the amount retained for the Guarantee Fund, and - inviting the coordinator to submit observations within 30 days of receiving notification. If no observations are submitted or the [Commission][Agency] decides to pursue recovery despite the observations it has received, it will confirm recovery (together with the notification of amounts due; see Article 21.5) and: - pay the difference between the amount to be recovered and the amount retained for the Guarantee Fund, if the difference is positive or - formally notify to the coordinator a debit note for the difference between the amount to be recovered and the amount retained for the Guarantee Fund, if the difference is negative. This note will also specify the terms and the date for payment. If the coordinator does not repay the [Commission][Agency] by the date in the debit note, [the Agency or] the Commission will recover the amount: (a) by offsetting it — without the coordinator’s consent — against any amounts owed to the coordinator by the [Agency, the] Commission or an[other] executive agency (from the EU or Euratom budget). In exceptional circumstances, to safeguard the EU’s financial interests, the [Commission][Agency] may offset before the payment date specified in the debit note; (b) by drawing on the Guarantee Fund. The [Agency or the] Commission will formally notify the coordinator the debit note on behalf of the Guarantee Fund and recover the amount: (i) [OPTION if Article 14 applies and joint and several liability has been requested by the [Commission][Agency]: if a linked third party to the coordinator has accepted joint and several liability (see Article 14), by holding the third party liable up to the maximum EU contribution indicated for the consortium in the estimated budget (see Annex 2) and/or][OPTION: not applicable;] (ii) by taking legal action (see Article 57) or by adopting an enforceable decision under Article 299 of the Treaty on the Functioning of the EU (TFEU) and Article 79(2) of the Financial Regulation No 966/2012. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 687 If payment is not made by the date in the debit note, the amount to be recovered (see above) will be increased by late-payment interest at the rate set out in Article 21.11, from the day following the payment date in the debit note, up to and including the date [the Agency or] the Commission receives full payment of the amount. Partial payments will be first credited against expenses, charges and late-payment interest and then against the principal. Bank charges incurred in the recovery process will be borne by the coordinator, unless Directive 2007/64/EC applies. 44.1.3 Recovery of amounts after payment of the balance If the revised final grant amount (see Article 5.4) is lower than the final grant amount, the coordinator must repay the difference to the [Commission][Agency]. The [Commission][Agency] will formally notify a pre-information letter to the coordinator: - informing it of its intention to recover, the due amount and the reasons why and - inviting it to submit observations within 30 days of receiving notification. If no observations are submitted or the [Commission][Agency] decides to pursue recovery despite the observations it has received, it will confirm the amount to be recovered and formally notify to the coordinator a debit note. This note will also specify the terms and the date for payment. If payment is not made by the date specified in the debit note, the [Commission][Agency] will recover the amount: (a) by offsetting it — without the coordinator’s consent — against any amounts owed to the coordinator by [the Agency,] the Commission or an[other] executive agency (from the EU or Euratom budget). In exceptional circumstances, to safeguard the EU’s financial interests, the [Commission][Agency] may offset before the payment date specified in the debit note; (b) by drawing on the Guarantee Fund. The [Agency or the] Commission will formally notify the coordinator the debit note on behalf of the Guarantee Fund and recover the amount: (i) [OPTION if Article 14 applies and joint and several liability has been requested by the [Commission][Agency]: if a linked third party to the coordinator has accepted joint and several liability (see Article 14), by holding the third party liable up to the maximum EU contribution indicated for the consortium in the estimated budget (see Annex 2) and/or] [OPTION: not applicable;] (ii) by taking legal action (see Article 57) or by adopting an enforceable decision under Article 299 of the Treaty on the Functioning of the EU (TFEU) [, Article 106a of the Euratom Treaty] and Article 79(2) of the Financial Regulation No 966/2012. If payment is not made by the date in the debit note, the amount to be recovered (see above) will be increased by late-payment interest at the rate set out in Article 21.11, from the day following the date for payment in the debit note, up to and including the date [the Agency or] the Commission receives full payment of the amount. Partial payments will be first credited against expenses, charges and late-payment interest and then against the principal. Bank charges incurred in the recovery process will be borne by the coordinator, unless Directive 2007/64/EC applies. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 688 1. Recovery of undue amounts The rules on recovery of undue amounts are in principle the same as in the General MGA (see Article 44 H2020 General MGA). The lump sum multi-beneficiary MGA has, however, the following specificities: Since the coordinator alone is financially responsible (for the entire grant) the Commission/Agency will recover ONLY from it. Best practice: Beneficiaries should foresee internal arrangements (e.g. in the consortium agreement) to redistribute the financial responsibility internally in the consortium in a fair way. There is therefore also NO need for a 'report on the distribution of payments' between beneficiaries. Specific cases: Coordinator with linked third party with joint and several liability — If a linked third party to the coordinator has accepted joint and several liability (see Article 14 H2020 General MGA), the Commission/Agency may also recover the amount unduly paid by holding the third party liable — up to the maximum EU contribution indicated for the consortium in the estimated budget (Annex 2). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 689 ARTICLE 49 — SUSPENSION OF THE ACTION IMPLEMENTATION ARTICLE 49 — SUSPENSION OF THE ACTION IMPLEMENTATION 49.1 Suspension of the action implementation, by the beneficiaries 49.1.1 Conditions The beneficiaries may suspend implementation of the action or any part of it, if exceptional circumstances — in particular force majeure (see Article 51) — make implementation impossible or excessively difficult. 49.1.2 Procedure The coordinator must immediately formally notify to the [Commission][Agency] the suspension (see Article 52), stating: - the reasons why and - the expected date of resumption. The suspension will take effect the day this notification is received by the [Commission][Agency]. Once circumstances allow for implementation to resume, the coordinator must immediately formally notify the [Commission][Agency] and request an amendment of the Agreement to set the date on which the action will be resumed, extend the duration of the action and make other changes necessary to adapt the action to the new situation (see Article 55) — unless the Agreement or the participation of a beneficiary has been terminated (see Article 50). The suspension will be lifted with effect from the resumption date set out in the amendment. This date may be before the date on which the amendment enters into force. 49.2 Suspension of the action implementation, by the [Commission][Agency] 49.2.1 Conditions The [Commission][Agency] may suspend implementation of the action or any part of it: (d) if a beneficiary has committed or is suspected of having committed substantial errors, irregularities, fraud or serious breach of obligations in the award procedure or under this Agreement; (e) if a beneficiary has committed — in other EU or Euratom grants awarded to it under similar conditions — systemic or recurrent errors, irregularities, fraud or serious breach of obligations that have a material impact on this grant (extension of findings from other grants to this grant; see Article 22.5.2), or (f) if the action is suspected of having lost its scientific or technological relevance. 49.2.2 Procedure Before suspending implementation of the action, the [Commission][Agency] will formally notify the coordinator: - informing it of its intention to suspend the implementation and the reasons why and - inviting it to submit observations within 30 days of receiving notification. If the [Commission][Agency] does not receive observations or decides to pursue the procedure despite the observations it has received, it will formally notify confirmation of the suspension. Otherwise, it will formally notify that the procedure is not continued. The suspension will take effect five days after confirmation notification is received by the coordinator (or on a later date specified in the notification). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 690 1. Suspension of the action implementation (by the beneficiaries or the Commission/Agency) The rules on suspension of the action implementation are in principle the same as for the General MGA (see Article 49 H2020 General MGA). The lump sum MGA has, however, the following specificities: Suspension of action implementation has NO specific impact on the eligibility of costs. Costs are eligible, if they fulfil the conditions set out in Article 6 — i.e. the action tasks must have been carried out as described in Annex 1. It will be lifted if the conditions for resuming implementation of the action are met. The coordinator will be formally notified of the lifting and the Agreement will be amended to set the date on which the action will be resumed, extend the duration of the action and make other changes necessary to adapt the action to the new situation (see Article 55) — unless the Agreement has already been terminated (see Article 50). The suspension will be lifted with effect from the resumption date set out in the amendment. This date may be before the date on which the amendment enters into force. The beneficiaries may not claim damages due to suspension by the [Commission][Agency] (see Article 46). Suspension of the action implementation does not affect the [Commission’s][Agency’s] right to terminate the Agreement or participation of a beneficiary (see Article 50), reduce the grant or recover amounts unduly paid (see Articles 43 and 44). H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 691 ARTICLE 50 — TERMINATION OF THE AGREEMENT OR OF THE PARTICIPATION OF ONE OR MORE BENEFICIARIES MONO-BENEFICIARY: ARTICLE 50 — TERMINATION OF THE AGREEMENT 50.1 Termination of the Agreement, by the beneficiary 50.1.1 Conditions and procedure The beneficiary may terminate the Agreement. The beneficiary must formally notify termination to the [Commission][Agency] (see Article 52), stating: - the reasons why and - the date the termination will take effect. This date must be after the notification. If no reasons are given or if the [Commission][Agency] considers the reasons do not justify termination, the Agreement will be considered to have been ‘terminated improperly’. The termination will take effect on the day specified in the notification 50.1.2 Effects The beneficiary must submit — within 60 days from when termination takes effect — the final report (see Article 20). If the [Commission][Agency] does not receive the report within the deadline (see above), no costs will be reimbursed. The [Commission][Agency] will calculate the final grant amount (see Article 5.3) and the balance (see Article 21), on the basis of the report submitted, the eligible costs and compliance with other obligations under the Agreement. In case of improper termination, the grant will be reduced by 100% (see Article 43). After termination, the beneficiary’s obligations (in particular Section 3 of Chapter 4, Articles 36 and 37) continue to apply. 50.2 Termination of the participation of one or more beneficiaries, by the beneficiaries Not applicable 50.3 Termination of the Agreement by the [Commission][Agency] 50.3.1 Conditions The [Commission][Agency] may terminate the Agreement if: (a) not applicable (b) a change to the beneficiary's legal, financial, technical, organisational or ownership situation [(or those of its linked third parties)] is likely to substantially affect or delay the implementation of the action or calls into question the decision to award the grant; (c) not applicable H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 692 (d) implementation of the action is prevented by force majeure (see Article 51) or suspended by the beneficiary (see Article 49.1) and either: (i) resumption is impossible, or (ii) the necessary changes to the Agreement would call into question the decision awarding the grant or breach the principle of equal treatment of applicants; (e) the beneficiary is declared bankrupt, being wound up, having its affairs administered by the courts, has entered into an arrangement with creditors, has suspended business activities, or is subject to any other similar proceedings or procedures under national law; (f) the beneficiary (or a natural person who has the power to represent or take decisions on its behalf) has been found guilty of professional misconduct, proven by any means; (g) the beneficiary does not comply with the applicable national law on taxes and social security; (h) the action has lost scientific or technological relevance; (i) [OPTION for joint actions (joint call with a third country or an international organisation): the third country or international organisation action (see Article 2) has not started by the date specified in Annex 1][OPTION: not applicable]; (j) [OPTION for joint actions (joint call with a third country or an international organisation): the third country or international organisation action (see Article 2) is terminated or can no longer contribute to the action][OPTION: not applicable]; (k) the beneficiary (or a natural person who has the power to represent or take decisions on its behalf) has committed fraud, corruption, or is involved in a criminal organisation, money laundering or any other illegal activity affecting the EU’s financial interests; (l) the beneficiary (or a natural person who has the power to represent or take decisions on its behalf) has — in the award procedure or under the Agreement — committed: (i) substantial errors, irregularities, fraud or (ii) serious breach of obligations, including improper implementation of the action, submission of false information, failure to provide required information, breach of ethical principles; (m) the beneficiary has committed — in other EU or Euratom grants awarded to it under similar conditions — systemic or recurrent errors, irregularities, fraud or serious breach of obligations that have a material impact on this grant (‘extension of findings from other grants to this grant’). 50.3.2 Procedure Before terminating the Agreement, the [Commission][Agency] will formally notify the beneficiary: - informing it of its intention to terminate and the reasons why and - inviting it, within 30 days of receiving notification, to submit observations and in case of Point (l.ii) above — to inform the [Commission][Agency] of the measures to ensure compliance with the obligations under the Agreement. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 693 If the [Commission][Agency] does not receive observations or decides to pursue the procedure despite the observations it has received, it will formally notify to the beneficiary confirmation of the termination and the date it will take effect. Otherwise, it will formally notify that the procedure is not continued. The termination will take effect: - for terminations under Points (b), (c), (e), (g), (h), (j), and (l.ii) above: on the day specified in the notification of the confirmation (see above); - for terminations under Points (a), (d), (f), (i), (k), (l.i) and (m) above: on the day after the notification of the confirmation is received by the beneficiary. 50.3.3 Effects The beneficiary must — within 60 days from when termination takes effect —, submit the final report (see Article 20). If the [Commission][Agency] does not receive the report within the deadline (see above), no costs will be reimbursed The [Commission][Agency] will calculate the final grant amount (see Article 5.3) and the balance (see Article 21), on the basis of the report submitted, the eligible costs and compliance with other obligations under the Agreement. This does not affect the [Commission][Agency]’s right to reduce the grant (see Article 43) or to impose administrative and financial penalties (Article 53). The beneficiary may not claim damages due to termination by the [Commission][Agency] (see Article 46). After termination, the beneficiary’s obligations (in particular Articles 20, 22, 23, Section 3 of Chapter 4, 36, 37, 38 and 40) continue to apply. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 694 MULTI-BENEFICIARY: ARTICLE 50 — TERMINATION OF THE AGREEMENT OR OF THE PARTICIPATION OF ONE OR MORE BENEFICIARIES 50.1 Termination of the Agreement, by the beneficiaries 50.1.1 Conditions and procedure The beneficiaries may terminate the Agreement. The coordinator must formally notify termination to the [Commission][Agency] (see Article 52), stating: - the reasons why and - the date the termination will take effect. This date must be after the notification. If no reasons are given or if the [Commission][Agency] considers the reasons do not justify termination, the Agreement will be considered to have been ‘terminated improperly’. The termination will take effect on the day specified in the notification. 50.1.2 Effects The coordinator must submit — within 60 days from when termination takes effect — the final report (see Article 20). If the [Commission][Agency] does not receive the report within the deadline (see above), no costs will be reimbursed. The [Commission][Agency] will calculate the final grant amount (see Article 5.3) and the balance (see Article 21), on the basis of the report submitted, the eligible costs and compliance with other obligations under the Agreement. In case of improper termination, the grant will be reduced by 100% (see Article 43). After termination, the beneficiaries’ obligations (in particular Section 3 of Chapter 4, Articles 36 and 37) continue to apply. 50.2 Termination of the participation of one or more beneficiaries, by the beneficiaries 50.2.1 Conditions and procedure The participation of one or more beneficiaries may be terminated by the coordinator, on request of the beneficiary concerned or on behalf of the other beneficiaries. The coordinator must formally notify termination to the [Commission][Agency] (see Article 52) and inform the beneficiary concerned. If the coordinator’s participation is terminated without its agreement, the formal notification must be done by another beneficiary (acting on behalf of the other beneficiaries). The notification must include: - the reasons why; - the opinion of the beneficiary concerned (or proof that this opinion has been requested in writing); - the date the termination takes effect. This date must be after the notification, and - a request for amendment (see Article 55), with a proposal for reallocation of the tasks (see Annex 1) and, if necessary, the addition of one or more new beneficiaries (see Article 56). If termination takes effect after the period set out in Article 3, no request for amendment must be included unless the beneficiary concerned is the coordinator. In this case, the request for amendment must propose a new coordinator. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 695 - a request for amendment (see Article 55), with a proposal for reallocation of the tasks (see Annex 1) and, if necessary, the addition of one or more new beneficiaries (see Article 56). If termination takes effect after the period set out in Article 3, no request for amendment must be included unless the beneficiary concerned is the coordinator. In this case, the request for amendment must propose a new coordinator. If this information is not given or if the [Commission][Agency] considers that the reasons do not justify termination, the participation will be considered to have been terminated improperly. The termination will take effect on the day specified in the notification. 50.2.2 Effects If the request for amendment is rejected by the [Commission][Agency] (because it calls into question the decision awarding the grant or breaches the principle of equal treatment of applicants), the Agreement may be terminated according to Article 50.3.1(c). If the request for amendment is accepted by the [Commission][Agency], the Agreement is amended to introduce the necessary changes (see Article 55). Improper termination may lead to a reduction of the grant (see Article 43) or termination of the Agreement (see Article 50). After termination, the concerned beneficiary’s obligations (in particular Articles 20, 22, 23, Section 3 of Chapter 4, 36, 37, 38 and 40) continue to apply. 50.3 Termination of the Agreement or of the participation of one or more beneficiaries, by the Commission/Agency 50.3.1 Conditions The [Commission][Agency] may terminate the Agreement or the participation of one or more beneficiaries, if: (a) one or more beneficiaries do not accede to the Agreement (see Article 56); (b) a change to their legal, financial, technical, organisational or ownership situation [(or those of its linked third parties)] is likely to substantially affect or delay the implementation of the action or calls into question the decision to award the grant; (c) following termination of participation for one or more beneficiaries (see above), the necessary changes to the Agreement would call into question the decision awarding the grant or breach the principle of equal treatment of applicants (see Article 55); (d) implementation of the action is prevented by force majeure (see Article 51) or suspended by the coordinator (see Article 49.1) and either: (i) resumption is impossible, or (ii) the necessary changes to the Agreement would call into question the decision awarding the grant or breach the principle of equal treatment of applicants; (e) a beneficiary is declared bankrupt, being wound up, having its affairs administered by the courts, has entered into an arrangement with creditors, has suspended business activities, or is subject to any other similar proceedings or procedures under national law; (f) a beneficiary (or a natural person who has the power to represent or take decisions on its behalf) has been found guilty of professional misconduct, proven by any means; H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 696 (g) a beneficiary does not comply with the applicable national law on taxes and social security; (h) the action has lost scientific or technological relevance; (i) [OPTION for joint actions (joint call with a third country or an international organisation): the third country or international organisation action (see Article 2) has not started by the date specified in Annex 1][OPTION: not applicable]; (j) [OPTION for joint actions (joint call with a third country or an international organisation): the third country or international organisation action (see Article 2) is terminated or can no longer contribute to the action][OPTION: not applicable]; (k) a beneficiary (or a natural person who has the power to represent or take decisions on its behalf) has committed fraud, corruption, or is involved in a criminal organisation, money laundering or any other illegal activity affecting the EU’s financial interests; (l) a beneficiary (or a natural person who has the power to represent or take decisions on its behalf) has — in the award procedure or under the Agreement — committed: (i) substantial errors, irregularities, fraud or (ii) serious breach of obligations, including improper implementation of the action, submission of false information, failure to provide required information, breach of ethical principles; (m) a beneficiary has committed — in other EU or Euratom grants awarded to it under similar conditions — systemic or recurrent errors, irregularities, fraud or serious breach of obligations that have a material impact on this grant (‘extension of findings from other grants to this grant’). 50.3.2 Procedure Before terminating the Agreement or participation of one or more beneficiaries, the [Commission][Agency] will formally notify the coordinator: - informing it of its intention to terminate and the reasons why and - inviting it, within 30 days of receiving notification, to submit observations and in case of Point (l.ii) above — to inform the [Commission][Agency] of the measures to ensure compliance with the obligations under the Agreement. If the [Commission][Agency] does not receive observations or decides to pursue the procedure despite the observations it has received, it will formally notify to the coordinator confirmation of the termination and the date it will take effect. Otherwise, it will formally notify that the procedure is not continued. The termination will take effect: - for terminations under Points (b), (c), (e), (g), (h), (j), and (l.ii) above: on the day specified in the notification of the confirmation (see above); - for terminations under Points (a), (d), (f), (i), (k), (l.i) and (m) above: on the day after the notification of the confirmation is received by the coordinator. 50.3.3 Effects (a) for termination of the Agreement: The coordinator must — within 60 days from when termination takes effect —, submit the final report (see Article 20). If the Agency does not receive the report within the deadline (see above), no costs will be reimbursed The Agency will calculate the final grant amount (see Article 5.3) and the balance (see Article 21), on the basis of the report submitted, the eligible costs and compliance with other obligations under the Agreement. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 697 1. Termination of the GA (by the beneficiaries) The rules on termination are in principle the same as in the General MGA (see Article 50 H2020 General MGA). However, for actions under lump sum actions, improper termination by the beneficiaries will lead to a 100% reduction of the grant. 2. Termination of the participation of one or more beneficiaries (by the beneficiaries) The rules on termination are in principle the same as in the General MGA (see Article 50 H2020 General MGA). However, the lump sum multi-beneficiary MGA has the following specificities: The notification must include a reallocation of the tasks (Annex 1), but NO reallocation of the estimated budget of the beneficiary concerned. If the [Commission][Agency] does not receive the report within the deadline (see above), no costs will be reimbursed The [Commission][Agency] will calculate the final grant amount (see Article 5.3) and the balance (see Article 21), on the basis of the report submitted, the eligible costs and compliance with other obligations under the Agreement. This does not affect the [Commission][Agency]’s right to reduce the grant (see Article 43) or to impose administrative and financial penalties (Article 53). The beneficiaries may not claim damages due to termination by the [Commission][Agency] (see Article 46). After termination, the beneficiaries’ obligations (in particular Articles 20, 22, 23, Section 3 of Chapter 4, 36, 37, 38 and 40) continue to apply. (b) for termination of the participation of one or more beneficiaries: The coordinator must — within 60 days from when termination takes effect — submit a request for amendment (see Article 55), with a proposal for reallocation of the tasks (see Annex 1) and, if necessary, the addition of one or more new beneficiaries (see Article 56). If termination is notified after the period set out in Article 3, no request for amendment must be submitted unless the beneficiary concerned is the coordinator. In this case the request for amendment must propose a new coordinator. If the request for amendment is rejected by the [Commission][Agency] (because it calls into question the decision awarding the grant or breaches the principle of equal treatment of applicants), the Agreement may be terminated according to Article 50.3.1(c). If the request for amendment is accepted by the [Commission][Agency], the Agreement is amended to introduce the necessary changes (see Article 56). After termination, the concerned beneficiary’s obligations (in particular Articles 20, 22, 23, Section 3 of Chapter 4, 36, 37, 38 and 40) continue to apply. H2020 AGA — Annotated Model Grant Agreement: V2.1 – 30 October 2015 MGA Lump sum 698 Moreover, if the GA continues (i.e. it is amended), the termination of the beneficiary will NOT have any effect on the estimated budget (since there is a lump sum for the entire action, i.e. the consortium as a whole). 3. Termination of the Agreement or of the participation of one or more beneficiaries (by the Commission/Agency) The rules on termination are in principle the same as in the General MGA (see Article 50 H2020 General MGA). However, the multi-beneficiary MGA Lump sum has the following specificities: The request for amendment (which the coordinator must send 60 after termination) must include a reallocation of the tasks (Annex 1), but NO reallocation of the estimated budget of the beneficiary concerned. If the GA continues (i.e. it is amended), the termination of the beneficiary will NOT have any effect on the estimated budget (since there is a lump sum for the entire action, i.e. the consortium as a whole).