52006PC0042

[pic] | COMMISSION OF THE EUROPEAN COMMUNITIES |

Brussels, 7.2.2006

COM(2006) 42 final

2006/0014 (CNS)

Proposal for a

COUNCIL REGULATION (Euratom)

laying down the rules for the participation of undertakings, research centres and universities in actions under the Seventh Framework Programme of the European Atomic Energy Community and for the dissemination of research results (2007-2011)

(presented by the Commission)

EXPLANATORY MEMORANDUM

1. CONTEXT OF THE PROPOSAL

The Commission’s proposal for the Seventh Framework Programme (FP7), adopted on 6 April 2005, was accompanied by a Commission Staff working document “Simplification in the 7th Framework Programme” setting out 10 main measures to be implemented, and highlighting the importance of simplification as a “critical success factor”.

The Commission’s proposal for the Rules for Participation for the Seventh Framework Programme provides the vehicle for implementing many aspects of that simplification and to build upon principles established in FP6.

2. LEGAL BASIS

This proposal for a Council Regulation is based on Article 7 and 10 of the European Atomic Energy Community Treaty. These rules of participation define the rights and obligations of legal entities wishing to take part in the framework programme and establish the principles for the use and dissemination of their work resulting from that participation. The Seventh Framework Programme is implemented in accordance with the provisions established by the Financial Regulation and its implementing rules, and the state aid rules, in particular the rules on state aid for research and development.

3. PRIOR CONSULTATION

Stakeholders, Member States and Associated states have been consulted on the possible changes to the FP7 Rules for Participation in seminars and via a consultation website. Further the Sounding Board of smaller actors has been consulted on the proposals in order to ensure that the changes will not create disadvantages for such participants.

4. CONTENT

The current proposal contains four chapters: introductory provisions (subject matter, definitions and confidentiality), participation (minimum conditions to participate, procedural aspects, including minimum numbers of participants, their place of establishment, proposal submission and evaluation, implementation and grant agreements, monitoring of projects and programmes, Community financial contribution: eligibility for funding and forms of grants, reimbursement rates, payment, distribution, recovery and guarantees), the rules for dissemination and use and access rights (ownership, protection, publication, dissemination and use, and access rights to background and foreground) and the specific rules for participation in activities under the thematic area “fusion energy research” .

The minimum number of participants and conditions of place of establishment of the participants is established according to the type of action. Legal entities established in Associated countries may participate on the same basis as those established in Member States.

The Rules identify the procedures for issuing calls for proposals and the exceptions to calls for proposals, for submission, evaluation, selection and award of procedures. In addition, they establish the procedures for the appointment of external experts. Further detailed internal rules governing the procedures for submission, evaluation, selection and award of proposals are to be established by the Commission and include provisions relating to the appointment of independent experts. Those rules will include special provisions for two-stage submission procedures (which is to be used to a greater extent where applicable, for example where high over-subscription is expected, for very large projects and in order to limit costs of preparing proposals that may never be funded, etc.) and for two-step evaluation (with single submission). The evaluation process developed over previous framework programmes and reflected in these internal rules will continue without substantial changes. Greater use will be made of remote evaluation where possible and continued improvements are being made to briefings of evaluators. The use of hearings will be rationalised. The evaluation criteria are now in the Specific Programmes rather than in the Rules and can be developed further in the work programmes (and calls for proposals).

Although not specified in the Rules it is proposed that full electronic submission will be the rule in FP7, as it has been well tested and used in FP6. Also the use of pre-filled forms/pre-registration using data from a central source and changes to the content and format of proposals should permit successful proposals to begin earlier. A single registration system comprising a common database for all Commission services should help significantly.

In order to ensure consistent assessment of the financial viability of the participants and related financial procedures, the Commission will adopt and publish internal rules for their application.

A model grant agreement will be established by the Commission that will establish the rights and obligations of participants vis-à-vis the Community and each other. The autonomy and flexibility of the consortium, in particular with respect to changes in its composition that were established in FP6 will be continued. The grant agreement will come into force upon signature by the coordinator and Commission authorising officer, as was the case in FP6. All participants must accede to the grant agreement in order to benefit from their rights and obligations under the project.

Participants will be required to conclude consortium agreements, except where exempted by the call for proposals, as they were in FP6. However, many of the new provisions relating to intellectual property should make these easier to establish and to adapt as necessary.

The Commission will monitor all indirect actions financed by the Community as well as the Seventh Framework Programme and its Specific Programmes, as and when necessary with the assistance of external experts.

The participants that are eligible for Community funding are identified in the subsection on Community financial contribution that also covers forms of grants, reimbursement rates, payment, distribution, recovery and guarantees.

Three forms of grants are proposed for the Community financial contribution: reimbursement of eligible costs, lump sums, and flat-rate financing (the latter can be based on scale of unit costs but also includes flat rates for indirect costs). These may be used to cover the entire Community financial contribution for a funding scheme or in combination. For most funding schemes, reimbursement of eligible costs will be the preferred method, particularly at the beginning of FP7. The use of lump sum and flat rate financing will be introduced gradually and if successful will be used more extensively.

The definition of eligible costs has been simplified and the three cost reporting models used in previous Framework Programmes are abandoned. This means that participants can charge all their direct and indirect costs and have the option of a flat rate for indirect costs. Costs will be determined according to the usual accounting and management principles of the participants to achieve the project objectives based on principles of economy, efficiency and effectiveness.

The Community financial contribution will cover a maximum of 50% of eligible costs minus receipts both for research and for demonstration activities. For SMEs, public bodies, secondary and higher education establishments and non-profit research organisations, there will be a top up of a maximum of 25% for research activities. All other activities, including those relating to coordination and support actions, and actions for the training and career development of researchers, would be reimbursed at up to 100% for all entities.

The maxima indicated above are applied to all eligible costs of such entities even where part of the reimbursement of costs is based on lump sums or flat rates. The maxima also apply to such entities participating in projects where flat rate financing and, where appropriate, when lump sum financing is used for the whole project.

For Networks of Excellence, a special lump sum is proposed. The amount of the lump sum is established by the Rules as a fixed amount per researcher and per year. Periodic payments of portions of the lump sum would be paid according to the attainment of indicators showing progressive implementation of the Joint Programme of Activities (JPA).

Public bodies, non-profit research organisations, and higher and secondary education establishments would be permitted to provide an audit certificate established by a competent public officer. The number of audit certificates per grant agreement and participant would be reduced and reports and reporting periods are to be rationalised.

As in FP6, participants in a consortium will have the responsibility to fully carry out the tasks entrusted to them even if one of the participants fails to comply with assigned tasks. However, the principle of financial collective responsibility established in FP6 for most actions is not continued in order to remove barriers of participation, in particular for SMEs. This should also accelerate procedures and be more cost-effective. Depending on an assessment of the risks inherent in European Research funding to the Community budget, a mechanism may be introduced to cover the financial risk of a participant’s failure to reimburse any amount due to the Community. This mechanism would be financed by a small contribution from undertakings and other participants that are not public bodies, secondary and higher education establishments, or whose participation is not guaranteed by their Member State or Associated country. Participants in actions to support training and career development of researchers, will not contribute to the mechanism. The contribution will be effected by retaining the amounts due. In compliance with Article 18(2) of the Financial Regulation, retained amounts no longer needed to cover the financial risks will be reassigned to research actions under the relevant research framework programme. Therefore, bank guarantees will only be requested in the rare case in which pre-financing represents over 80% of the grant, which is the sole case for which the Financial Regulation imposes the provision of a guarantee. Also, the Commission will take any actions necessary to ensure that specific risks pertaining to a particular participant are reduced.

Provisions with respect to the dissemination and use and access rights (ownership, protection, publication, dissemination and use, and access rights to background and foreground) have been introduced. The rules specify the definitions of and rules applicable for background, foreground and access rights, taking into account the specific provisions laid down in the Treaty. In particular, Article 45 of the rules confer on the Commission the right to disseminate foreground where participants fail to do so. The provisions on intellectual property for the area “Fusion Energy Research” are set out in the instruments specific hereto.

Other measures that are not addressed in the Rules

Helpdesks

Uniform interpretation, particularly relating to legal and financial provisions of projects is to be ensured across all of the Commission services concerned. To a certain extent this can be achieved via the Commission rules that are to be established in accordance with the provisions of the draft Rules for Participation. However, helpdesks and “clearing houses” should ensure that the messages given out by the Commission are consistent and uniform. The assistance of an IPR helpdesk will be continued.

Communication

Further efforts will be made to ensure that information is as clear and accessible as possible. The number and size of documents is to be reduced and consolidated. Duplication of information and variations in the presentation of the same information in different documents will be avoided.

2006/0014 (CNS)

Proposal for a

COUNCIL REGULATION (Euratom)

laying down the rules for the participation of undertakings, research centres and universities in actions under the Seventh Framework Programme of the European Atomic Energy Community and for the dissemination of research results (2007-2011) (Text with EEA relevance)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Atomic Energy Community, and in particular Article 7 and 10,

Having regard to the proposal from the Commission[1],

Having regard to the Opinion of the European Parliament[2],

Having regard to the Opinion of the European Economic and Social Committee[3],

Having regard to the Opinion of the Court of Auditors[4],

Whereas:

(1) The Seventh Framework Programme of the European Atomic Energy Community was adopted by Decision No […/…/Euratom] of the Council of […] concerning the Seventh Framework Programme of the European Atomic Energy Community for nuclear research and training activities (2007-2011)[5]. It is the responsibility of the Commission to ensure the implementation of the framework programme and its specific programmes, including the related financial aspects.

(2) The Seventh Framework Programme is implemented in accordance with Regulation (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities[6], hereinafter “the Financial Regulation”, and Regulation (EC, Euratom) No 2342/2002 laying down detailed rules for the implementation of the Financial Regulation[7], hereinafter “the Implementing Rules”.

(3) The Seventh Framework Programme is also implemented in accordance with the state aid rules, in particular the rules on state aid for research and development[8].

(4) The rules for the participation of undertakings, research centres and universities should provide a coherent and transparent framework to ensure efficient implementation and ease of access for all participants in the Seventh Framework Programme.

(5) The S eventh Framework Programme should promote participation from the outermost regions of the Community, as well as from a wide range of undertakings, research centres and universities.

(6) The definition of micro, small and medium-sized enterprises (SMEs) provided in Commission Recommendation 2003/361/EC[9] should apply, for reasons of coherence and transparency.

(7) It is therefore appropriate to permit not only the participation of legal persons, provided that they are entitled to exercise rights and assume obligations, but natural persons. The participation of natural persons will ensure that the creation and development of scientific excellence and ability are not limited to Community funding of projects involving only legal persons, ensuring also the participation of SMEs that are not legal persons.

(8) It is necessary to establish the minimum conditions for participation, both as a general rule and with regard to the specificities of indirect actions under the Seventh Framework Programme. In particular, rules should be laid down regarding the number of participants and their place of establishment.

(9) It is appropriate that any legal entity should be free to participate once the minimum conditions have been satisfied. Participation over and above the minimum should ensure the efficient performance of the indirect action concerned.

(10) International organisations dedicated to developing cooperation in the field of nuclear research and training in Europe and largely made up of Member States or Associated countries should be encouraged to participate in the Seventh Framework Programme.

(11) The participation of legal entities established in third countries and the participation of international organisations should also be envisaged, as enshrined in Article 101 of the Treaty. However, it is appropriate to require that such participation be justified in terms of the enhanced contribution thereby made to the objectives sought under the Seventh Framework Programme.

(12) In line with the objectives mentioned above, it is necessary to establish the terms and conditions for providing Community funding to participants in indirect actions.

(13) It is necessary for the Commission to establish further rules and procedures, in addition to those provided for in the Financial Regulation and its Implementing Rules, to govern the submission, evaluation, selection and award of proposals. In particular the rules governing the use of independent experts should be established.

(14) It is appropriate for the Commission to establish further rules and procedures, in addition to those provided for in the Financial Regulation and its Implementing Rules, to govern the assessment of the legal and financial viability of participants in indirect actions under the Seventh Framework Programme.

(15) In this context, the Financial Regulation and the Implementing Rules, govern inter alia the protection of the Community’s financial interests, the fight against fraud and irregularity, the procedures for the recovery of sums owed to the Commission, exclusion from contract and grant procedures and related penalties, and audits, checks, and inspections by the Commission and the Court of Auditors, pursuant to Article 160c of the Treaty.

(16) The agreements concluded for each action should provide for supervision and financial control by the Commission, or any representative authorised by the Commission, as well as audits by the Court of Auditors and on-the-spot checks carried out by the European Anti-Fraud Office (OLAF), in accordance with the procedures laid down in Council Regulation N° 2185/96 .

(17) The Commission should monitor both the indirect actions carried out under the Seventh Framework Programme and the Seventh Framework Programme and its Specific Programmes.

(18) The rules governing the dissemination of research results should ensure that, where appropriate, the participants protect the intellectual property generated in actions, and use and disseminate those results.

(19) While respecting the rights of the owners of intellectual property, those rules should be designed to ensure that participants have access to information they bring to the project and to knowledge arising from research work carried out in the project to the extent necessary to conduct the research work or to use the resulting knowledge.

(20) The obligation established in the sixth Framework Programme for certain participants to take financial responsibility for their partners in the same consortium will be waived. Depending on the level of risk associated with non-recovery of sums, part of the Community financial contribution may be retained to cover amounts due and not reimbursed by defaulting partners. The participants that would have been obliged to cover the financial responsibility for other participants would contribute to risk avoidance, which the Commission shall retain at the time it makes payments.

(21) Community contributions to a joint undertaking set up pursuant to Articles 45 to 51 of the Treaty do not fall within the scope of this Regulation.

(22) This Regulation respects the fundamental rights and observes the principles recognised in particular by the Charter of Fundamental Rights of the European Union.

(23) The Community may provide financial support, as established in the Financial Regulation, inter alia by means of:

(a) public procurements, in the form of a price for goods or services established by contract and selected on the basis of calls for tender;

(b) grants;

(c) subscriptions to an organisation in the form of a membership fee;

(d) honoraria for independent experts identified in Article 16 of this Regulation.

HAS ADOPTED THIS REGULATION:

Chapter I Introductory provisions

Article 1

Subject matter

This Regulation lays down the rules for the participation of undertakings, research centres and universities and other legal entities in actions undertaken by one or more participants by means of funding schemes identified in part (a) of Annex II to Decision […/…] establishing the Seventh Framework Programme, hereinafter “indirect actions”.

It also lays down rules, in accordance with those laid down in Regulation (EC/Euratom) No 1605/2002, hereinafter “the Financial Regulation”, and Regulation (EC/Euratom) No 2342/2002, hereinafter “the Implementing Rules”, concerning the Community financial contribution to participants in indirect actions under the Seventh Framework Programme.

As regards the results of research carried out under the Seventh Framework Programme, this Regulation lays down rules for the disclosure of foreground by any appropriate means other than that resulting from the formalities for protecting it, and including the publication of foreground in any medium, hereinafter “dissemination”.

In addition, it lays down rules for the direct or indirect utilisation of foreground in further research activities other than those covered by the indirect action concerned, or for developing, creating and marketing a product or process, or for creating and providing a service, hereinafter “use”.

In respect of both foreground and background, this Regulation lays down rules concerning licences and user rights thereto, hereinafter “access rights”.

Article 2

Definitions

For the purposes of this Regulation the following definitions shall apply in addition to those set out in the Financial Regulation and the Implementing Rules:

(1) “foreground” means the results, including information, whether or not they can be protected, which are generated by actions. Such results include rights related to copyright; design rights; patent rights; plant variety rights; or similar forms of protection;

(2) “background” means information which is held by participants prior to their accession to the grant agreement, as well as copyrights or other intellectual property rights pertaining to such information, the application for which has been filed before their accession to the grant agreement, and which is needed for carrying out the indirect action or for using the results of the indirect action;

(3) “research organisation ” means a non-profit making organisation which carries out scientific or technical research as its main objective;

(4) “third country” means a State that is not a Member State;

(5) “Associated country” means a third country which is party to an international agreement with the European Atomic Energy Community, under the terms or on the basis of which it makes a financial contribution to all or part of the Seventh Framework Programme;

(6) “international organisation” means an intergovernmental organisation, other than the European Atomic Energy Community, which has legal personality under international public law, as well as any specialised agency set up by such an international organisation;

(7) “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;

(8) “public body” means any legal entity established as such by national public law, and international organisations;

(9) “SMEs” mean micro, small and medium-sized enterprises within the meaning of Recommendation 2003/361/EC in the version of 6 May 2003;

(10) “work programme” means a plan adopted by the Commission for the implementation of a specific programme as identified in Article 2 of Decision […/…];

(11) “funding schemes” mean the mechanisms for the Community funding of indirect actions as established in part (a) of Annex II to Decision […/…];

(12) “ Associate ” means a legal entity which has concluded a Contract of Association with the European Atomic Energy Community.

Article 3

Confidentiality

Subject to the conditions established in the grant agreement, appointment letter or contract, the Commission and the participants shall keep confidential any data, knowledge and documents communicated to them as confidential.

Chapter II Participation

Article 4

The rules set out in this Chapter apply without prejudice to specific rules for activities under the thematic area “Fusion energy research” set out in Chapter IV.

SECTION 1 MINIMUM CONDITIONS

Article 5

General principles

1. Any undertaking, university or research centre or other legal entity, whether established in a Member State or Associated country, or in a third country, may participate in an indirect action provided that the minimum conditions laid down in this Chapter have been met, including any conditions specified pursuant to Article 11.

However, in the case of an indirect action as referred to in Articles 6(1) and 8, under which it is possible for the minimum conditions to be met without the participation of a legal entity established in a Member State, the attainment of the objectives laid down in Articles 1 and 2 of the Treaty must thereby be enhanced.

A legal entity is any natural person, or any legal person created under the national law of its place of establishment, or under Community law or international law, which has legal personality and which may, acting under its own name, exercise rights and be subject to obligations.

2. In the case of natural persons, references to establishment shall be deemed to refer to habitual residence.

3. The Joint Research Centre of the European Commission, hereinafter “the JRC”, may participate in indirect actions on the same footing and with the same rights and obligations as a legal entity established in a Member State.

Article 6

Minimum conditions

1. The minimum conditions for indirect actions shall be the following:

(a) at least three legal entities must participate, each of which is established in a Member State or Associated country, and no two of which are established in the same Member State or Associated country;

(b) all three legal entities must be independent of each other in accordance with Article 7.

2. For the purposes of point (a) of paragraph 1, where one of the participants is the JRC, or an international European interest organisation or an entity created under Community law, it shall be deemed to be established in a Member State or Associated country other than any Member State or Associated country in which another participant in the same action is established.

Article 7

Independence

1. Two legal entities shall be regarded as independent of each other where neither is under the direct or indirect control of the other or under the same direct or indirect control as the other.

2. For the purposes of paragraph 1, control may in particular take either 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.

3. However, the following relationships between legal entities shall not in themselves be deemed to 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.

Article 8

Coordination and support actions, and training and career development of researchers

For coordination and support actions, and actions in favour of training and career development of researchers, the minimum condition shall be the participation of one legal entity.

The first paragraph shall not apply in the case of actions that coordinate research activities.

Article 9

Sole participants

Where the minimum conditions for an indirect action are satisfied by a number of legal entities, which together form one legal entity, the latter may be the sole participant in an indirect action, provided that it is established in a Member State or Associated country.

Article 10

International organisations and legal entities established in third countries

Participation in indirect actions shall be open to international organisations and legal entities established in third countries after the minimum conditions laid down in this Chapter have been met, as well as any conditions specified in the specific programmes or relevant work programmes.

Article 11

Additional conditions

In addition to the minimum conditions laid down in this Chapter, specific programmes or work programmes may lay down conditions regarding the minimum number of participants.

They may also lay down, according to the nature and objectives of the indirect action, additional conditions to be met as regards type of participant and, where appropriate, place of establishment.

SECTION 2 PROCEDURES

SUBSECTION 1

CALLS FOR PROPOSALS

Article 12

Calls for proposals

1. The Commission shall issue calls for proposals for indirect actions in accordance with the requirements laid down in the relevant specific programmes and work programmes.

In addition to the publicity specified in the Implementing Rules, the Commission shall publish calls for proposals in the Internet pages of the Seventh Framework Programme, through specific information channels, and at the national contact points set up by the Member States and the Associated countries.

2. Where appropriate, the Commission shall specify in the call for proposals that the participants need not establish a consortium agreement.

Article 13

Exceptions

The Commission shall not issue calls for proposals for the following:

(a) coordination and support actions to be carried out by legal entities identified in the specific programmes or in the work programmes when the specific programme permits the work programmes to identify beneficiaries, in accordance with the Implementing Rules;

(b) coordination and support actions consisting of a purchase or service subject to the rules on public procurement set out in the Financial Regulation;

(c) coordination and support actions relating to the appointment of independent experts;

(d) other actions, where so provided by the Financial Regulation or the Implementing Rules.

SUBSECTION 2EVALUATION OF PROPOSALS

Article 14

Evaluation, selection and award

1. The Commission shall evaluate all the proposals submitted in response to a call for proposals on the basis of the principles for evaluation, and the selection and award criteria set out in the specific programme and the work programme.

The work programme may set out specific criteria or further details on the application of the criteria.

2. A proposal which contravenes fundamental ethical principles or which does not fulfil the conditions set out in the specific programme, the work programme or in the call for proposals shall not be selected. Such a proposal may be excluded from the evaluation, selection and award procedures at any time.

3. Proposals shall be selected on the basis of the evaluation results.

Article 15

Submission, evaluation, selection and award procedures

1. The Commission shall adopt and publish rules governing the procedure for the submission of proposals, as well as the related evaluation, selection and award procedures. In particular, it shall lay down detailed rules for the two-stage procedure for submission, and rules for the two-step evaluation procedure.

2. Where a call for proposals specifies a two-stage submission procedure, only those proposals that pass the evaluation criteria for the first stage shall be requested to submit a complete proposal in the second stage.

3. Where a call for proposals specifies a two-step evaluation procedure, only those proposals that pass the first step, based on the evaluation of a limited set of criteria, shall go forward for further evaluation.

4. The Commission shall adopt and publish rules to ensure consistent verification of the existence and legal status of participants in indirect actions as well as their financial capacity.

Article 16

Appointment of independent experts

1. The Commission shall appoint independent experts to assist with evaluations required under the Seventh Framework Programme, and its specific programmes.

For coordination and support actions, referred to in Article 13 , independent experts shall be appointed only if the Commission deems it appropriate.

2. Independent experts shall be chosen considering the skills and knowledge appropriate to the tasks assigned to them.

Independent experts shall be identified and selected on the basis of calls for applications from individuals and calls addressed to national research agencies, research institutions or enterprises with a view to establishing lists of suitable candidates.

The Commission may, if deemed appropriate, select any individual with the appropriate skills from outside the lists.

Appropriate measures shall be taken to ensure reasonable gender balance when appointing groups of independent experts.

3. When appointing an independent expert, the Commission shall take all necessary steps to ensure that the expert is not faced with a conflict of interests in relation to the matter on which the expert is required to provide an opinion.

4. The Commission shall adopt a model appointment letter, hereinafter “the appointment letter”, which shall include a declaration that the independent expert has no conflict of interest at the time of appointment and that he undertakes to inform the Commission if any conflict of interest should arise in the course of providing his opinion or carrying out his duties. The Commission shall conclude an appointment letter between the Community and each independent expert.

5. The Commission shall publish periodically in any appropriate medium the list of the independent experts that have assisted it for each specific programme.

SUBSECTION 3 IMPLEMENTATION AND GRANT AGREEMENTS

Article 17

General

1. The participants shall implement the indirect action and shall take all necessary and reasonable measures to that end. Participants in the same indirect action shall implement the work jointly and severally towards the Community.

2. The Commission shall draw up, on the basis of the model provided for in Article 18(7) and taking into account the characteristics of the funding scheme concerned, a grant agreement between the Community and the participants.

3. Participants shall make no commitments incompatible with the grant agreement.

4. Where a participant fails to comply with its obligations, the other participants shall comply with the grant agreement without any complementary Community contribution unless the Commission expressly relieves them of that obligation.

5. If the implementation of an action becomes impossible or if the participants fail to implement it, the Commission shall ensure the termination of the action.

6. Participants shall ensure that the Commission is informed of any event which might affect the implementation of the indirect action or the interests of the Community.

Article 18

General provisions for inclusion in grant agreements

1. The grant agreement shall establish the rights and obligations of the participants with regard to the Community, in accordance with Decision […/…], this Regulation, the Financial Regulation, and the Implementing Rules, and in accordance with the general principles of Community law.

It shall also establish, in accordance with the same conditions, the rights and obligations of legal entities who become participants when the indirect action is ongoing.

2. W here appropriate, the grant agreement shall provide which part of the Community financial contribution will be based on the reimbursement of eligible costs, and which part will be based on flat rates (including scale of unit costs) or lump-sums.

3. The grant agreement shall specify which changes in the composition of the consortium are to require the prior publication of a competitive call.

4. The grant agreement shall require the submission to the Commission of periodic progress reports concerning the implementation of the indirect action concerned.

5. Where appropriate, the grant agreement may provide that the Commission is to be notified in advance of any intended transfer of ownership of foreground to a third party.

6. Where the grant agreement requires participants to carry out activities that benefit third parties, the participants shall advertise this widely and identify, evaluate and select third parties transparently, fairly and impartially. If provided for in the work-programme, the grant agreement shall establish criteria for the selection of such third parties. The Commission reserves the right to object to the selection of the third parties.

7. The Commission shall establish a model grant agreement in accordance with this Regulation.

8. The model grant agreement shall reflect the principles laid down in the European Charter for Researchers and the Code of Conduct for the Recruitment of Researchers[10]. It shall address, as appropriate, synergies with education at all levels; readiness and capacity to foster dialogue and debate on scientific issues and research results with a broad public beyond the research community; activities to increase the participation and role of women in research; and activities addressing socio-economic aspects of the research.

Article 19

Provisions concerning access rights, use and dissemination

1. The grant agreement shall establish the respective obligations of the participants with regard to access rights, use and dissemination, in so far as those obligations have not been laid down in this Regulation.

For those purposes, it shall require the submission to the Commission of a plan for the use and dissemination of foreground.

2. The grant agreement may specify the conditions under which the participants may object to a technological audit of the use and dissemination of the foreground being carried out by certain authorised representatives of the Commission.

Article 20

Provisions concerning termination

The grant agreement shall specify the grounds for its termination, in whole or in part, in particular for non-compliance with this Regulation, non-performance or breach, as well as the consequences for participants of any non-compliance on the part of another participant.

Article 21

Specific provisions

1. In the case of indirect actions to support existing research infrastructures and, where applicable, new research infrastructures, the grant agreement may lay down specific provisions relating to confidentiality, publicity and access rights and commitments that might affect users of the infrastructure.

2. In the case of indirect actions to support training and career development of researchers, the grant agreement may lay down specific provisions on confidentiality, access rights and commitments relating to the researchers benefiting from the action.

3. To safeguard the defence interests of the Member States within the meaning of Article 24 of the Treaty, the grant agreement may lay down, where appropriate, specific provisions on confidentiality, classification of information, access rights, transfer of ownership of foreground and the use thereof.

Article 22

Signature and accession

The grant agreement shall enter into force upon signature by the coordinator and the Commission.

It shall apply to each participant that has formally acceded thereto.

SUBSECTION 4 CONSORTIA

ARTICLE 23

Consortium agreements

Save where otherwise provided in the call for proposals, all legal entities wishing to participate in an indirect action shall draw up an agreement, hereinafter “the consortium agreement” , to govern the following:

(a) the internal organisation of the consortium;

(b) the distribution of the Community financial contribution;

(c) additional rules on dissemination and use including intellectual property rights arrangements, as appropriate;

(d) the settlement of internal disputes.

Article 24

Coordinator

1. The legal entities wishing to participate in an indirect action shall appoint one of their number to act as coordinator to carry out the following tasks in accordance with this Regulation, the Financial Regulation, the Implementing Rules, and the grant agreement:

(a) to ensure that the legal entities identified in the grant agreement complete the necessary formalities for accession to the grant agreement, as provided for therein;

(b) to receive the Community financial contribution and to distribute it ;

(c) to keep the financial accounts in order, to keep records and to inform the Commission of the distribution of the Community financial contribution in accordance with Article 35;

(d) to ensure efficient and correct communication between the participants and the Commission.

2. The coordinator shall be identified in the grant agreement.

The appointment of a new coordinator shall require the written approval of the Commission.

Article 25

Changes in the consortium

1. The participants in an indirect action may propose the addition of a new participant or the removal of an existing participant.

2. Any legal entity which joins an ongoing action shall accede to the grant agreement.

3. Where provided for in the grant agreement, the consortium shall publish a competitive call and advertise it widely using specific information support, particularly Internet sites on the Seventh Framework Programme, the specialist press and brochures , and the national contact points set up by the Member States and Associated countries for information and support.

The consortium shall evaluate offers in the light of the criteria which governed the initial action and with the assistance of independent experts appointed by the consortium, in accordance with the principles laid down in Articles 14, and Article 16, respectively.

4. The consortium shall notify any change of its composition to the Commission, which may object within 45 days of the notification.

Changes in the composition of the consortium associated with proposals for other changes to the grant agreement which are not directly related to the change in composition shall be subject to written approval by the Commission.

SUBSECTION 5MONITORING OF PROGRAMMES AND INDIRECT ACTIONS AND COMMUNICATION OF INFORMATION

Article 26

Monitoring

The Commission shall monitor the implementation of indirect actions on the basis of the periodic progress reports submitted pursuant to Article 18(4).

In particular, the Commission shall monitor the implementation of the plan for the use and dissemination of foreground, submitted pursuant to the second subparagraph of Article 19(1). For those purposes, the Commission may be assisted by independent experts appointed in accordance with Article 16.

The Commission shall monitor the Seventh Framework Programme, its specific programmes and, where appropriate, previous framework programmes, with the assistance of independent experts appointed in accordance with Article 16. In addition, it may set up groups of independent experts appointed in accordance with Article 16, to advise on the implementation of Community research policy.

Article 27

Information to be made available

1. Upon request, the Commission shall make available to any Member State or Associated country any useful information in its possession on foreground arising from work carried out in the context of an indirect action, provided that the following conditions are met:

(a) the information concerned is relevant to public policy;

(b) the participants have not provided sound and sufficient reasons for withholding the information concerned.

2. Under no circumstances shall the provision of information pursuant to paragraph 1 be deemed to transfer to the recipient any rights or obligations of the Commission or of the participants.

However, the recipient shall treat any such information as confidential unless it becomes public or is made available publicly by the participants, or unless it was communicated to the Commission without restrictions on its confidentiality.

SECTION 3 COMMUNITY FINANCIAL CONTRIBUTION

SUBSECTION 1 ELIGIBILITY FOR FUNDING AND FORMS OF GRANTS

Article 28

Eligibility for funding

1. Where any of the following legal entities participates in an indirect action, it may receive a Community financial contribution:

(a) any legal entity established in a Member State or an Associated country, or created under Community law,

(b) any international European interest organisation,

2. In the case of a participating international organisation, other than an international European interest organisation, or a legal entity established in a third country, a Community financial contribution may be granted provided that at least one of the following conditions is satisfied:

(a) provision is made to that effect in the specific programmes or in the relevant work programme,

(b) it is essential for carrying out the indirect action,

(c) such funding is provided for in a bilateral scientific and technological agreement or any other arrangement between the Community and the country in which the legal entity is established.

Article 29

Forms of grants

1. The Community financial contribution for grants identified in part (a) of Annex II to the Seventh Framework Programme shall be based on the reimbursement of eligible costs.

However, the Community financial contribution may take the form of flat rate financing, including scale of unit costs, or lump sum financing, or it may combine the reimbursement of eligible costs with flat rates and lump sums. The Community financial contribution may also take the form of scholarships or prizes.

2. While the Community financial contribution shall be calculated by reference to the cost of the indirect action as a whole, it shall be based on the reported costs of each participant.

Article 30

Reimbursement of eligible costs

1. Grants shall be co-financed by the participants.

The Community financial contribution to reimburse eligible costs shall not give rise to a profit.

2. Receipts shall be taken into consideration for the payment of the grant at the end of the implementation of the action.

3. In order to be considered eligible, costs incurred for the implementation of an indirect action shall meet the following conditions:

(a) they must be actual;

(b) they must have been incurred during the duration of the action, with the exception of final reports when provided for in the grant agreement;

(c) they must have been determined in accordance with the usual accounting and management principles and practices of the participant and used for the sole purpose of achieving the objectives of the indirect action and its expected results, in a manner consistent with the principles of economy, efficiency and effectiveness;

(d) they must be recorded in the accounts of the participant and paid and, in the case of any contribution from third parties, they must be recorded in the accounts of the third parties;

(e) they must be exclusive of non-eligible costs, in particular identifiable indirect taxes including value added tax, duties, interest owed, provisions for possible future losses or charges, exchange losses, cost related to return on capital, costs declared or incurred, or reimbursed in respect of another Community project , debt and debt service charges, excessive or reckless expenditure, and any other cost that does not meet the conditions referred to in points (a) to (d).

For the purposes of point (a), average personnel costs may be used if they are consistent with the management principles and accounting practices of the participant and do not differ significantly from actual costs.

Article 31

Direct eligible costs and indirect eligible costs

1. Eligible costs shall be composed of costs attributable directly to the action, hereinafter “direct eligible costs” and, where applicable, of costs which are not attributable directly to the action, but which have been incurred in direct relationship with the direct eligible costs attributed to the action, hereinafter “indirect eligible costs”.

2. For the coverage of indirect eligible costs, a participant may opt for a flat-rate of its total direct eligible costs, excluding its direct eligible costs for subcontracting.

3. The grant agreement may provide that the reimbursement of indirect eligible costs is to be limited to a maximum percentage of the direct eligible costs, excluding the direct eligible costs for subcontracting, in particular in the case of coordination and support actions, and, where appropriate, actions for training and career development of researchers.

Article 32

Upper funding limits

1. For research and technological development activities, the Community financial contribution may reach a maximum of 50% of the total eligible costs.

However, in the case of public bodies, secondary and higher education establishments, research organisations and SMEs, it may reach a maximum of 75% of the total eligible costs.

2. For demonstration activities, the Community financial contribution may reach a maximum of 50% of the total eligible costs.

3. For activities supported by coordination and support actions, and actions for the training and career development of researchers, the Community financial contribution may reach a maximum of 100% of the total eligible costs.

4. For management and audit certificates, and other activities not covered by paragraphs 1, 2 and 3, the Community financial contribution may reach a maximum of 100% of the total eligible costs.

The other activities referred to in the first subparagraph include, inter alia , training in actions that do not fall under the funding scheme for training and career development of researchers, coordination, networking, and dissemination.

5. For the purposes of paragraphs 1 to 4, eligible costs minus receipts shall be taken into consideration in order to determine the Community financial contribution.

6. Paragraphs 1 to 5 shall apply, as appropriate, in the case of indirect actions where flat rate financing or lump sum financing is used for the whole indirect action.

Article 33

Reporting and audit of eligible costs

1. Periodic reports shall be submitted to the Commission regarding eligible costs, financial interest yielded by pre-financing, and receipts in relation with the indirect action concerned and, where appropriate, certified by an audit certificate, in accordance with the Financial Regulation and the Implementing Rules.

The existence of co-financing in relation with the concerned action shall be reported and, where appropriate, certified at the end of the action.

2. In the case of public bodies, research organisations, and higher and secondary education establishments, an audit certificate as required under paragraph 1 may be established by a competent public officer.

Article 34

Networks of Excellence

1. Unless otherwise provided for in the work programme, the Community financial contribution to Networks of Excellence shall be in the form of a lump-sum calculated according to the number of researchers to be integrated in the Network of Excellence and the duration of the action.

2. The unit value for lump sums paid under paragraph 1 shall be EUR 23 500 per year and per researcher.

That amount shall be adjusted by the Commission in accordance with the Financial Regulation and the Implementing Rules.

3. The work programme shall establish the maximum number of participants and, where appropriate, the maximum number of researchers that may be used as the basis for the calculation of the maximum lump sum pursuant to paragraph 1. However, participants over and above the maxima for the establishment of the financial contribution may participate as appropriate.

4. The payment of lump sums under paragraph 1 shall be effected by means of periodic releases.

Those periodic releases shall be made according to the assessment of the progressive implementation of the Joint Programme of Activities through the measurement of integration of research resources and capacities based on performance indicators negotiated with the consortium and specified in the grant agreement.

SUBSECTION 2 PAYMENT, DISTRIBUTION, RECOVERY AND GUARANTEES

Article 35

Payment and distribution

1. The Community financial contribution shall be paid to the participants via the coordinator.

2. The coordinator shall keep records making it possible to determine at any time what portion of the Community funds has been distributed to each participant.

The coordinator shall communicate that information to the Commission upon request.

Article 36

Recovery

The Commission may adopt a recovery decision in accordance with the Financial Regulation.

Article 37

Retained amounts for risk avoidance

1. Depending on the level of risk associated with non-recovery of sums due to the Community, the Commission may retain a small percentage of the Community financial contribution to each participant in an indirect action in order to cover any amounts due and not reimbursed by defaulting participants in indirect actions.

2. Paragraph 1 shall not apply to the following:

(a) public bodies, legal entities whose participation in the indirect action is guaranteed by a Member State or an Associated country, and higher and secondary education establishments;

(b) participants in actions to support training and career development of researchers.

The types of participant referred to in points (a) and (b) shall each be responsible for their own debts.

3. The amounts retained shall constitute revenue assigned to the Seventh Framework Programme within the meaning of Article 18(2) of the Financial Regulation.

4. At the end of the framework programme an assessment shall be made of the amounts required to cover outstanding risks. Any sums in excess of these amounts shall be reimbursed to the framework programme and constitute earmarked revenue.

Chapter IIIDissemination and use, and access rights

Article 38

The rules set out in this Chapter apply without prejudice to the specific rules for activities under the thematic area “Fusion energy research” set out in Chapter IV of this regulation.

SECTION 1 FOREGROUND

S UBSECTION 1 OWNERSHIP

Article 39

Ownership of foreground

1. Foreground shall be the property of the Community in the following cases:

(a) coordination and support actions consisting in a purchase or service subject to the rules on public procurement set out in the Financial Regulation;

(b) coordination and support actions relating to independent experts.

2. Foreground arising from work carried out under indirect actions other than those referred to in paragraph 1 shall be the property of the participants carrying out the work generating that foreground.

3. If employees or other personnel working for a participant are entitled to claim rights to foreground, the participant shall ensure that it is possible to exercise those rights in a manner compatible with its obligations under the grant agreement.

Article 40

Joint ownership of foreground

1. Where several participants have jointly carried out work generating foreground and where their respective share of the work cannot be ascertained, they shall have joint ownership of such foreground.

2. Where no joint ownership agreement has been concluded regarding the allocation and terms of exercising that joint ownership, each of the joint owners shall be entitled to grant non-exclusive licenses to third parties, without any right to sub-licence subject to the following conditions:

(a) prior notice must be given to the other joint owners;

(b) fair and reasonable compensation must be provided to the other joint owners .

Article 41

Transfer of foreground

1. Where a participant transfers ownership of foreground, it shall pass on its obligations to the assignee , in particular those relating to the granting of access rights, and dissemination and use, in accordance with the grant agreement.

2. Subject to its obligations concerning confidentiality, where the participant is required to pass on access rights, it shall give prior notice to the other participants in the same action, together with sufficient information concerning the new owner of the foreground to permit them to exercise their access rights under the grant agreement.

However, the other participants may, by written agreement, waive their right to individual prior notice in the case of transfers of ownership from one participant to a specifically identified third party.

3. Following notification in accordance with the first subparagraph of paragraph 2, the other participants may object to any transfer of ownership on the ground that it would adversely affect their access rights.

Where the other participants demonstrate that their rights would be adversely affected, the intended transfer shall not take place until agreement has been reached between the participants concerned.

4. Where appropriate, the grant agreement may provide, by way of an additional requirement, that the Commission is to be notified in advance of any intended granting of licences or transfer of ownership to a third party.

Article 42

Preservation of European competitiveness, the defence interest of Member States and ethical principles

The Commission may object to the transfer of ownership of foreground, or to the granting of a licence regarding foreground to a legal entity which is established in a third country not associated to the Seventh Framework Programme, if it considers this is not in accordance with the interests of developing the competitiveness of the European economy, the defence interests of the Member States within the meaning of Article 24 of the Treaty or is inconsistent with ethical principles. In such cases, the transfer of ownership or grant of a licence shall not take place unless the Commission is satisfied that appropriate safeguards will be put in place.

SUBSECTION 2 PROTECTION, PUBLICATION, DISSEMINATION AND USE

Article 43

Protection of foreground

1. Where foreground is capable of industrial or commercial application, its owner shall provide for its adequate and effective protection in conformity with relevant legislation, and having due regard to the legitimate interests, particularly the commercial interests, of the participants in the indirect action concerned.

Where a participant invokes legitimate interest, it must, in any given instance, show that it would suffer disproportionately great harm.

2. Where the owner of foreground does not protect foreground that it owns, and does not transfer it to another participant in accordance with Article 41(1) and (2), no dissemination activities may take place before the Commission has been informed.

In such cases, the Commission may, with the consent of the participant concerned, assume ownership of that foreground and adopt measures for its adequate and effective protection. The participant concerned may refuse consent only if it can demonstrate that its legitimate interests would suffer disproportionately great harm.

Article 44

Statement relating to Community financial support

All publications, patent applications filed by or on behalf of a participant, or any other dissemination relating to foreground, shall include a statement that the foreground concerned was generated with the assistance of financial support from the Community.

The terms of that statement shall be established in the grant agreement.

Article 45

Use and dissemination

1. The participants shall use the foreground which they own, or ensure that it is used.

2. Each participant shall ensure that the foreground of which it has ownership is disseminated as swiftly as possible. If it fails to do so, the Commission may disseminate that foreground pursuant to Article 12 of the Treaty.

3. Dissemination activities shall be compatible with intellectual property rights, confidentiality, the legitimate interests of the owner of the foreground and the defence interests of the Member States within the meaning of Article 24 of the Treaty.

4. Prior notice of any dissemination activity shall be given to the other participants concerned.

Following notification, any of those participants may object if it considers that its legitimate interests in relation to its foreground could suffer disproportionately great harm. In such cases, the dissemination activity may not take place unless appropriate steps are taken to safeguard these legitimate interests.

SECTION 2ACCESS RIGHTS TO BACKGROUND AND FOREGROUND

Article 46

Background covered

Participants may define the background needed for the purposes of the indirect action in a written agreement and, where appropriate, may exclude specific background.

Article 47

Principles

1. All requests for access rights shall be made in writing .

2. Unless otherwise agreed by the owner of the foreground or background, access rights shall confer no entitlement to grant sub-licences.

3. Exclusive licences for foreground or background may be granted, subject to written confirmation by all the other participants concerned that they waive their access rights thereto.

4. Without prejudice to paragraph 3, any agreement providing access rights to foreground or background to participants or third parties shall be such as to ensure that potential access rights for other participants are maintained.

5. Participants in the same action shall inform each other as soon as possible of any limitation to the granting of access rights to background, or of any other restriction which might substantially affect the granting of access rights.

6. The termination of its participation in an indirect action shall in no way affect the obligation of that participant to grant access rights to the remaining participants in the same action under the terms and conditions established by the grant agreement.

Article 48

Access rights for implementation of indirect actions

1. Access rights to foreground shall be granted to other participants in the same indirect action, if it is needed to enable those participants to carry out their own work under that indirect action.

Such access rights shall be granted on a royalty-free basis.

2. Access rights to background shall be granted to the other participants in the same indirect action, if it is needed to enable those participants to carry out their own work under that indirect action provided that the participant concerned is entitled to grant them.

Such access rights shall be granted on a royalty-free basis, unless otherwise agreed by all participants before their accession to the grant agreement.

Article 49

Access rights for use

1. Participants in the same indirect action shall enjoy access rights to foreground , if it is needed to use their own foreground.

Such access rights shall be granted either under fair and reasonable conditions, or royalty-free.

2. Participants in the same indirect action shall enjoy access rights to background , if it is needed to use their own foreground provided that the participant concerned is entitled to grant them.

Such access rights shall be granted either under fair and reasonable conditions, or royalty-free.

3. A request for access rights under paragraphs 1 or 2 may be made up to one year after either of the following events:

(a) the end of the indirect action ;

(b) termination of participation by the owner of the background or foreground concerned.

However, the participants concerned may agree on a different time-limit.

Chapter IV Specific Rules for Participation in activities under the thematic area “fusion energy research”

Article 50

Scope

The rules set out in this Chapter apply to activities under the thematic area “Fusion energy research” as set out in the specific programme. In the event of any conflict between the rules set out in this Chapter and those set out in Chapters II and III, the rules set out in this Chapter shall apply.

Article 51

Implementation of Fusion Energy Research

Activities under the thematic area ‘Fusion energy research’ may be implemented on the basis of procedures and rules for dissemination and use set out in the following frameworks:

(a) The Contracts of Association, concluded between the Community and Member States or Associated Third Countries or legal entities within Member States or Associated Third Countries;

(b) The European Fusion Development Agreement (EFDA), concluded between the Community and organisations in, or acting for, Member States and Associated Countries;

(c) The European Joint Undertaking for ITER, based on the provisions of Title II, Chapter 5 of the Treaty;

(d) International agreements relating to cooperation with third countries, or any legal entity which may be established by such an agreement, in particular the ITER Agreement;

(e) Any other multilateral agreement concluded between the Community and associated organisations, in particular the Agreement on Staff Mobility;

(f) Cost sharing actions to promote and contribute to fusion energy research with bodies in the Member States or the Countries associated with the Seventh Framework Programme in which there is no Contract of Association.

Article 52

Community financial contribution

1. The Contracts of Association referred to in Article 51(a) and cost sharing actions referred to in Article 51(f) shall establish the rules relating to the Community financial contribution to the activities they cover.

The annual base rate for the Community financial contribution shall not exceed 20 % over the duration of the Seventh Framework Programme.

2. After consultation of the consultative committee for the fusion programme referred to in Article 7(2) of the Specific Programme implementing the seventh Framework Programme (2007-11) of the European Atomic Energy Community (Euratom) for nuclear research and training activities, the Commission may finance:

(a) within the framework of the Contracts of Association at a rate not exceeding 40%: expenditure of specific co-operative projects between the Associates which have been recommended for priority support by the consultative committee and approved by the Commission; priority support will concentrate on actions of relevance to the ITER/DEMO, except in the case of projects which have already been awarded priority status during earlier framework programmes;

(b) actions carried out under the European Fusion Development Agreement including procurements or within the framework of the Joint Undertaking referred to in Article 51 (c);

(c) actions carried out under the Agreement on Staff Mobility.

3. In the case of projects and actions receiving a financial contribution according to paragraph (2) (a) or (b), all the legal entities referred to in Article 51(a) and (b) shall have the right to take part in the experiments carried out on the equipment concerned.

4. The Community financial contribution to actions carried out within the framework of an international cooperation agreement referred to in Article 51(d) shall be set out in accordance with the terms of such agreement or by any legal entity established by the agreement. The Community may manage its participation and its financial contribution to such an agreement through any appropriate legal entity.

Chapter VFinal provisions

Article 53

This Regulation shall enter into force on the third day following its publication in the Official Journal of the European Union.

It shall apply from 1 January 2007.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels,

For the Council

The President

[1] OJ C , , p.

[2] OJ C , , p.

[3] OJ C , , p.

[4] OJ C , , p.

[5] OJ C , , p.

[6] OJ L 248, 16.9.2002, p. 1.

[7] OJ L 357, 31.12.2002, p. 1, as amended by Commission Regulation (EC, EURATOM) No 1261/2005 (OJ L 201, 2.8.2005, p. 3).

[8] Currently Community Framework for State Aid for Research and Development,OJ C 45, 17.2.1996, p. 5.

[9] OJ L 124, 20.5.2003, p. 36.

[10] OJ L 75, 22.3.2005, p. 67.