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Subsidy Contract and Partnership Agreement by
Dr. Hans Christian Kusche, Investitionsbank
Schleswig-Holstein, Kiel, Germany
Belarus Denmark Estonia Finland Germany Latvia Lit
huania Norway Poland Russia Sweden
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• Part I Subsidy Contract - Table of contents
• Preconditions for contracting contracting
  procedure
• The Subsidy Contract within the programme
  management structure
• Parties to the contract
• Underlying rules and regulations
• Award of an earmarked subsidy based on SC
  decision
• Eligibility of costs
• Request for payments disbursement of the
  subsidy
• Representation of project partners liability
• Additional obligations of the LP
• Publicity
• Right of termination repayment of funds
• Audit rights
• Correspondence with the Managing/Paying Authority

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• Preconditions for contracting
• Project is selected by the Steering Committee
  (SC) for funding
• All queries by the Managing Authority/Joint
  Secretariat are answered by the Lead Partner
  (Note The Managing Authority is responsible
  for legal and technical control before
  concluding the Subsidy Contract)
• Conditions set by the SC are fulfilled
  completely
• Where necessary Final approval decision by the
  SC (see Rule 5.6. of the SCs Rules of
  Procedure)
• Documentation completed (signed paper copies of
  all relevant documents received by the Joint
  Secretariat)
• See also Chapter 8.7. of the Programme Manual

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• Contracting procedure
• Model Subsidy Contract as approved by the SC
  will be generated by the Project Database
• Responsible staff members of Investitionsbank
  Schleswig- Holstein (IB) will sign the contract
  (Note Acc. to the Agreements between the IB
  and Estonia, Latvia, respectively Lithuania,
  the IB may not deviate from the rulings of the
  SC when concluding the Subsidy Contract)
• Contract will be sent in triplicate by post to
  the Lead Partner for countersignature
• LP keeps one countersigned original and returns
  two countersigned originals by post to the JS
  Riga office within 4 weeks

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Baltic Sea Region INTEREG III B Neighbourhood
Programme PC
EU MEMBER STATES
NON MEMBER STATES BEL, RUS
Denmark Estonia Finland Germany Latvia
Lithuania Poland Sweden
EU COMMISSION
NORWAY
Memorandum of Understanding
SC IIIA RoP
SC IIIA RoP
STEERING
MONITORING
Agreements
COMMITTEE
COMMITTEE III B
Agreement
Rules of Procedure
Rules of Procedure
BALTIC INSTITUTE
INVESTITIONSBANK
STATE OF
Agree- ment
OF SWEDEN
SCHLESWIG-HOLSTEIN
SCHLESWIG-HOLSTEIN
Agreement
MANAGING
PAYING
Agreement
DEVELOPMENT AGENCY, LATVIA
AUTHORITY
AUTHORITY
JOINT SECRETARIAT
ROSTOCK

KARLSKRONA RIGA
Rules of Procedure
Subsidy Contract
LEAD PARTNER
Partnership Contract
PROJECT PARTNERS
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• The parties to the contract (1)
• Investitionsbank Schleswig-Holstein (IB)
• Designated by the Member States to act as
  Managing Authority, Paying Authority and host of
  the Joint Secretariat of the entire Baltic Sea
  Region INTERREG III B Neighbourhood Programme
  (incl. IIIA priorities)
• Seated in Kiel, Germany branch offices in
  Schleswig-Holstein and in Rostock (INTERREG
  Secretariats)
• Central institution for economic promotion in the
  German Bundesland Schleswig-Holstein
• 394 employees total assets 2003 8,2 billion
  EUR
• For more information see flyer and IBs website
  www.ib-sh.de

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• The parties to the contract (2)
• Lead Partner (LP)
• INTERREG Guidelines, point 31 LP is the partner
  in charge of the operation which will undertake
  financial management and coordinate the various
  partners in the operation. The LP bears financial
  and legal responsibility to the Managing
  Authority.
• See also chapters 6.4.1., 6.4.2. and 9.1. of the
  Programme Manual

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• Underlying rules and regulations (Preamble)
• EU Structural Funds Regulations i.a. defining
  the responsibilities of the Managing and Paying
  Authority, ruling the eligibility of project
  expenditures
• INTERREG Guidelines
• Programme Document (CIP) and Programme
  Complement
• Memorandum of Understanding between the EU Member
  States participating in the BSR INTERREG III B
  Neighbourhood Programme
• Agreement between the Investitionsbank
  Schleswig-Holstein and the EU Member States
  participating in the programme

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• Award of an earmarked subsidy based on SC
  decision ( 1)
• Managing Authority awards a maximum amount of
  ERDF funding to the LP (hereof a fixed amount to
  reimburse preparation costs)
• The award is based on the SC approval decision
• The subsidy is earmarked (see 2 No 1
  exclusively for the project as approved by the
  SC)
• Approved INTERREG IIIA project budget is quoted
  for the sake of completeness only the same
  applies to the cofinancing of partners in the EU
  Member States
• Disbursement of the subsidy is subject to the
  condition that European Commission makes ERDF
  funds available to the extent fixed in the
  contract.

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• Eligibility of costs ( 2)
• Only costs which are eligible acc. to the Annex
  to Commission Regulation (EC) No 448/2004 and are
  listed in the approved application will be
  subsidised
• The LP must quote the starting date of the
  project in its first progress report (see 3).
  From that day costs are eligible until the end of
  the project period.
• Eligibility period for preparation costs 1
  January 2004 until the day before the approval of
  the Steering Committee
• Budget reallocation is possible within the limits
  defined in 2 No. 3.

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• Request for payments ( 3)
• Funding granted as maximum (see 1) will only be
  transferred to the LP (in Euro!) if there is
  proof that the project progresses
• LP must present progress reports
• Progress reports consist of an activity report
  and an audited financial report
• Reporting forms will be provided. These forms
  must be used.
• Contract explicitly states the reporting periods
  date by when the report on preparation costs
  must be submitted
• Contract states the amounts which must be
  requested by the LP within a reporting period.

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• Presentation of project partners, liability ( 4)
• INTERREG Guidelines, point 31 The partner in
  charge ( LP) will establish with these partners
  ( Project Partners), possibly in the form of an
  agreement, the division of the mutual
  responsibilities.
• LP must be entitled to represent the project
  partners IB does not demand submission of a
  partnership/cooperation agreement between the
  partners, but recommends such agreement.
• LP ensures that Project Partners have a legal
  status as defined in the programme complement.
• Additional clauses in 4 to implement point 31
  of the INTERREG Guidelines (LP bears the
  financial and legal responsibility to the
  Managing Authority).

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• Additional obligations of the Lead Partner ( 5)
• 1 4 already contain various obligations of
  the LP, e.g. to regularly present progress
  reports. 5 contains further obligations which
  are equally important.
• LP is obliged to implement the project acc. to
  the approved application (see recommendations in
  chapter 9.2. of the Programme Manual to cope with
  this obligation)
• Reporting commitment ( 5 No 2)
• Obligation to comply with the body of rules and
  regulations which are forming the basis of the
  contract (in particular the ones mentioned in the
  preamble)

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• Publicity ( 6)
• Any notice or publication by the project must
  specify that the project has received a subsidy
  from the Baltic Sea Region INTERREG III B
  Neighbourhood Programme (INTERREG IIIA Priority
  North or South) it must also specify that it
  reflects the authors views only (and not the
  view of the IB).
• In all occasions the Community emblem or the
  European flag is being used, the logo of the CIP
  must also be used.
• Commission Regulation (EC) No 1159/2000 must be
  observed.
• IB is authorised to publish information on the
  project (see 6 No 3).

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• Right of termination repayment of funds ( 7)
• Managing Authority is entitled, in whole or in
  part, to terminate the subsidy contract and to
  demand repayment of funds, e.g. if the LP has
  failed to submit required reports, or the subsidy
  has been misapplied for purposes other than those
  agreed upon (further termination reasons see 7
  No 1)
• In case of termination, IB will discontinue
  payments or send a repayment claim to the LP
  defining the details of the recovery.

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• Audit rights ( 8)
• Acc. to the Agreement between the IB and the
  Member States, the IB shall ensure that the
  subsidy contract grants all inspection rights to
  the auditing bodies.
• Proper use of funds by the LP can be audited by
  EU auditing bodies, national auditing bodies and
  the IB
• LP must produce all documents required for the
  audit, provide neccessary information and give
  access to business premises
• LP is obliged to retain all files, documents and
  data about the project for a minimum period of 3
  years after final payment by the EU Commission to
  the Paying Authority (gt at least until end of
  2012).

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• Correspondence with the Managing/Paying Authority
  
• ( 9)
• In the English language
• Main contact point is the Joint Secretariat Riga
  office
• IB may demand direct correspondence with its head
  office in Kiel, Germany, or the Joint Secretariat
  Rostock office, Germany.

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• Part II Partnership Agreement - Table of
  contents
• Legal background
• Purpose of a Partnership Agreement
• Model Partnership Agreement to assist the LP

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• Legal background
• INTERREG Guidelines, point 31 The partner in
  charge ( LP) will establish with these partners
  ( Project Partners), possibly in the form of an
  agreement, the division of the mutual
  responsibilities.
• Subsidy Contract, 4 LP shall strive towards
  establishing with the project partners the
  division of the mutual responsibilities in the
  form of agreements.
• Programme Manual, Chapter 9.5 it is strongly
  recommended that a Co-operation Agreement is
  concluded between the Lead Partner and the
  partners involved in the project.

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• Purpose of a Partnership Agreement
• To secure the quality of the implementation of
  the project
• To secure the satisfactory achievement of the
  project goals
• To determine responsibilities of the project
  partners explicitly
• To pass on LPs obligations (deriving from the
  subsidy contract) to the project partners
• Legal instrument to enable the LP to fulfil its
  duties towards the bodies implementing the
  programme, in particular the Managing Authority
  and the Joint Secretariat

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• Model Partnership Agreement to assist the LP
• Document developed by the IB and the Joint
  Secretariat no comments received from the
  Steering Committees
• Serves as an example only.
• Tries to serve the general purpose of a
  Partnership Agreement (see above)
• Must be negotiated between the partners and
  tailored to the partnerships individual needs.
• No guarantee by the IB and no liability for
  completeness, correctness, up-to-dateness and
  full compatibility with EU and national law

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Thank you for your attention!