1. 2007-2013 programme closure

2. Final Implementation Report

3. Same structure as AIR (see Art 67(2)) following a template in annex XVIII of Commission regulation Aggregated data and narrative for whole programme period Commission has 5 months to decide whether the report is Admissible, or provide comments to MS in case it is not satisfied  one-step approach for admissibility and quality check of the final implementation report Once the Commission has given its initial comments on the FIR the MS has 2 months to respond, although a reasonable request for an extension will be acceptable

4. If the MS, after being given reasonable time to improve an FIR, fails to meet the required standard the Commission will close the programme based on the last AIR and last acceptable declaration. The Commission may impose a Financial correction as well in the context of Article 99 The objective is the acceptance of the FIR within 12 months of receipt/submission

5. 5.2.3 Reporting on top up (where appropriate) under Art 77(2) 5.2.4 Reporting on major projects 5.2.5 Reporting on FEI Art 67(2)(j) 5.2.6 Reporting on results: If the outputs vary by >25% the MS must explain why the target was not met or exceeded so significantly and why corrective action was either not taken or was ineffective 5.2.7 See section 3.3 for special rules for phasing of major projects over 2 programming periods) Annex 3 should list projects 5.2.8 Non-functioning projects 5.2.9 Use of interest accrued: FIR must state amounts accrued and activities funded

6. List of Required Annexes Annex 1: Table of completed major projects Annex 3: Summary table of phased major projects Annex 4: Summary table of phased projects (non-major projects) Annex 5: Summary table of non-functioning projects Annex 6: Final Control Report & Closure Declaration Annex 7: Summary table of suspended projects

7. 2007-2013 programme closure Reporting

8. Reporting on results No target modifications to match performance Underachievement or overachievement (> 25%) should be explained – in particular in relation to core indicators.

9. Reporting on results Explanation and justification of any significant divergence against the set targets and problems encountered in their achievement should be provided MS should demonstrate that it has adopted corrective actions during the implementation No automatism in applying the financial corrections if indicators are not achieved Financial corrections for the evident non-achievement of programme objectives will have to be assessed case-by-case

10. Reporting on results Each Final report should include the final picture in relation to: - The categorisation data – a table should be provided that is consistent with the EU share of declared eligible expenditure. This will indicate how the EU resources were finally used. - The reporting of core indicator achievement values linked to the completed projects included in the final declaration.

11. Major Projects under IPA framework In accordance with Article 39 of the General Regulation, a major project is deemed an operation comprising a series of works, activities or services intended in itself to accomplish an indivisible task of a precise economic or technical nature which has clearly identified goals and whose total cost exceeds EUR 10 million. An approved major project should be considered as eligible and functioning provided the two following conditions are met: 1. the project has been completed: activities foreseen have been actually carried out as foreseen in the Commission decision on the major project; 2. the project is in use

12. Reporting on major projects The Member State should confirm in the final report that the major projects are completed and are in use and that they have been implemented in accordance with the corresponding Commission decisions. Moreover the Member States should provide a list of completed major projects with the following information: – their date of completion; – the total final investment costs of these projects, including their sources of financing; – their key output and result indicators, including, where relevant, the core indicators laid down in the Commission decision on the major project

13. Reporting on major projects The Member States should provide in the final report information of any significant problems encountered in implementing major projects and measures taken to overcome them. Moreover, the Member States should indicate any change in the indicative list of major projects provided in the programme. The Commission will assess the reasons and consequences of the eventual non-compliance of the implemented major projects with the Commission decision (financial and/or physical implications) and may apply a financial correction (on the basis of Articles 99 and 100 of the General Regulation) The list should be provided using the template in Annex I to the guidelines.

15. 2007-2013 programme closure Eligibility of expenditure

16. General rules Incurred and paid for operation before final eligibility date Fixed final date of eligibility: 31 December 2016 Exceptions to the general rules: phasing, non- functioning projects, revenue generating projects and state aid Functioning project: completed and in use

17. Specific issues – functioning operations functioning operations: to be considered as eligible, completed and in use at the time of the submission of the closure documents implementation can, in principle, continue after 31 December 2016, but expenditure is not eligible for EU cofinancing in order to complete the project and/or achieve the objectives of the operation, Member State may use national resources by the deadline of the submission of closure documents MA should make available to the Commission on request a list of all functioning operations for the full period of three years following the closure of the programme

18. Phasing– Definition of phases Two clearly identifiable stages (from a physical & financial point of view) not possible to use only financial milestone (85% of costs, or 75% of construction or materials, etc.) for defining a phase a phase should be auditable with regard to its physical object, allocated amounts and results achieved, meaning that it should demonstrate achievement of tangible targets.

19. Phasing Major Projects the project was not approved by the Commission as a major project (infrastructure or productive investment) under the programming period 2000-2006 the project has two clearly identifiable phases from a physical and financial point of view. The physical scope of each phase and its corresponding financial allocation should be duly described and the description should form part of the audit trail. The financial allocation of each phase should be established by reference to the physical elements of each phase in order to avoid that the same expenditure is declared twice to the Commission.

20. Phasing Major Projects the second phase of the project is eligible for financing from Structural Funds and/or the Cohesion Fund under the 2014-2020 period; while reducing the financial allocation to the project in the 2007- 2013 period (first phase), a request for major project amendment will maintain the original overall objective of the major project that needs to be achieved within the 2014-2020 period and make reference to the second phase of the project (including its expected time of completion).

21. Amendment of Commission decisions for major projects In order to request formally the phasing of a major project, a Member State should submit either a major project application which foresees phasing of the major project over two periods or a request for amendment of the corresponding Commission decision in accordance with the procedures applicable to the amendment of Commission decisions for major projects Member States should communicate to the Commission by 30 June 2015 a list of major projects which they propose to divide into phases.

22. Major Project amendment Submit amendment request by 30 September 2016. Update the original application and take into account revised project details/timeline  update of documents or procedures may be needed (CBA, EIA, permits). Amended decision reaffirms overall objective of the major project, the scope of each phase and the corresponding financial allocation

23. Phasing Major Projects Must have two clearly identifiable physical and financial phases, each phase functioning and ready to be used for its purpose Notice of intention to divide MP into phases must be with Commission by 30 June 2016 List of projects proposed for phasing submitted by 30 June 2016 List of projects accepted for phasing provided in the final report (Annex III)

25. Phasing Non- Major Projects Minimum total cost EUR 5 million the project was not selected by the Member State under the programming period 2000-2006 the project has two clearly identifiable phases from a physical and financial point of view. The physical scope of each phase and its corresponding financial allocation should be duly described and the description should form part of the audit trail. The financial allocation of each phase should be established by reference to the physical elements of each phase in order to avoid that the same expenditure is declared twice to the Commission. the second phase of the project is eligible under Structural Funds and/or the Cohesion Fund under the 2014-2020 period

26. Phasing Non-Major Projects No need for modification of Commission decision or notification Programme responsibility to ensure that phasing requirements (identifiable stages etc.) are met; No list needed in closure documents, but, upon Commission request, the Member States should be able to provide such a list using the template in Annex IV;

28. Non-Functioning Projects Definition: Non-completed projects or projects completed, but not in use (at the submission of closure documents). As of 31 March 2018 all projects should be complete and in use Can be, exceptionally and on a case-by-case basis, included in final statement of expenditure IF: --Project value > EUR 5 million of total costs; --Total value of non-functioning projects < 10 of total OP allocation --Member State committed to complete projects by 31 March 2020 No extension of the final date of eligibility

29. Non-Functioning Projects --Separately reported in final implementation report List of non- functioning projects according to Annex V -- MS commits to report to COM every 6 months. --Information on completion within two years after final submitting closure documents. Functioning: Information on completion and operational aspects provided to the Commission. No further payment as already paid at closure.

31. Non-Functioning Projects Non-Functioning: Recovery of funds allocated to the whole project.  reimbursement of the Union co-financing allocation in case of non-completion of such projects by 31 March 2020. Incomplete projects will become 100% ineligible If the Member State does not agree with the recovery, the Commission will proceed with a financial correction according to Article 99 of the General Regulation.

32. Revenue generating projects: Definition 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 Provided that the projects generate net revenue ( revenues – operating costs (+ residual value))

33. Revenue generating projects: Estimation of revenue in advance -Article 55 (2) Financing needs based on estimates Deduction required at the latest of closure New sources of revenue Changes in the tariff policy No compulsory deductions required to take into account the variation of revenues which sources have been taken into account ex-ante Unless systematic ex-ante underestimation of revenues

34. Revenue generating projects: Estimation of revenue not possible in advance -Article 55 (3) Estimation impossible in advance due to: Lack of data (for tariff & demand) Unforeseeable demand (new demand might be generated by supply) Deduction required at closure: the net revenues generated within 5 years from the completion of an operation or at closure, whichever comes first shall be deducted from the expenditure declared to EC

35. Revenue generating projects: Monitoring System should be in place for monitoring of revenues Objective: Prevent over-financing (by correct application of funding gap methodology, etc.) Contribute to effective allocation of resources Early detection of possibility to reallocate funds prevents losses at closure

36. Revenue generating projects: Exceptions Provisions on revenue-generating projects do not apply to: projects subject to State aid rules within the meaning of Article 87 of the Treaty (following Leipzig-Halle judgment of the Court of Justice of EU, more infrastructure projects fall within the ambit of State aid) operations covered by financial engineering instruments under Article 44 of Council Regulation (EC) No 1083/2006 operations with total cost below 1 Meuro

37. Revenue generating projects Re-examination and adjustment of the contribution these projects are entitle to Maximum eligible expenditure is the funding gap Funding gap = current value of the investment cost less the current value of the net revenue

38. Revenue generating projects Additional new deductions must be made before submission of closure documents: (a) certain new sources of revenue have not been taken into account in the calculation of the funding gap and/or new sources of revenue appeared after the calculation of the funding gap; (b) there are changes in the tariff policy which impact on the funding gap calculation; (c) net revenues were generated for projects for which it was objectively not possible to estimate in advance the revenue generated by the investment and therefore no funding gap had been calculated initially.

39. Revenue generating projects The managing authority should re-examine revenue generation and calculate the contribution these projects are entitled to. Eventually existing net revenue should be deducted by the certifying authority from the expenditure declared to the Commission, at the latest by 31 March 2018 in accordance with Article 89(1) of the General Regulation.

40. Eligibility of expenditure for State aid The beneficiary must have executed the payment for which the aid has been granted before the eligibility end date, i.e. 31 December 2016 In addition to the payment being made by the beneficiaries, the public contribution to the beneficiary must be paid before the submission of the closure documents, i.e. 31.03.2018 Advances paid to the beneficiaries should be covered by expenditure paid by beneficiaries at the latest on 31 December 2016

41. What about Illegal aid?  Illegal aid= not notified (formal error);  Aid incompatible with the internal market = not compliant with the legal provisions in force (e.g. ineligible costs/expenditure, lack of the incentive effect of the aid, ineligible operations and/or beneficiaries). Financial corrections proposed at the level of the operations financed (in some cases 100% of the total expenditure certified for the affected operation)

42. Technical assistance for closure TA for management and implementation of 2007-2013 the primary purpose of the technical assistance of the current period is for the management and the implementation of the 2007-2013 programmes. Possible flexibility: Article 46 paragraph 1 of the General Regulation - financing of preparatory activities of the 2014-2020 period

43. Technical assistance for closure these preparatory activities should be materially eligible under the 2007-2013 Union and national eligibility rules and should also fulfil the selection criteria of the programme concerned there should be a clear demonstrable link between the proposed activities and the preparations within the Member State for the 2014-2020 period

44. Specific issues – suspended operations suspended operations due to legal proceedings or an administrative appeal having suspensory effect Decided before 31 March 2018, if the project suspended should be: −Withdrawn from the programme and/or replaced by another operation before the deadline −Retained in the programme

45. Operations suspended due to legal or administrative proceedings If the project is retained: −the project should not be declared, and the amount to be paid constitute an outstanding commitment. −Keep Commission informed on outcome of procedures −List of retained projects must be communicated to the Commission (template in annex 7) No extension of the final date of eligibility

47. Suspended operation: outcome Decision in favour of the beneficiary: New payment or confirmation of previous payment Decision in favour of the Managing Authority: No payment and possible recovery of previous payment with reimbursement to the Commission of the EU-share In case amount previously paid irrecoverable: Commission may bear the loss of the EU-share (conditions apply)

48. Force majeure Exception for operations suspended due to force majeure = principle of EU law. Concept defined by the Court of Justice: non-performance was due to circumstances (cumulative conditions) which: a) were beyond the control of the person/body claiming force majeure, b) were abnormal and unforeseeable, and c) could not have been avoided despite the exercise of all due care. Allows the declaration of expenditure incurred and paid after 31 December 2016 and review of closure documents after the deadline for submission

49. DECOMMITMENTS - Automatic decommitment The entire amounts concerning operations not declared at closure will be decommitted, except for the amounts that the certifying authority has not been able to declare because of operations suspended due to legal proceedings or an administrative appeal having suspensory effect (Article 95 of the General Regulation) or for reasons of force majeure26 (Article 96(c) of the General Regulation). The Member State should indicate in the final report on implementation and in the closure declaration the amount relating to these two types of situations, which could not be declared at the time of submission of the closure documents.

50. How to avoid decommitment? Make strategic decision on who should use recycled funds; Apply recycling of unused funds: - Early decision on recycling; - Additional calls for projects to use unused funds; - Waiting (reserve) list of projects; - More money for good/strategic projects;

51. 10% Flexibility and Overbooking Declaration of more eligible expenditure than what is needed for the Commission to pay all the Funds committed for the OP Advantage: promote the full absorption of funds and creates financial buffer Warning: expenditure in overbooking must be for operations legal and regular checks and controls from MA, CA and AA required National funds shall cover the part of the expenditure overbooked which will not be reimbursed by the Commission

53. Use of Flexibility and Overbooking Specific situations: Need to compensate irregular expenditure by regular expenditure between two different priority axes after submission of closure documents 10% under-declaration of expenditure in a large priority replaced by 50% over-declaration of expenditure in a small priority Due to devaluation of the national currencies the declared expenditures at closure may fail the a full absorption of the amounts declared in the Commission decision of the programme in €

54. Irregularities, pending recoveries, irrecoverable amounts The certifying authority is obliged to ensure that only correct, regular and eligible expenditure is declared to the Commission In case irregularities are found before the submission of closure documents they need to be corrected in line with Article 98 of the General Regulation and the closure documents should reflect on that In case the Member State considers such amounts as recoverable, in line with Article 20(c) of the Implementing Regulation, they should be reported in the annual statement under Annex XI(2) of the Implementing Regulation (pending recoveries).

55. Irregularities, pending recoveries, irrecoverable amounts Pending recoveries should be included in the final payment application but will not be paid by the Commission. They will constitute an open commitment. The Member State shall inform the Commission on the outcome of the pending recovery procedures. In case of suspected (but not yet proven) fraud at the time of submission of closure documents, it is up to the Audit authority to make an assessment of the case and for MS authorities to decide whether to keep or withdraw that given project.

56. Irrecoverable amounts "COCOF Guidance note to Certifying Authorities on reporting on withdrawn amounts, recovered amounts, amounts to be recovered and amounts considered irrecoverable, applicable to programming period 2007-2013 and the remainder of the 2000-2006 programming period"

57. Irrecoverable amounts Annual statement on irrecoverable amounts (to be provided by Member States by 31 March each year). New provision added in 2009 to Article 20 of Regulation (EC) No 1828/2006 which specifies that "if, within one year from the date of submission of the statement, the Commission does not request information..., does not inform in writing the Member State about its intention to open an enquiry in respect of that amount or does not request the Member State to continue the recovery procedure, the Community share shall be borne by the general budget of the European Union."

58. Irrecoverable amounts For the amounts declared under Annex XI(3) as "irrecoverable amounts", where the Member State requests the Union's share to be borne by the general budget of the European Union, the Commission will carry out an appropriate examination of each case. In this respect it will either : (a) inform the Member State in writing about its intention to open an enquiry in respect of that amount or (b) request that the Member State continue the recovery procedure or (c) accepts that the Union's share is borne by the general budget of the European Union.

59. Irrecoverable amounts The Commission only requires the basic information on each case and exercises a presumption that the Member State has been diligent in pursuing recovery = no longer any requirement to provide the Commission with a special report on each case of irrecoverable amount. The template reporting table shows the obligatory data which Member States must provide on amounts considered irrecoverable. The Commission may decide to contact the Member State (within one year) in order to investigate in full the due diligence of the Member state.

60. Avoiding penalties for breaches of the Closure Guidance The Guidance is full of threatened penalties for: Incomplete closure packs Incorrect information in packs Late submission of packs These include: Settlement capped at value of last acceptable declaration Financial Corrections (assumed to be 2-5% of declaration value)

61. Responsibilities Post Closure Draft any amendments to Final Programme Report agreed with EC within 12 months of submission deadline Answer queries from EC on Closure documents Manage “non-functioning projects“ and report on progress to EC Manage MS input into Contradictory process on unresolved Irregularities Consider Settlement Offer from Commission and respond Monitor projects with outputs deliverable beyond Financial Closure of projects Retain records for 3 years after formal Closure

62. What really happens after closure Retain records for 3 years after formal Closure Trimestral reports to OLAF on Irregularities Do not let the TEAM go on 1 April 2017- will be required for at least 1 year Plan for Closure 2014-2020 NOW

63. Thank you!