PURPOSE: to amend Regulation (EC) No 1083/2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund, in respect of certain revenue-generating projects.

LEGISLATIVE ACT: Council Regulation (EC) No 1341/2008 of 18 December 2008 amending Regulation (EC) No 1083/2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund, in respect of certain revenue-generating projects

CONTENT: this Regulation amends Article 55(5) of Regulation (EC) No 1083/2006. The amendment states that the operative provisions of the Article will apply only to operations which are co-financed by the ERDF or Cohesion Fund and the total cost of which exceeds EUR 1 000 000 . This is due to the fact that a number of difficulties have been highlighted in connection with the application of the provisions of Article 55, including a disproportionate administrative burden, especially for operations co-financed by the European Social Fund and small operations financed by the European Regional Development Fund (ERDF) or Cohesion Fund. These difficulties may have adverse consequences in terms of operation management, especially for projects in areas of Community priority such as the environment, social inclusion, research, innovation or energy, and in terms of the administrative burden. Article 55 had to be simplified.

This simplification applies to all projects receiving assistance from the Structural Funds or Cohesion Fund during the 2007-2013 programming period. Retroactive application was therefore necessary, and Regulation (EC) No 1083/2006 amended accordingly.

ENTRY INTO FORCE: 25/12/2008.

APPLICATION: from 01/08/2006 to all operations receiving assistance from the Structural Funds or Cohesion Fund during the 2007-2013 programming period.

The European Parliament adopted, by 621 votes to 25 with 14 abstentions, a legislative resolution giving its assent to the proposal for a Council Regulation (EC) amending Regulation (EC) No 1083/2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund, in respect of certain revenue-generating projects. The report had been tabled for consideration in plenary by Stavros ARNAOUTAKIS (PES, EL) on behalf of the Committee on Regional Development.

The Committee on Regional Development adopted the recommendation drafted by Stavros ARNAOUTAKIS (PES, EL) which calls on the European Parliament to give its assent to the proposal for a Council Regulation (EC) amending Regulation (EC) No 1083/2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund, in respect of certain revenue-generating projects.

PURPOSE: to amend Regulation (EC) No 1083/2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund, in respect of certain revenue-generating projects.

PROPOSED ACT: Council Regulation.

CONTENT: the new financial management rules introduced by Regulation No 1083/2006 include provisions on the financial contribution from the Funds (Title V) and in particular on revenue-generating projects (Article 55).

A number of difficulties have been highlighted in connection with the application of the provisions of Article 55, including a disproportionate administrative burden, especially for operations co-financed by the European Social Fund and small operations financed by the European Regional Development Fund (ERDF) or Cohesion Fund.

These difficulties may have adverse consequences in terms of operation management, especially for projects in areas of Community priority such as the environment, social inclusion, research, innovation or energy, and in terms of the administrative burden.

Article 55 should therefore be simplified.

According to the proposal, paragraphs 1 to 4 of Article 55 of Regulation (EC) No 1083/2006 shall apply only to operations which are co-financed by the ERDF or Cohesion Fund and the total cost of which exceeds EUR 1 million .

This Regulation shall be applicable retroactively from 1 August 2006 to all operations receiving assistance from the Structural Funds or Cohesion Fund during the 2007-2013 programming period.

PURPOSE: to amend Regulation (EC) No 1083/2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund, in respect of certain revenue-generating projects.

PROPOSED ACT: Council Regulation.

CONTENT: the new financial management rules introduced by Regulation No 1083/2006 include provisions on the financial contribution from the Funds (Title V) and in particular on revenue-generating projects (Article 55).

A number of difficulties have been highlighted in connection with the application of the provisions of Article 55, including a disproportionate administrative burden, especially for operations co-financed by the European Social Fund and small operations financed by the European Regional Development Fund (ERDF) or Cohesion Fund.

These difficulties may have adverse consequences in terms of operation management, especially for projects in areas of Community priority such as the environment, social inclusion, research, innovation or energy, and in terms of the administrative burden.

Article 55 should therefore be simplified.

According to the proposal, paragraphs 1 to 4 of Article 55 of Regulation (EC) No 1083/2006 shall apply only to operations which are co-financed by the ERDF or Cohesion Fund and the total cost of which exceeds EUR 1 million .

This Regulation shall be applicable retroactively from 1 August 2006 to all operations receiving assistance from the Structural Funds or Cohesion Fund during the 2007-2013 programming period.

PURPOSE: to amend Regulation (EC) No 1083/2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund, in respect of certain revenue-generating projects.

PROPOSED ACT: Council Regulation.

CONTENT: the new financial management rules introduced by Regulation No 1083/2006 include provisions on the financial contribution from the Funds (Title V) and in particular on revenue-generating projects (Article 55).

According to Article 55(1) of the Regulation, ‘revenue-generating project’ means any operation involving an investment in infrastructure the use of which is subject to charges borne directly by users or any operation involving the sale or rent of land or buildings or any other provision of services against payment.

The provisions of Article 55 of Regulation No 1083/2006 do not seem appropriate to projects co-financed by the European Social Fund (ESF), which essentially finances non-physical operations rather than infrastructure (which is ineligible). Few projects generate revenue, and, if they do, it is usually during the operation implementation phase only.

Furthermore, in the case of small operations co-financed by the ERDF/Cohesion Fund or operations co-financed by the ESF, the follow-up procedures to be complied with - revenue may be taken into account for up to three years after winding-up of the operational programme - would seem to be a disproportionate administrative burden compared with the amounts concerned, and an important risk factor in programme implementation.

The Commission is therefore proposing an amendment to Article 55(5) only, with the other provisions of Regulation No 1083/2006 remaining unchanged. The amendment consists in replacing the provision on proportionality in monitoring small operations (total cost below €200 000) by the non-application of the provisions of Article 55 to operations co-financed by the ESF and to operations co-financed by the ERDF or Cohesion Fund where the total cost is less than €1 000 000. It is also proposed that this should apply retroactively from 1 August 2006.

PURPOSE: to amend Regulation (EC) No 1083/2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund, in respect of certain revenue-generating projects.

PROPOSED ACT: Council Regulation.

CONTENT: the new financial management rules introduced by Regulation No 1083/2006 include provisions on the financial contribution from the Funds (Title V) and in particular on revenue-generating projects (Article 55).

According to Article 55(1) of the Regulation, ‘revenue-generating project’ means any operation involving an investment in infrastructure the use of which is subject to charges borne directly by users or any operation involving the sale or rent of land or buildings or any other provision of services against payment.

The provisions of Article 55 of Regulation No 1083/2006 do not seem appropriate to projects co-financed by the European Social Fund (ESF), which essentially finances non-physical operations rather than infrastructure (which is ineligible). Few projects generate revenue, and, if they do, it is usually during the operation implementation phase only.

Furthermore, in the case of small operations co-financed by the ERDF/Cohesion Fund or operations co-financed by the ESF, the follow-up procedures to be complied with - revenue may be taken into account for up to three years after winding-up of the operational programme - would seem to be a disproportionate administrative burden compared with the amounts concerned, and an important risk factor in programme implementation.

The Commission is therefore proposing an amendment to Article 55(5) only, with the other provisions of Regulation No 1083/2006 remaining unchanged. The amendment consists in replacing the provision on proportionality in monitoring small operations (total cost below €200 000) by the non-application of the provisions of Article 55 to operations co-financed by the ESF and to operations co-financed by the ERDF or Cohesion Fund where the total cost is less than €1 000 000. It is also proposed that this should apply retroactively from 1 August 2006.