link to page 2 link to page 4 link to page 6 link to page 8 link to page 8 link to page 8 link to page 9 link to page 10 link to page 10 link to page 11 link to page 12 link to page 13 link to page 14 link to page 15 link to page 16 link to page 17 link to page 19 link to page 20 link to page 21 link to page 21

Article 1: Definitions
Action:
the cooperation programme or project partly or wholly financed by the EU,
which  is  carried  out  by  the  Organisation  as  described  in  Annex  I.  Where
reference  is  made  to  the  Action  or  part  of  the  Action  financed  by  the  EU
Contribution, this refers both (i) to activities exclusively financed by the EU
Contribution and (ii) to activities jointly co-financed by the EU.
Contractor:
a natural or legal person with whom a Procurement Contract has been signed.
Days:
calendar days.
Early Detection
and Exclusion System:   a system set up by Regulation (EU, Euratom) No 2015/1929 of 28 October
2015 on the financial rules applicable to the general budget of the Union (OJ
L  286/1,  30.10.2015),  which  includes information  on  the  early  detection  of
risks threatening the EU financial interests, on the cases of exclusion from EU
funding of legal and natural persons and on the cases of imposition of financial
penalties.
End Date:
the date by which the Agreement ends, i.e. the moment of the payment of the
balance by the Contracting Authority in accordance with Article 17 or when
the Organisation repays any amounts paid in excess of the final amount due
pursuant  to  Article  18.  If  any  of  the  Parties  invokes  a  dispute  settlement
procedure in accordance with Article 13, the End Date shall be postponed until
the completion of such procedure.
EU Financial
Regulation
Regulation (EU, Euratom) No. 2018/1046 of the European Parliament and of
the Council of 18 July 2018 on the financial rules applicable to the general
budget  of  the  Union,  amending  Regulations  (EU)  No  1296/2013,  (EU)  No
1301/2013,  (EU)  No  1303/2013,  (EU)  No  1304/2013,  (EU)  No  1309/2013,
(EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No
541/2014/EU and repealing Council Regulation (EC, Euratom) No 996/2012
(OJ L 193, 30.7.2018, p. 1).

Ex-ante
Pillar-Assessment:
an  assessment  of  the  systems,  rules  and  procedures  carried  out  in  order  to
check  whether  such  entity  demonstrates  a  level  of  protection  of  the  EU
financial interests equivalent to that existing when the European Commission
implements the budget itself.

Final Beneficiary:
a natural or legal person ultimately benefitting from the Action.
Force Majeure:
any  unforeseeable  and  exceptional  situation  or  event  beyond  the  Parties'
control which prevents either of them from fulfilling any of their obligations
under the Agreement, which may not be attributed to error or negligence on
either  part  (or  on  the  part  of  the  Grant  Beneficiaries,  Partners,  Contractors,
agents or staff), and which could not have been avoided by the exercise of due
diligence. Defects in equipment or material or delays in making them available
cannot be invoked as force majeure, unless they stem directly from a relevant
case  of  force  majeure.  Labour  disputes, strikes  or  financial  problems  of  the
Organisation cannot be invoked as force majeure by the defaulting Party.
Grant:
a direct financial contribution by way of donation given by the Organisation
or  a  Partner  to  finance  third  parties  activities,  including  sub-granting  and
procurement for the implementation of these activities.
Contribution Agreement June 2023
Annex II - General Conditions
Page 2

Grant Beneficiary:
a natural or legal person to whom a Grant has been awarded.
Grave Professional
Misconduct:
any of:
a  violation  of  applicable  laws  or  regulations,  in  particular  the
Organisation’s  Regulations  and  Rules,  or  ethical  standards  of  the
profession  to  which  a  person  or  entity  belongs,  including  any  conduct
leading to sexual or other exploitation or abuse, or
any  wrongful  conduct  of  a  person  or  entity  which  has  an  impact  on  its
professional  credibility  where  such  conduct  denotes  wrongful  intent  or
gross negligence.
Impact:
the overall objective of the Action entailing positive and negative, primary and
secondary long-term effects produced by a development intervention, directly
or indirectly, intended or unintended.
Indicator:
the quantitative and/or qualitative factor or variable that provides a simple and
reliable means to measure progress in the achievement of the relevant Results
of the Action. An indicator must have an agreed baseline, target and source of
data.
Internal
Control System:
a  process  applicable  at  all  levels  of  management  designed  to  provide
reasonable assurance of achieving the following objectives:
a)  effectiveness, efficiency and economy of operations;
b)  reliability of reporting;
c)  safeguarding of assets and information;
d)  prevention, detection, correction and follow-up of fraud and irregularities;
e)  adequate management of the risks relating to the legality and regularity of
the financial operations, taking into account the multiannual character of
programmes as well as the nature of the payments concerned.
International
Organisation:
an international public-sector organisation set up by international agreement
(including  specialised  agencies  set  up  by  such  organisations),  or  an
organisation assimilated to international organisations in accordance with the
EU Financial Regulation.
Member State
Organisation:
an entity established in a Member State of the European Union as a public law
body  or  as  a  body  governed  by  private  law  entrusted  with  a  public  service
mission  and  provided  with  adequate  financial  guarantees  from  the  Member
State.
Multi-Donor Action:
an Action co-financed by the EU Contribution (whether or not earmarked) and
other donor(s).
Outcome:
the specific objective of the Action entailing the likely or achieved short-term
and medium-term effects of an Action’s Outputs. For non-EU external actions
“Outcomes” are synonymous of Results.
Output:
the  products,  capital  goods  and  services  which  result  from  an  Action’s
activities.
Partner:
an  entity  implementing  part  of  the  Action  and  being  a  party  to  the relevant
Contribution Agreement together with the Organisation.
Procurement Contract:  a  contract  signed  between  the  Contractor  and  either  the  Organisation  or  a
Partner under which the Contractor provides services, supplies or works.
Contribution Agreement June 2023
Annex II - General Conditions
Page 3

Regulations and Rules:  regulations, rules, organisational directives, instructions and other parts of the
regulatory framework of the Organisation.
Result:
the Output, Outcome or Impact of an Action.

Sound Financial
Management:
a  principle  overarching  the  implementation  of  this  Agreement,  namely
economy,  effectiveness  and  efficiency  (including  all  aspects  of  internal
control). The principle of economy requires that resources used in the pursuit
of the implementation of the Action shall be made available in due time, in
appropriate  quantity  and  quality  and  at  the  best  price.  The  principle  of
effectiveness  concerns  the  attainment  of  the  specific  objectives  and  the
achievement of the intended results. The principle of efficiency concerns the
best relationship between resources employed and results achieved.

Article 2: General obligations
Implementation of the Action
2.1
The  Organisation  is  responsible  for  the  implementation  of  the  Action  described  in  Annex  I,
regardless of whether the activities are performed by the Organisation itself, a Contractor or a
Grant Beneficiary. Both Parties will endeavour to strengthen their mutual contacts with a view
to foster the exchange of information throughout the implementation of the Action. To this end,
the Organisation and the Contracting Authority shall participate in coordination meetings and
other  jointly  organised  common  activities,  and  the  Organisation  shall  invite  the  European
Commission to join any donor committee which may be set up in relation to the Action.
2.2
In the performance of the activities and subject to ad-hoc provisions stipulated in the Special
Conditions, if any, the Organisation shall apply its own rules and procedures, which have been
subject to the Ex-ante Pillar-Assessment, as regards:
a)  internal control;
b)  accounting system;
c)  independent external audit;
d)  exclusion from access to funding;
e)  publication of information on recipients;
f)  protection of personal data.
The Organisation may apply its own rules and procedures as regards the award and management
of Grants and/or Procurement Contracts only if  and to the extent  provided for by the Special
Conditions, including any ad hoc measures.
As  regards  the  publication  of  information  on  recipients,  the  Organisation  shall  authorise  the
publication of the website where it publishes the information referred to in Article 3.8 d) on the
European Commission’s website.
2.3
Where  the  Organisation  has  been  fully  or  partially  exempted,  by  the  European  Commission,
from undergoing the Ex-ante Pillar Assessment, it may apply its own rules and procedures in
the areas provided for under Article 2.2, subject to ad-hoc provisions stipulated in the Special
Conditions, if any.
2.4
The Organisation may use any Regulations and Rules which have not been subject to an Ex-ante
Pillar  Assessment  to  the  extent  that  these  Regulations  and  Rules  are  not  in  conflict  with  the
provisions of this Agreement and with the rules and procedures which have been subject to the
Ex-ante Pillar-Assessment.

Contribution Agreement June 2023
Annex II - General Conditions
Page 4

Responsibility
2.5
The  Organisation  shall  be  responsible  for  the  performance  of  the  obligations  under  this
Agreement  with  a  due  degree  of  professional  care  and  diligence,  which  means  that  it  shall
apply  the  same  level  of  duty  and  care  which  it  applies  in  managing  its  own  funds.  The
Organisation shall respect the principles of Sound Financial Management, transparency, non-
discrimination and visibility of the European Union in the implementation of the Action.
2.6
The Organisation shall have full financial responsibility towards the Contracting Authority for
all  funds,  including  those  unduly  paid  to  or  incorrectly  used  by  Contractors  or  Grant
Beneficiaries. The Organisation shall take measures to prevent, detect and correct irregularities
and  fraud  when  implementing  the  Action.  To  this  end,  the  Organisation  shall  carry  out,  in
accordance with the principle of proportionality and its positively assessed Regulations and
Rules,  ex-ante  and/or  ex-post  controls  including,  where  appropriate,  on-the-spot  checks  on
representative and/or risk-based samples of transactions, to ensure that the Action financed by
the EU Contribution is effectively carried out and implemented correctly. The Organisation
shall  inform  the  European  Commission  and  the  Contracting  Authority  of  irregularities  and
fraud detected in the management of the EU Contribution and the measures taken. Where funds
have  been  unduly  paid  to  or  incorrectly  used  by  Contractors  or  Grant  Beneficiaries,  the
Organisation shall take all applicable measures in accordance with its own Regulations and
Rules to recover those funds, including, where appropriate, by bringing legal proceedings and
by  endeavouring  to  assign  claims  against  its  Contractors  or  Grant  Beneficiaries  to  the
Contracting Authority or the European Commission. Where the Organisation has exhausted
such measures and the non-recovery is not the result of error or negligence on the part of the
Organisation, the Contracting Authority will consider the amounts that could not be recovered
from Contractors and/or Grant Beneficiaries as eligible costs.
Other obligations
2.7
The  Organisation  undertakes  to  ensure  that  the  obligations  stated  in  this  Agreement  under
Articles 2.9-Other obligations, 5-Conflict of interests, 7- Visibility, and Article 15-Archiving,
access and financial checks apply, where applicable, to all Contractors and Grant Beneficiaries.
In addition, the Organisation also undertakes to require Contractors and Grant Beneficiaries
to: (i) comply with the relevant national laws and regulations as regards protection of personal
data and (ii) ensure accurate and regular records and accounts.
2.8
The  Organisation  shall  notify  the  Contracting  Authority  and  the  European  Commission
without delay of any substantial change in the rules, procedures and systems applied in the
implementation of the Action. This obligation concerns in particular (i)  substantial changes
affecting the Ex-ante Pillar Assessment undergone by the Organisation or affecting the rules
and  procedures  which  have  been  assessed  by  the  European  Commission for the  purpose  of
granting  an  exemption  from  the  obligation to undergo  an  Ex-ante  Pillar  Assessment,  or (ii)
those  that  may  affect  the  conditions  for  eligibility  provided  for  in  the  applicable  legal
instruments of the EU. The Parties shall use their best efforts to resolve amicably any issues
resulting from such changes. The Contracting Authority reserves the right to adopt or require
additional measures in response to such changes. In the event an agreement on such measures
or  other  solutions  cannot  be  reached  between  the  Parties,  either  Party  may  terminate  the
Agreement in accordance with Article 12.3.

2.9
The  Organisation  shall  promote  the  respect  of  human  rights  and  respect  applicable
environmental  legislation  including  multilateral  environmental  agreements,  as  well  as
internationally agreed core labour standards. The Organisation shall not support activities that
contribute to money laundering, terrorism financing, tax avoidance, tax fraud or tax evasion.

2.10
Where the European Commission is not the Contracting Authority, it shall not be a  party to
this Agreement, with the consequence that rights and obligations are conferred upon it only
Contribution Agreement June 2023
Annex II - General Conditions
Page 5

where  explicitly  stated.  This  is  without  prejudice  to  the  European  Commission's  role  in
promoting a consistent interpretation of the terms of this Agreement.
Article 3: Obligations regarding information and reporting
General issues
3.1
The  Organisation  shall  provide  the  Contracting  Authority  with  full  information  on  the
implementation of the Action. To that end, the Organisation shall include in Annex I a work
plan  at  least  for  the  first  year  of  the  Implementation  Period  (or  the  whole  Implementation
Period where it is less than one (1) year). The Organisation shall submit to the  Contracting
Authority progress report(s) and a final report in accordance with the provisions below. These
reports shall consist of a narrative part and a financial part.
3.2
Every report, whether progress or final, shall provide a complete account of all relevant aspects
of  the  implementation  of  the  Action  for  the  period  covered.  The  report  shall  describe  the
implementation of the Action according to the activities envisaged in Annex I as well as the
degree of progress towards the achievement of its Results (Outputs, Outcomes and if possible,
Impact)  as measured by corresponding Indicators. The report shall be drafted in such a way
as to allow monitoring of the Results, the means envisaged and employed. The level of detail
in any report shall match that of Annexes I and III.
3.3
Where the overall action of the Organisation lasts longer than the Implementation Period of
this Agreement, the Contracting Authority may request – in addition to the final reports to be
submitted pursuant to Article 3.8 - the final reports of the overall action, once available. The
Special Conditions shall lay down the rules concerning any remaining funds.
3.4
Any alternative or additional reporting requirement shall be set out in the Special Conditions.
3.5
The  Contracting  Authority  may  request  additional  information  at  any  time,  providing  the
reasons for that request. Subject to the Organisation’s Regulations and Rules, such information
shall be supplied within thirty (30) Days of receipt of the request. The Organisation may submit
a duly motivated request to extend the 30-Day deadline.
3.6
The Organisation shall notify the Contracting Authority without delay of any circumstances
likely to adversely affect the implementation and management of the Action, or to delay or
jeopardise the performance of the activities.
Content of the reports
3.7
The progress report(s) shall relate directly to this Agreement and shall at least include:
a)
summary and context of the Action;
b)  actual  Results:  an  updated  table  based  on  a  logical  framework  matrix  (as  included  in
Annex I) including reporting of Results achieved by the Action (Outputs, Outcomes, and
if  possible,  Impact)  as  measured  by  their  corresponding  Indicators,  against  agreed
baselines and targets, and relevant data sources;
c)   information on the activities directly related to the Action as described in Annex I and
carried out during the reporting period;
d)   information on the difficulties encountered and measures taken to overcome problems and
eventual changes introduced;
e)   information on measures taken to identify the EU as source of financing, in accordance
with Article 7;
f)   a breakdown of the total costs, following the structure set out in Annex III, incurred from
the  beginning  of  the  Action  as  well  as  the  legal  commitments  entered  into  by  the
Organisation during the reporting period;
Contribution Agreement June 2023
Annex II - General Conditions
Page 6

g)  a  summary  of  controls  carried  out  and  available  final  audit  reports  in  line  with  the
Organisation’s policy on disclosure of such controls and audit reports. Where errors and
weaknesses in systems were identified, an analysis of their nature and extent, as well as
information on corrective measures taken or planned, shall also be provided;
h)   where applicable, a request for payment;
i)
work plan and budget forecast for the next reporting period.
3.8
The final report shall cover the entire Implementation Period and include:
a)   all the information requested in Article 3.7 a) to h);
b)   a summary of the Action's receipts, payments received and of the eligible costs incurred;
c)   where applicable, an overview of any funds unduly paid or incorrectly used which the
Organisation could or could not recover itself;
d)   the exact link to the website referred to in last subparagraph of Article 2.2;
e)   if  relevant,  details  of  transfers  of  equipment,  vehicles  and  remaining  major  supplies
mentioned in Article 8;
f)
where the Action is a Multi-Donor Action and the EU Contribution is not earmarked, a
confirmation  from  the  Organisation  that  an  amount  corresponding  to  that  paid  by  the
Contracting Authority has been used in accordance with the obligations laid down in this
Agreement and that costs that were not eligible for the EU Contribution have been covered
by other donors' contributions;
g)   where applicable, a request for payment.

3.9
The Organisation shall submit a report for every reporting period as specified in the Special
Conditions starting from the commencement of the Implementation Period, unless otherwise
specified in the Special Conditions1. Reporting, narrative as well as financial, shall cover the
whole  Action,  regardless  of  whether  this  Action  is  entirely  or  partly  financed  by  the  EU
Contribution. Unless otherwise specified in the Special Conditions, progress reports shall be
submitted within sixty (60) Days after the period covered by such report and the final report
shall be submitted, at the latest, six (6) months after the end of the Implementation Period.
Management declaration
3.10
Every  progress  and  final  report  shall  be  accompanied  by  a  management  declaration  in
accordance  with  the  template  included  in  Annex  VI,  unless  Article  1.5  of  the  Special
Conditions states that a  global management declaration shall be sent annually to the European
Commission headquarters, separately from the reports provided under this Agreement.
Audit or control opinion for organisations other than International Organisations/Member State
Organisations
3.11
In  case  the  Organisation  is  neither  an  International  Organisation,  nor  a  Member  State
Organisation, the Organisation shall provide an audit or control opinion in accordance with
internationally accepted audit standards, establishing whether the accounts give a true and fair
view,  whether  the  control  systems  in  place  function  properly,  and  whether  the  underlying
transactions are managed in accordance with the provisions of this Agreement. The opinion
shall also state whether the audit work puts in doubt the assertions made in the management
declaration mentioned above.
3.12
Such audit or control opinion shall be provided up to one (1) month following the management
declaration sent with every progress or final report, unless Article 1.5 of the Special Conditions
states that the global management declaration and the global audit or control opinion shall be

1  By default, the reporting period is every twelve (12) months as from the commencement of the Implementation Period.
Contribution Agreement June 2023
Annex II - General Conditions
Page 7

sent annually to the European Commission headquarters separately from the reports provided
under this Agreement.
Currency for reporting
3.13
The reports shall be submitted in the Currency of the Agreement as specified in Article 3 of
the Special Conditions.
3.14
The Organisation shall convert legal commitments, the Action’s receipts and costs incurred in
currencies  other  than  the  accounting  currency  of  the  Organisation  according  to  its  usual
accounting practices.
Failure to comply with reporting obligations
3.15
If  the  Organisation  is  unable  to  present  a  progress  or  final  report,  together  with  the
accompanying documents, by the deadline set out in Article 3.9, the Organisation shall inform
the  Contracting  Authority  in  writing  of  the  reasons.  The  Organisation  shall  also  provide  a
summary of the state of progress of the Action and, where applicable, a provisional work plan
for the next period. If the Organisation fails to comply with this obligation for two (2) months,
following  the  deadline  set  out  in  Article  3.9,  the  Contracting  Authority  may  terminate  the
Agreement in accordance with Article 12, refuse to pay any outstanding amount and recover
any amount unduly paid.
Article 4: Liability towards third parties
4.1
The European Commission shall not, under any circumstances or for any reason whatsoever,
be held liable for damage or injury sustained by the staff or property of the Organisation while
the Action is being carried out, or as a consequence of the Action. The European Commission
shall not therefore accept any claim for compensation or increase in payment in connection
with such damage or injury.
4.2
The European Commission shall not, under any circumstances or for any reason whatsoever,
be  held  liable  towards  third  parties,  including  liability  for  damage  or  injury  of  any  kind
sustained by them in respect of or arising out of the implementation of the Action.
4.3
The Organisation shall discharge the European Commission of all liability associated with any
claim or action brought as a result of an infringement of the Organisation's  Regulations and
Rules committed by the Organisation or Organisation's employees or individuals for whom
those employees are responsible, or as a result of a violation of a third party's rights in the
context of the implementation of the Action.
Article 5: Conflict of interests
5.1
The Organisation shall refrain, in accordance with its Regulations and Rules, from any action
which may give rise to a conflict of interests.
5.2
A conflict of interest shall be deemed to arise where the impartial and objective exercise of the
functions of any person implementing the Agreement is compromised.
Article 6: Confidentiality
6.1
The Contracting Authority and the Organisation shall both preserve the confidentiality of any
document, information or other material directly related to the implementation of the Action
that is communicated as confidential. The confidential nature of a document shall not prevent
it from being communicated to a third party on a confidential basis when the rules binding the
Parties, or the European Commission when it is not the Contracting Authority, so require. In
no case can disclosure put in jeopardy the Parties’ privileges and immunities or the safety and
security of the Parties’ staff, Contractors, Grant Beneficiaries or the Final Beneficiaries of the
Action.
Contribution Agreement June 2023
Annex II - General Conditions
Page 8

6.2
The  Parties  shall  obtain  each  other’s  prior  written  consent  before  publicly  disclosing  such
confidential information unless:
a)  the  communicating  Party  agrees  in  writing  to  release  the  other  Party  from  the  earlier
confidentiality obligations; or
b)  the  confidential  information  becomes  public  through  other  means  than  in  breach  of  the
confidentiality obligation by the Party bound by that obligation; or
c)  the disclosure of confidential information is required by law or by Regulations and Rules
established in accordance with the basic constitutive document of any of the Parties.
6.3
The Parties shall remain bound by confidentiality for five (5) years after the End Date of the
Agreement, or longer as specified by the communicating Party at the time of communication.
6.4
Where the European Commission is not the Contracting Authority, it shall nonetheless have
access to all documents communicated to the Contracting Authority, and shall maintain the
same level of confidentiality.
Article 7: Visibility
Visibility
7.1
Unless the European Commission requests or agrees otherwise, the Organisation shall take all
appropriate measures to publicise the fact that the Action has received funding from the EU.
Such  measures  shall  be  carried  out  in  accordance  with  the  Visibility  Requirements  for  EU
External Action2, as in effect at the time of entry into force of this Agreement or with any other
guidelines agreed between the European Commission and the Organisation.
7.2
If,  during  the  implementation  of  the  Action,  equipment,  vehicles  or  major  supplies  are
purchased  using  the  EU  Contribution,  the  Organisation  shall  display  appropriate
acknowledgement on such vehicles, equipment or major supplies, including the display of the
EU emblem (twelve yellow stars on a blue background). Where such display could jeopardise
the Organisation’s privileges and immunities or the safety of the Organisation’s staff or of the
Final Beneficiaries, the Organisation shall propose appropriate alternative arrangements. The
acknowledgement and the EU emblem shall be of such a size and prominence as to be clearly
visible in a manner that shall not create any confusion regarding the identification of the Action
as  an  activity  of  the  Organisation,  nor  the  ownership  of  the  equipment,  vehicles  or  major
supplies by the Organisation.
7.3
If, pursuant to Article 8.5, the equipment, vehicles or remaining major supplies purchased with
the EU Contribution have not been transferred to the local authorities, local Grant Beneficiaries
or Final Beneficiaries when submitting the final report, the visibility requirements as regards
this  equipment,  vehicles  or  major  supplies  (in  particular  display  of  the  EU  emblem)  shall
continue to apply between submission of the final report and the end of the overall action, if
the latter is longer. Where the Organisation retains ownership in accordance with Article 8.6,
the visibility requirements shall continue to apply as long as the relevant equipment, vehicles
or remaining major supplies are used by the Organisation.
7.4
Unless  otherwise  provided  in  the  Special  Conditions,  if  disclosure  risks  threatening  the
Organisation’s safety or harming its interests, the European Commission and the Contracting
Authority  (if  other  than  the  European  Commission) may  publish  in  any  form  and  medium,
including on its websites, the name and address of the Organisation, the purpose and amount
of the EU Contribution.
7.5
The Organisation shall ensure that reports, publications, press releases and updates relevant to
the  Action  are  communicated  to  the  addresses  stated  in  the  Special  Conditions  upon  their
issuance.

2  Visibility in EU-financed external actions – Requirements for implementing partners (Projects), available at:
https://ec.europa.eu/intpa/comm-visibility-requirements_en.
Contribution Agreement June 2023
Annex II - General Conditions
Page 9

7.6
The Parties will consult immediately and endeavour to remedy any detected shortcomings in
implementing the visibility requirements set out in this Article. This is without prejudice to
measures the Contracting Authority may take in case of substantial breach of an obligation.
Communication
7.7
In  addition  to  the  obligations  stipulated  under  Article  7.1  to  7.6,  the  Organisation  shall
implement, if applicable, communication activities as described in Annex I.
Article 8: Right to use results and transfer of equipment
Right to use
8.1
Ownership of the results of the Action shall not vest in the Contracting Authority. Subject to
Article 6, the Organisation shall grant, and shall act to ensure that any third party concerned
grants  the  Contracting  Authority  (and  the  European  Commission  where  it  is  not  the
Contracting Authority) the right to use free of charge the results of the Action, including the
reports  and  other  documents  relating  to  it,  which  are  subject  to  industrial  or  intellectual
property rights.
8.2
Where the results  mentioned  in Article  8.1 include pre-existing rights and  the Organisation
cannot warrant the Contracting Authority (and the European Commission where it is not the
Contracting Authority) the right to use such results, the Organisation shall inform in writing
the  Contracting  Authority  (and  the  European  Commission,  where  it  is  not  the  Contracting
Authority) accordingly.
Transfer
8.3
The equipment, vehicles and remaining major supplies purchased with the EU Contribution
shall  be  transferred  to  or  remain  with  local  authorities,  local  Grant  Beneficiaries  or  Final
Beneficiaries, at the latest when submitting the final report.
8.4
The documentary proof of those transfers shall not be presented with the final reports, but shall
be kept for verification for the duration and along with the documents mentioned in Article
15.1.
8.5
By way of derogation from Article 8.3, the equipment, vehicles and remaining major supplies
purchased with the EU Contribution in the framework of actions which continue after the end
of  the  Implementation  Period  may  be  transferred  at  the  end  of  the  overall  action.  The
Organisation shall use the equipment, vehicles and remaining major supplies for the benefit of
the Final Beneficiaries. The Organisation shall inform the Contracting Authority on the end
use of the equipment, vehicles and remaining major supplies in the final report.
8.6
In the event that there are no local authorities, local Grant Beneficiaries or Final Beneficiaries
to  whom  the  equipment,  vehicles  and  remaining  major  supplies  could  be  transferred,  the
Organisation may transfer them to another action funded by the EU or - exceptionally - retain
ownership of the equipment, vehicles and remaining major supplies at the end of the Action or
the overall action. In such cases, it shall submit a justified written request with an inventory
listing of the items concerned and a proposal concerning their use in due course and - at the
latest – together with the submission of the final report. In no event may the end use jeopardize
the sustainability of the Action.
Article 9: Monitoring and evaluation of the Action
9.1
Keeping in mind the commitment of the Parties to the effective and efficient operation of the
Agreement, the Organisation shall invite representatives of the  European Commission and the
Contracting  Authority  (if  other  than  the  European  Commission)  to  participate  at  their  own
costs to the main monitoring missions and evaluation exercises related to the performance of
the Action. Participation in evaluation exercises should be ensured by requesting comments
Contribution Agreement June 2023
Annex II - General Conditions
Page 10

from the European Commission and the Contracting Authority on the terms of reference before
the exercise takes place, and on the different deliverables related to an evaluation exercise prior
to  their final  approval  (as  a  minimum,  on  the  final  report). The  Organisation  shall  send  all
monitoring and evaluation reports relating to the Action to the European Commission and the
Contracting Authority once issued, subject to confidentiality.
9.2
Article 9.1 is without prejudice to any monitoring mission or evaluation exercise, which the
European Commission as a donor, or the Contracting Authority, at their own costs, may wish
to  perform.  Monitoring  and  evaluation  missions  by  representatives  of  the  European
Commission  or  the  Contracting  Authority  shall  be  planned  ahead  and  completed  in  a
collaborative manner between the staff of the Organisation and the European Commission's
(or Contracting Authority’s) representatives, keeping in mind the commitment of the Parties
to the effective and efficient operation of the Agreement. The European Commission (or the
Contracting Authority) and the Organisation shall agree on procedural matters in advance. The
European Commission (or the Contracting Authority) shall make available to the Organisation
the terms of reference of the evaluation exercise before it takes place, as well as the different
deliverables (as a minimum, the draft final report) for comments prior to final issuance. The
European  Commission  (or  the  Contracting  Authority)  shall  send  the  final  monitoring  and
evaluation report to the Organisation once issued.
9.3
In line with the spirit of partnership, the Organisation and the European Commission (and the
Contracting Authority, if applicable), may also carry out joint monitoring and/or evaluation.
Such arrangements will be discussed and agreed in due time, planned ahead and completed in
a collaborative manner.
9.4
Representatives  of  the  relevant  partner  country  may,  whenever  possible,  be  invited  to
participate at their own costs in the main monitoring missions and evaluation exercises, unless
such participation would be detrimental to the objectives of the Action or threaten the safety
or harm the interests of Partners, Grant Beneficiaries or Final Beneficiaries.
Article 10: Amendment to the Agreement
10.1
Without prejudice to Articles 10.3 to 10.6, any amendment to this Agreement, including its
annexes, shall be set out in writing in an addendum signed by both Parties. This Agreement
can only be amended before the End Date.
10.2
The requesting Party shall request in writing any amendment at least thirty (30) Days before
the amendment is intended to enter into force and no later than thirty (30) Days before the End
Date, unless there are special circumstances, duly demonstrated by it, and accepted by the other
Party. The other Party shall notify its decision regarding the amendment proposed in due time
and in any case no later than thirty (30) Days after the date when the amendment request was
received.
10.3
By way of derogation from Articles 10.1 and 10.2, where an amendment to Annex I and/or
Annex III does not affect the main purpose of the Action and the financial impact is limited to
a transfer within a single budget heading, including cancellation or introduction of an item, or
a transfer between budget headings involving a variation (as the case may be in cumulative
terms) of 25 % or less of the amount originally entered (or as amended by a written addendum)
in relation to each concerned heading, the Organisation may unilaterally amend Annex I and/or
Annex III and shall inform the Contracting Authority accordingly in writing, at the latest in
the next report.
10.4
The method described in Article 10.3 shall be used neither to amend the contingency reserve
referred to under Article 16.2, the rate for remuneration, nor the agreed methodology or fixed
amounts/rates of simplified cost options.
10.5
The  Organisation  may,  in  agreement  with  the  Contracting  Authority  and  before  the
modification takes place, change the following without a formal addendum to the Agreement:
Contribution Agreement June 2023
Annex II - General Conditions
Page 11

(a)  Outputs,  the  Indicators  and  their  related  targets,  baselines  and  sources  of  verification
described  in  Annex  I  and  in  the  logical  framework  if  the  change  does  not  affect  the  main
outcome of the Action;
(b) Communication activities described in Annex I.
Approved changes must be explained in the next report.
10.6
Changes  of  address  and  of  bank  account  shall  be  notified  in  writing  to  the  Contracting
Authority.  Where  applicable,  changes  of  bank  account  must  be  specified  in  the  request  for
payment, using the financial identification form attached as Annex IV.
Article 11: Suspension
Suspension of the time limit for payment
11.1
The Contracting Authority may suspend the time limit for payment following a single payment
request by notifying the Organisation that either:
a)  the amount is not due; or
b)  the appropriate supporting documents have not been provided and therefore the Contracting
Authority  needs  to  request  clarifications,  modifications  or  additional  information  to  the
narrative or financial reports. Such clarifications or additional information may notably be
requested  by  the  Contracting  Authority  if  it  has  doubts  about  compliance  by  the
Organisation with its obligations in the implementation of the Action; or
c)  credible information has come to the notice of the Contracting Authority that puts in doubt
the eligibility of the reported expenditure; or
d)  credible information has come to the notice of the Contracting Authority that indicates a
significant deficiency in the functioning of the Internal Control System of the Organisation
or that the expenditure reported by the Organisation is linked to a serious irregularity and
has not been corrected. In this case, the Contracting Authority may suspend the payment
deadline if it is necessary to prevent significant damage to the EU's financial interests.
11.2
In the situations listed in Article 11.1, the Contracting Authority shall notify the Organisation
as soon as possible, and in any case within thirty (30) Days from the date on which the payment
request was received, of the reasons for the suspension, specifying - where applicable - the
additional information required. Suspension shall take effect on the date when the Contracting
Authority sends the notification stating the reasons for the suspension. The remaining payment
period  shall  start  to  run again  from  the  date  on  which  the requested  information  or  revised
documents  are  received  or  the  necessary  further  checks  are  carried  out.  If  the  requested
information or documents are not provided within the deadline fixed in the notification or are
incomplete, payment may be made on the basis of the partial information available.
Suspension of the Agreement by the Contracting Authority
11.3
The Contracting Authority may suspend the implementation of the Agreement, fully or partly,
if:
a)  the  Contracting  Authority  has  proof  that  irregularities,  fraud  or  breach  of  substantial
obligations have been committed by the Organisation in the procedure of its selection, in
its Ex-ante Pillar Assessment or in the implementation of the Action;
b)  the Contracting Authority has proof that irregularities, fraud or breach of obligations have
occurred  which  call  into  question  the  reliability  or  effectiveness  of  the  Organisation's
Internal Control System or the legality and regularity of the underlying transactions;
c)  the  Contracting  Authority  has  proof  that  the  Organisation  has  committed  irregularities,
fraud or breaches of obligations under other agreements funded by EU funds provided that
Contribution Agreement June 2023
Annex II - General Conditions
Page 12

those  irregularities,  fraud  or  breaches  of  obligations  have  a  material  impact  on  this
Agreement.
11.4
Before  suspension,  the  Contracting  Authority  shall  formally  notify  the  Organisation  of  its
intention to suspend, inviting the Organisation to make observations within ten (10) Days from
the receipt of the notification. If the Organisation does not submit observations, or if - after
examination  of  the  observations  submitted  by  the  Organisation  -  the  Contracting  Authority
decides  to  pursue  the  suspension,  the  Contracting  Authority  may  suspend  all  or  part  of  the
implementation of this Agreement serving seven (7) Days' prior notice. In case of suspension
of part of the implementation of the Agreement, upon request of the Organisation, the Parties
shall enter into discussions in order to find the arrangements necessary to continue the part of
the  implementation  that  is  not  suspended.  Any  expenditures  or  costs  incurred  by  the
Organisation during the suspension and related to the part of the Agreement suspended shall
not be reimbursed, nor be covered by the Contracting Authority. Following suspension of the
implementation of the Agreement, the Contracting Authority may terminate the Agreement in
accordance  with  Article  12.2,  recover  amounts  unduly  paid  and/or,  in  agreement  with  the
Organisation,  resume  implementation  of  the  Agreement.  In  the  latter  case,  the  Parties  will
amend the Agreement where necessary.
Suspension for exceptional circumstances
11.5
The  Organisation  may  decide  to  suspend  the implementation  of  all  or  part  of  the  Action  if
exceptional and unforeseen circumstances beyond the control of the Organisation make such
implementation impossible  or  excessively  difficult,  such  as in cases  of  Force Majeure. The
Organisation shall inform the Contracting Authority immediately and provide all the necessary
details, including the measures taken to minimise any possible damage, and the foreseeable
effect and date of resumption.
11.6
The  Contracting  Authority  may  also  notify  the  Organisation  of  the  suspension  of  the
implementation of the Agreement if exceptional circumstances so require, in particular:
a)  when a relevant EU Decision identifying a violation of human rights has been adopted; or
b)  in cases such as crisis entailing a change of EU policy.
11.7
Neither of the Parties shall be held liable for breach of its obligations under the Agreement if
Force Majeure or exceptional circumstances as set forth under Articles 11.5 and 11.6 prevent
it from fulfilling said obligations, and provided it takes any measures to minimise any possible
damage.
11.8
In the situations listed in Articles 11.5 and 11.6, the Parties shall minimise the duration of the
suspension and shall resume implementation once the conditions allow. During the suspension
period, the Organisation shall be entitled to the reimbursement of the minimum costs, including
new  legal  commitments,  necessary  for  a  possible  resumption  of  the  implementation  of  the
Agreement or of the Action. The Parties shall agree on such costs, including the reimbursement
of legal commitments entered into for implementing the Action before the notification of the
suspension  was  received  which  the  Organisation  cannot  reasonably  suspend,  reallocate  or
terminate on legal grounds. This is without prejudice to any amendments to the  Agreement
that may be necessary to adapt the Action to the new implementing conditions, including, if
possible, the extension of the Implementation Period or to the termination of the Agreement in
accordance with Article 12.3. In case of suspension due to Force Majeure or if the Action is a
Multi-Donor Action, the Implementation Period is automatically extended by an amount of
time equivalent to the duration of the suspension.
Article 12: Termination
12.1
Without prejudice to any other provision of these General Conditions or penalties foreseen in
the  EU  Financial  Regulation,  where  applicable,  and  with  due  regard  to  the  principle  of
proportionality, the Contracting Authority may terminate the Agreement if the Organisation:
Contribution Agreement June 2023
Annex II - General Conditions
Page 13

a)  fails to fulfil a substantial obligation incumbent on it under the terms of the Agreement;
b)  is guilty of misrepresentation or submits false or incomplete statements to obtain the EU
Contribution  or  provides  reports  that  do  not  reflect  reality  to  obtain  or  keep  the  EU
Contribution without cause;
c)  is bankrupt or being wound up, or is subject to any other similar proceedings;
d)   is guilty of Grave Professional Misconduct proven by any justified means;
e)  has committed fraud, corruption or any other illegal activity to the detriment of the EU's
financial interests on the basis of proof in the possession of the Contracting Authority;
f)  fails to comply with the reporting obligations in accordance with Article 3.15;
g)  has  committed  any  of  the  failings  described  in  Article  11.3  on  the  basis  of  proof  in  the
possession of the Contracting Authority.
12.2
Before terminating the Agreement in accordance with Article 12.1, the Contracting Authority
shall formally notify the Organisation of its intention to terminate, inviting the Organisation to
make observations (including proposals for remedial measures) within thirty (30) Days from
the receipt of the notification. During this period, and until the termination takes effect, the
Contracting Authority may suspend the time limit for any payment in accordance with Article
11.2  as  a  precautionary  measure  informing  the  Organisation  immediately  in  writing.  If  the
Organisation  does  not  submit  observations,  or  if,  after  examination  of  the  observations
submitted by the Organisation, the Contracting Authority decides to pursue the termination,
the Contracting Authority may terminate the Agreement serving seven (7) Days' prior notice.
During  that  period,  the  Organisation  may  refer  the  matter to the responsible  director  in  the
European  Commission.  Where  the  Contracting  Authority  is  the  European  Commission,  the
termination  will  take  effect  if  and  when  confirmed  by  the  director.  Where  the  Contracting
Authority  is  not  the  European  Commission,  the  referral  to  the  responsible  director  in  the
European  Commission  will  not  suspend  the  effects  of  the  decision  of  the  Contracting
Authority. In case of termination, the Contracting Authority may demand full repayment of
any amounts paid in excess of the final amount determined in accordance with Article 18 after
allowing the Organisation to submit its observations. Neither Party shall be entitled to claim
indemnity by the other Party on account of the termination of this Agreement.
12.3
If,  at  any  time,  either  Party  believes  that  the  purpose  of  the  Agreement  can  no  longer  be
effectively or appropriately performed, it shall consult the other Party. Failing agreement on a
solution, either Party may terminate the Agreement by serving sixty (60) Days written notice.
In this case, the final amount shall cover:
a)  payment only for the part of the Action carried out up to the date of termination;
b)  in the situations described in Articles 11.5 and 11.6, the unavoidable residual expenditures
incurred during the notice period; and,
c)  in the situations described in Articles 11.5 and 11.6, reimbursement of legal commitments
the Organisation entered into for implementing the Action before the written notice on
termination was received by it and which the Organisation cannot reasonably terminate
on legal grounds.
The Contracting Authority shall recover the remaining part in accordance with Article 14.
12.4
In the event of termination, a final report and a request  for payment of the balance shall be
submitted in accordance with Articles 3 and 17. The Contracting Authority shall not reimburse
or cover any expenditure or costs which are not included or justified in a report approved by
it.
Article 13: Applicable law and settlement of disputes
13.1
The  Parties  shall  endeavour  to  settle  amicably  any  disputes  or  complaints  relating  to  the
interpretation, application or validity of the Agreement, including its existence or termination.
Contribution Agreement June 2023
Annex II - General Conditions
Page 14

13.2
Where the Organisation is not an International Organisation, and the European Commission is
the  Contracting  Authority,  this  Agreement  is  governed  by  EU  law,  complemented  -  if
necessary - by the relevant provisions of Belgian law. In the absence of an amicable settlement
in accordance with Article 13.1 above, the General Court, or on appeal the Court of Justice of
the European Union, has sole jurisdiction. Such actions must be brought under Article 272 of
the  Treaty  on  the  Functioning  of  the  EU  (TFEU).  Notwithstanding  the  foregoing  sentence,
where the Organisation is not established or incorporated in the EU, any of the Parties may
bring  before  the  Brussels  courts  any  dispute  between  them  concerning  the  interpretation,
application or validity of the Agreement, if such dispute cannot be settled amicably. Where
one party has brought proceedings before the Brussels courts, the other party may not bring a
claim  arising  from  the  interpretation,  application  or  validity  of  the  Agreement  in  any  other
court than the Brussels courts before which the proceedings have already been brought.
13.3
Where the Organisation is not an International Organisation and the European Commission is
not the Contracting Authority, the Agreement shall be governed by the law of the country of
the Contracting Authority and the courts of the country of the Contracting Authority shall have
exclusive jurisdiction, unless otherwise agreed by the Parties. The dispute may, by common
agreement  of  the  Parties,  be  submitted  for  conciliation  to  the  European  Commission.  If  no
settlement  is  reached  within  one  hundred  and  twenty  (120)  Days  of  the  opening  of  the
conciliation procedure, each Party may notify the other that it considers the procedure to have
failed and may submit the dispute to the courts of the country of the Contracting Authority.
13.4
Where the Organisation is an International Organisation:
a)  nothing in the Agreement shall be interpreted as a waiver of any privileges or immunities
accorded to any Party by its constituent documents, privileges and immunities agreements
or international law;
b)  in  the  absence  of  an  amicable  settlement  pursuant  to  Article  13.1  above,  any  dispute,
controversy  or  claim  arising  out  of  or  in  relation  to  this  Agreement,  or  the  existence,
interpretation, application, breach, termination, or invalidity thereof, shall be settled by
final and binding arbitration in accordance with the 2012 Permanent Court of Arbitration
Rules for Arbitration, as in effect on the date of entry into force of this Agreement. The
appointing authority shall be the Secretary General of the Permanent Court of Arbitration.
The arbitration proceedings must take place in  the Hague and the language used in the
arbitral  proceedings  will  be  English.  The  arbitrator’s  decision  shall  be  binding  on  all
Parties and there shall be no appeal.
Article 14: Recovery
14.1
Where an amount is to be recovered under the terms of the Agreement, the Organisation shall
repay the amount due to the Contracting Authority.
14.2
Before  recovery,  the  Contracting  Authority  shall  formally  notify  the  Organisation  of  its
intention to recover any undue amount, specifying the amount and the reasons for recovery
and inviting the Organisation to make any observations within 30 Days from the date of receipt
of the notification. If, after examination of the observations submitted by the Organisation or
if  the  Organisation  does  not  submit  any  observations,  the  Contracting  Authority  decides  to
pursue  the  recovery  procedure,  it  may  confirm  recovery  by  formally  notifying  the
Organisation.  If  there  is  a  disagreement  between  the  Organisation  and  the  Contracting
Authority on the amount to be repaid, the Organisation may refer the matter to the responsible
director in the European Commission within thirty (30) Days. Where the Contracting Authority
is the European Commission, a debit note specifying the terms and the date for payment may
be issued after the deadline for the referral to the director. Where the Contracting Authority is
not  the  European  Commission,  the  referral  to  the  responsible  director  in  the  European
Commission will not prevent the Contracting Authority from issuing the debit note.
14.3
If  the  Organisation  does  not  make  the  payment  by  the  date  specified  in  the  debit  note,  the
Contracting Authority shall recover the amount due:
Contribution Agreement June 2023
Annex II - General Conditions
Page 15

a)  by offsetting it against any amounts owed to the Organisation by the EU;
b)  by taking legal action pursuant to Article 13;
c)  in  exceptional  circumstances  justified  by  the  necessity  to  safeguard  the  financial
interests  of  the  EU,  the  Contracting  Authority  may,  when  it  has  justified  grounds  to
believe  that  the  amount  due  would  be  lost,  recover  by  offsetting  before  the  deadline
specified in the debit note without the Organisation’s prior consent.
14.4
If the Organisation fails to repay by the due date, the amount due shall be increased by late
payment interest calculated at the rate indicated in Article 17.7(a). The interest shall be payable
for the period elapsing from the day after the expiration of the time limit for payment up to
and including the date when the Contracting Authority actually receives payment in full of the
outstanding amount. Any partial payment shall first cover the interest.
14.5
Where  the  European  Commission  is  not  the  Contracting  Authority,  it  may,  if  necessary,
proceed itself to the recovery.
14.6
The European Commission may waive the recovery in accordance with the principle of Sound
Financial  Management  and  proportionality  or  it  shall  cancel  the  amount  in  the  event  of  a
mistake.
Article 15: Archiving, access and financial checks
15.1
For  a  period  of  five  (5)  years from  the  End  Date  and  in any  case  until any  on-going  audit,
verification, appeal, litigation or pursuit of claim or investigation by the European Anti-Fraud
Office (OLAF), if notified to the Organisation, has been disposed of, the Organisation shall
keep and make available according to Article 15 all relevant financial information (originals
or copies) related to the Agreement and to any Procurement Contracts and Grant agreements
financed by the EU Contribution.
15.2
The Organisation shall allow the European Commission, or any authorised representatives, to
conduct desk reviews and on-the-spot checks on the use made of the EU Contribution on the
basis of supporting accounting documents and any other document related to the financing of
the Action.
15.3
The Organisation agrees that OLAF may carry out investigations, including on-the-spot checks
and inspections, in accordance with the provisions laid down by EU law for the protection of
the financial interests of the EU against fraud, corruption and any other illegal activity.
15.4
The Organisation agrees that the execution of this Agreement may be subject to scrutiny by
the  Court  of  Auditors  when  the  Court  of  Auditors  audits  the  European  Commission’s
implementation of EU expenditure. In such case the Organisation shall provide to the Court of
Auditors access to the information that is required for the Court to perform its duties.
15.5
To  that  end, the  Organisation  undertakes to  provide  officials  of the  European  Commission,
OLAF  and  the  European  Court  of  Auditors  and  their  authorised  agents,  upon  request,
information and access to any documents and computerised data concerning the technical and
financial  management  of  operations  financed  under  the  Agreement,  as  well  as  grant  them
access to sites and premises at which such operations are carried out. The Organisation shall
take all necessary measures to facilitate these checks in accordance with its Regulations and
Rules. The documents and computerised data may include information that the Organisation
considers  confidential  in  accordance  with  its  own  established  Regulations  and  Rules  or  as
governed  by  contractual  agreement. Such  information  once  provided  to  the  European
Commission, OLAF, the European Court of Auditors, or any other authorised representatives,
shall  be  treated  in  accordance  with  EU  confidentiality  rules  and  legislation  and  Article  6.
Documents must be accessible and filed in a manner permitting checks, the Organisation being
bound to inform the European Commission, OLAF or the European Court of Auditors of the
exact location at which they are kept. Where appropriate, the Parties may agree to send copies
of such documents for a desk review.
Contribution Agreement June 2023
Annex II - General Conditions
Page 16

15.6
Where  applicable,  the  desk  reviews,  investigations,  on-the-spot  checks  and  inspections
referred  to  in  Article  15.2  to  15.5  shall  refer  to  a  verification  that  shall  be  performed  in
accordance with the verification clauses agreed between the Organisation and the European
Commission. This is without prejudice to any cooperation  arrangement between OLAF and
the Organisation’s anti-fraud bodies.
15.7
The European Commission shall inform the Organisation of the planned on-the-spot missions
by  agents  appointed  by  the  European  Commission  in  due  time  in  order  to  ensure  adequate
procedural matters are agreed upon in advance.
15.8
Failure to comply with the obligations set forth in Article 15 constitutes a case of breach of a
substantial obligation under this Agreement.
Article 16: Eligibility of costs
16.1
Direct costs are eligible for EU financing if they meet all the following criteria:
a)
they are necessary for carrying out the Action, directly attributable to it, arising as a
direct consequence of its implementation and charged in proportion to the actual use;
b)
they are incurred in accordance with the provisions of this Agreement;
c)
they  are  actually  incurred  by  the  Organisation,  i.e.  they  represent  real  expenditure
definitely and genuinely borne by the Organisation, without prejudice to Article 16.6;
d)
they  are  reasonable,  justified,  comply  with  the  principle  of  Sound  Financial
Management and are in line with the usual practices of the Organisation regardless of
their source of funding;
e)
they are incurred during the Implementation Period with the exception of costs related
to final report, final evaluation, audit and other costs linked to the closure of the Action
which may be incurred after the Implementation Period;
f)
they  are  identifiable  and  backed  by  supporting  documents,  in  particular  determined
and recorded in accordance with the accounting practices of the Organisation;
g)
they are covered by one of the sub-headings indicated in the estimated budget in Annex
III and by the activities described in Annex I; and
h)
they  comply  with  the  applicable  tax  and  social  legislation  taking  into  account  the
Organisation's privileges and immunities.

16.2
A reserve for contingencies and/or possible fluctuations in exchange rates - not exceeding 5 %
of the direct eligible costs - may be included in Annex III to allow for adjustments necessary
in the event of unforeseeable changes of circumstances on the ground. In such case, the reserve
can be used only with the prior written authorisation of the Contracting Authority, upon a duly
justified request from the Organisation.
16.3
The following costs may not be considered eligible direct costs, but may be charged as part of
the  remuneration:  all  eligible  costs  that,  while  necessary  and  arising  as  a  consequence  of
implementation, are supporting the implementation of the Action and not considered part of
the activities that the European Union finances as described in Annex I, including corporate
management costs or other costs linked to the normal functioning of the Organisation, such as
horizontal  and  support  staff,  office  or  equipment  costs  (except  when  duly  justified  and
described in Annex I, such as a project office).
16.4
The remuneration shall be declared on the basis of a flat-rate which shall not exceed 7% of the
total  eligible  direct  costs  to  be  reimbursed  by  the  Contracting  Authority.  The  remuneration
does  not  need  to  be  supported  by  accounting  documents.  For  Multi-Donor  and  comparable
actions,  the  remuneration  shall  not  be  higher  than  that  charged  by  the  Organisation  to
comparable contributions.
Contribution Agreement June 2023
Annex II - General Conditions
Page 17

16.5
The following costs are ineligible for EU financing:
a)  bonuses, provisions, reserves or non-remuneration related costs. Employers' contributions to
pension or to any other employee insurance funds run by the Organisation shall only be
eligible to the extent they do not exceed the cost incurred during the reporting period,
calculated following applicable international accounting standards;
b)  full-purchase cost of equipment and assets unless the asset or equipment is specifically
purchased for the Action and ownership is transferred in accordance with Article 8;
c)  duties, taxes and charges, including VAT, that are recoverable/deductible by the
Organisation;
d)  return of capital;
e)  negative remuneration (otherwise referred to as ‘negative interest’) charged by banks or other
financial institutions;
f)  debts and debt service charges;
g)  provision for losses, debts or potential future liabilities;
h)  banking charges for the transfers from and to the Contracting Authority3;
i)  costs incurred during the suspension of the implementation of the Agreement except the
minimum costs agreed on in accordance with Article 11.8;
j)  costs declared by the Organisation under another agreement financed by the European Union
budget (including through the European Development Fund);
k)  in-kind contributions. The cost of staff assigned to the Action and actually incurred by the
Organisation is not an in-kind contribution and may be declared as a direct eligible cost if it
complies with the conditions set out in Article 16.1; and
l)  costs of purchase of land or buildings, unless otherwise provided in the Special Conditions.
Simplified cost options

16.6
Direct eligible costs may also be declared by using any or a combination of unit costs, lump
sums and flat-rate financing.
16.7
The methods used by the Organisation to determine unit costs, lump sums or flat-rates shall
comply with the principles provided in Articles 16.1, 16.3 and 16.5, be clearly described and
substantiated in Annex III, shall avoid double funding of costs and shall respect the principle
of Sound Financial Management. These methods shall be based on the Organisation's historical
or actual accounting data, its usual accounting practices, an expert judgment or on statistical
or other objective information where available and appropriate.
16.8
Costs  declared  under  simplified  cost  options  do  not  need  to  be  backed  by  accounting  or
supporting  documents  except  if  they  are  necessary  to  demonstrate  that  the  costs  have  been
declared according to the declared method or cost accounting practices and that the qualitative
and quantitative conditions defined in Annex I and III have been respected.

3 The party causing a repetition of a transfer bears all costs of the repeated transfer.
Contribution Agreement June 2023
Annex II - General Conditions
Page 18

16.9
Simplified cost options not linked to the achievement of concrete Results shall only be eligible
if they have been ex ante-assessed by the European Commission.
16.10  If a verification reveals that the methods used by the Organisation to determine unit costs, lump
sums  or  flat-rates  are  not  compliant  with  the  conditions  established  in  this  Agreement,  the
Contracting Authority shall be entitled to recover proportionately up to the amount of the unit
costs, lump sums or flat-rate financing.
Article 17: Payments
17.1
Payment procedures shall be as follows:
a)  the Contracting Authority shall provide a first pre-financing instalment as set out in Article
4.1 of the Special Conditions within thirty (30) Days of receiving the Agreement signed by
both Parties;
b)  the Organisation may submit a request for further pre-financing instalment for the following
reporting  period  in  accordance  with  Article  4  of  the  Special  Conditions;  the  following
provisions apply:
i)   the reporting period is intended as a twelve-month period, unless otherwise provided
for in the Special Conditions. When the remaining period to the end of the Action is
up to eighteen (18) months, the reporting period shall cover it entirely;
ii)   if at the end of the reporting period less than 70% of the last payment (and 100% of
previous payments, if any) has been paid by the Organisation to its staff or otherwise
subject to a legal commitment with a third party, the further pre-financing payment
shall be reduced by the amount corresponding to the difference between the 70 % of
the immediately preceding pre-financing payment (and 100% of previous payments, if
any) and the part of the previous pre-financing payments which has been paid by the
Organisation to its staff or has been subject to a legal commitment with a third party;
iii)   the Organisation may submit a request for further pre-financing payment before the
end  of  the  reporting  period,  once  more  than  70 %  of  the  immediately  preceding
payment (and 100% of previous payments, if any) has been paid by the Organisation
to its staff or otherwise subject to a legal commitment with a third party. In this case,
the following reporting period starts anew from the end date of the period covered by
this payment request;
c)  at the end of the Implementation Period, the Organisation shall submit a payment request
for the balance, where applicable, together with the final report. The amount of the balance
shall  be  determined  according  to  Article  18  and  following  approval  of  the  request  for
payment of the balance and of the final report; and
d)  the Contracting Authority shall pay the further pre-financing instalments and the balance
within ninety (90) Days of receiving a payment request accompanied by a progress or final
report, unless the time limit for payment was suspended according to Article 11 or 12.
17.2
Payment  requests  shall  be  accompanied  by  narrative  and  financial  reports  presented  in
accordance  with  Article 3.  The requests for  pre-financing  payments  and  the  request  for the
balance  shall  be  drafted  in  the  Currency  of  the  Agreement  as  specified  in  the  Special
Conditions.  Except for  the  first  pre-financing  instalment, the  payments  shall  be made  upon
approval of the payment request accompanied by a progress or final report. The final amount
shall  be  established  in  line  with  Article  18.  If  the  balance  is  negative,  the  payment  of  the
balance takes the form of recovery.
17.3
Approval  of  the  requests  for  payment  and  of  the  accompanying  reports  shall  not  imply
recognition  of  the  regularity  or  of  the  authenticity,  completeness  and  correctness  of  the
declarations and information contained therein.
Contribution Agreement June 2023
Annex II - General Conditions
Page 19

17.4
The Contracting Authority shall make payments in the Currency of the Agreement as specified
in the Special Conditions to the bank account referred to in the financial identification form in
Annex IV.
17.5
Payment arrangements for financing not linked to costs in accordance with Article 19 shall be
set out in Article 4 of the Special Conditions and Annex I.
17.6
If no payment has been made by the Contracting Authority within two (2) years of the entry
into force of the Agreement, the Agreement shall be terminated.
Late payment interest
17.7
In  case  of  late  payment  of  the  amounts  stated  in  Article  4  of  the  Special  Conditions  the
following conditions apply:
a)  upon expiry of the time limits for payments specified in Article 17.1, if the Organisation
is not a Member State Organisation, it shall receive interest on late payment based on the
rate applied by the European Central Bank for its main refinancing operations in Euros
(Reference Rate), increased by three and a half percentage points. The  Reference Rate
shall be the rate in force on the first day of the month in which the time limit for payment
expires, as published in the C series of the Official Journal of the EU;
b)  the suspension of the time limit for payment by the Contracting Authority in accordance
with Article 11 or 12 shall not be considered as late payment;
c)  interest on late payment shall cover the period running from the day following the due
date for payment, up to and including the date of actual payment as established in Article
17.1. Any partial payment shall first cover the interest;
d)  by  way  of  exception  to  point  (c),  when  the  interest  calculated  in  accordance  with  this
provision is lower than or equal to EUR 200, the Contracting Authority shall pay such
interest to the Organisation only upon request from the Organisation submitted within two
(2) months of it receiving late payment;
e)  by  way  of  exception  to  point  (c),  when  the  Contracting  Authority  is  not  the  European
Commission,  and  the  European  Commission  does  not  make  the  payments,  the
Organisation shall be entitled to late payment interest upon its request submitted within
two (2) months of it receiving late payment.
Article 18: Final amount of the EU Contribution
18.1
The  Contracting  Authority  shall  determine  the  final  amount  of  the  EU  Contribution  when
approving the Organisation’s final report. The Contracting Authority shall then determine the
balance:
a)  to be paid to the Organisation in accordance with Article 17 where the final amount of the
EU Contribution is higher than the total amount already paid to the Organisation; or
b)  to  be  recovered  from  the  Organisation  in  accordance  with  Article  14  where  the  final
amount  of  the  EU  Contribution  is  lower  than  the  total  amount  already  paid  to  the
Organisation.
18.2
The final amount shall be the lower of the following amounts:
a)   the maximum EU Contribution referred to in Article 3.1 of the Special Conditions in terms
of absolute value;
b)   the amount obtained after reduction of the EU Contribution in accordance with Article
18.3.
18.3
Where the Action (i) is not implemented, (ii) is not implemented in line with the Agreement
or  (iii)  is  implemented  partially  or  late,  the  Contracting  Authority  may,  after  allowing  the
Organisation  to  submit  its  observations,  reduce  the  EU  Contribution  in  proportion  to  the
Contribution Agreement June 2023
Annex II - General Conditions
Page 20

seriousness  of  the  above  mentioned  situations.  If  there  is  a  disagreement  between  the
Organisation and the Contracting Authority on the reduction, the Organisation may refer the
matter to the responsible director in the European Commission.
Article 19: Financing not linked to costs
19.1
The payment of the EU Contribution may be partly or entirely linked to the achievement of
Results measured by reference to previously set milestones or through performance Indicators.
Such financing not linked to costs is not subject to Article 16. The relevant Results and the
means to measure their achievement shall be clearly described in Annex I.
19.2
The amount to be paid per achieved Result shall be set out in Annex III.
19.3
The Organisation shall not be obliged to report on costs linked to the achievement of Results.
However, the Organisation shall submit any necessary supporting documents, including where
relevant accounting documents, to prove that the Results triggering the payment as defined in
Annex I and III have been achieved.
19.4
Articles 3.7 f), 3.8 b), 3.8 f), 10.3 and 10.5 do not apply to the part of the Action supported by
way of financing not linked to costs.

Article 20: Contracting and Early Detection and Exclusion System
Contracting
20.1
Unless  otherwise  provided  for  in  the  Special  Conditions,  the  origin  of  the  goods  and  the
nationality of the organisations, companies and experts selected for carrying out activities in
the Action shall be determined in accordance with the Organisation’s relevant rules. However,
and in any event, goods, organisations, companies and experts eligible under the applicable
regulatory  provisions  of  the  European  Union  shall  be  eligible.  Without  prejudice  to  the
foregoing  or  to  the  Organisation's  assessed  Regulations  and  Rules,  the  Organisation  shall
promote the use of local contractors when implementing the Action.
Early Detection and Exclusion System
20.2
The Organisation shall inform the European Commission if, in relation to the implementation
of  the  Action,  it  has  detected  a  situation  of  exclusion  pursuant  to  its  rules  and  procedures
referred to in Article 2.2 d) and any ad hoc measure stipulated in the Special Conditions or if
it has detected a fraud and/or an irregularity pursuant to Article 2.6. This information may be
used  by  the  European  Commission  for  the  purpose  of  the  Early  Detection  and  Exclusion
System. The Organisation shall inform the European Commission when it becomes aware that
transmitted  information  needs  to  be  rectified  updated  or  removed.  The  Organisation  shall
ensure  that  the  entity  concerned  is  informed  that  its  data  was  transmitted  to  the  European
Commission  and  may  be  included  in  the  Early  Detection  and  Exclusion  System  and  be
published on the website of the European Commission. These requirements cease at the end
of the Implementation Period.
20.3
Without prejudice to the power of the European Commission to exclude a person or an entity
from future procurement contracts and grants financed by the EU and/or to impose financial
penalties according to the EU Financial Regulation, the Organisation may impose sanctions
on third parties according to its own Regulations and Rules ensuring, where applicable, the
right of defence of the third party.
20.4
The  Organisation  may  take  into  account,  as  appropriate  and  on  its  own  responsibility,  the
information contained in the Early Detection and Exclusion System, when implementing the
EU Contribution. Access to that information can be provided through the authorised persons
Contribution Agreement June 2023
Annex II - General Conditions
Page 21

or via consultation with the European Commission as referred in Article 5.6 of the Special
Conditions.
Electronically signed on 22/12/2023 12:36 (UTC+01) in accordance with Article 11 of Commission Decision (EU) 2021/2121
Contribution Agreement June 2023
Annex II - General Conditions
Page 22

Document Outline