Beneficiaries & Affiliated Entities (Articles 7–8)

ARTICLE 7

BENEFICIARIES

The beneficiaries, as signatories of the Agreement, are fully responsible towards the granting authority for implementing it and for complying with all its obligations. They must implement the Agreement to their best abilities, in good faith and in accordance with all the obligations and terms and conditions it sets out. They must have the appropriate resources to implement the action and implement the action under their own responsibility and in accordance with Article 11. If they rely on affiliated entities or other participants (see Articles 8 and 9), they retain sole responsibility towards the granting authority and the other beneficiaries. They are jointly responsible for the technical implementation of the action. If one of the beneficiaries fails to implement their part of the action, the other beneficiaries must ensure that this part is implemented by someone else (without being entitled to an increase of the maximum grant amount and subject to an amendment; see Article 39). The financial responsibility of each beneficiary in case of recoveries is governed by Article 22. The beneficiaries (and their action) must remain eligible under the EU programme funding the grant for the entire duration of the action. Costs and contributions will be eligible only as long as the beneficiary and the action are eligible. The internal roles and responsibilities of the beneficiaries are divided as follows: (a) Each beneficiary must: (i) keep information stored in the Portal Participant Register up to date (see Article 19) (ii) inform the granting authority (and the other beneficiaries) immediately of any events or circumstances likely to affect significantly or delay the implementation of the action (see Article 19) (iii) submit to the coordinator in good time: - the pre-financing guarantees (if required; see Article 23) - the financial statements and certificates on the financial statements (CFS) (if required; see Articles 21 and 24.2 and Data Sheet, Point 4.3) - the contribution to the deliverables and technical reports (see Article 21) - any other documents or information required by the granting authority under the Agreement (iv) submit via the Portal data and information related to the participation of their affiliated entities. (b) The coordinator must: (i) monitor that the action is implemented properly (see Article 11) (ii) act as the intermediary for all communications between the consortium and the granting authority, unless the Agreement or granting authority specifies otherwise, and in particular:

For the definition, see Article 190(2) EU Financial Regulation 2024/2509: “Where several entities satisfy the criteria for being awarded a grant and together form one entity, that entity may be treated as the sole beneficiary, including where it is specifically established for the purpose of implementing the action financed by the grant.”

- the areas where close collaboration/synchronisation is needed (e.g. on management of outputs, common approaches towards standardisation, links with regulatory and policy activities, common communication and dissemination activities, sharing of information, access to background and results, etc.) - settlement of disputes - liability, indemnification and confidentiality arrangements between the beneficiaries in both actions. The arrangements with the participants of the other action must not contain any provision contrary to this Agreement.] ]

1. Division of roles and responsibilities — Responsibilities towards the granting authority — Technical and financial responsibility for the action The beneficiaries are formal parties to the Grant Agreement (they sign the Grant Agreement or Accession Forms). They have direct contractual obligations under the Grant Agreement and are fully responsible for implementing the action properly (see Article 11).

This means that:

− each beneficiary must ensure that it complies with its obligations under the Grant Agreement

− each beneficiary must ensure swift and proper implementation of the action (i.e. that there are no delays and that the work is done properly)

− each beneficiary is responsible (towards the granting authority) for the tasks performed by its subcontractors, affiliated entities and associated partners

− the granting authority is NOT responsible for the implementation of the action and has NO responsibility for the way in which the action is conducted (or any adverse consequences).

The beneficiaries are jointly responsible for the technical implementation of the action. This means that they (and any new beneficiaries added later on during the project through an amendment) accept that they are together responsible for fully implementing the whole project.

If one of the beneficiaries leaves the action (irrespective of the reason), the remaining partners must carry out the action as set out in the description of the action (DoA; Annex 1) — including the part of the defaulting beneficiary. They will have to do this without any additional funding. The Grant Agreement will have to be amended, in order to redistribute the tasks, terminate the beneficiary’s participation, and/or add a new beneficiary (see Article 39).

Example

Beneficiaries A, B and C have signed a Grant Agreement with a duration of three years with the Commission in order to carry out an action. One year later, beneficiary C goes bankrupt. Beneficiaries A and B remain fully responsible to implement the whole action, including the tasks of C. A and B must agree that one (or both) take over the part of beneficiary C (or ensure replacement by adding a new beneficiary), to make sure that the entire action is implemented as described in Annex 1.

From a financial point of view, each participant is in principle responsible for the proper and sound financial management of their part of the grant. In case of recoveries, there may however, depending on the programme and Grant Agreement, be certain situations where beneficiaries may be held responsible for their partners (financial liability):

− for programmes without MIM (all programmes except HE): the financial liability is as follows:

− at beneficiary termination, the beneficiary concerned must pay back any undue amounts to the consortium; the granting authority will inform them about this obligation, but not intervene to recover this money (no debit note)

− at the payment of the balance, the coordinator is fully liable for the whole amount that needs to be recovered (i.e. paid back to the granting authority)— even if it has not been the final recipient of the concerned amount (debit note); if the coordinator does not pay (irrespective of the reason), the granting authority will enforce recovery (through offsetting, drawing on the pre-financing guarantee, joint and several liability of other beneficiaries or affiliated entities, or legal action or enforceable decision; see Article 22.4)

− after payment of the balance, recoveries (if any) will be made directly against the beneficiary concerned (debit note)

− for programmes with MIM (HE only): each beneficiary’s financial liability is in principle limited to their own debt and undue amounts paid for costs declared by their affiliated entities. It is only for the contribution to the MIM that financial responsibility is shared:

− at beneficiary termination, the beneficiary concerned must pay back any undue amounts to the consortium; the granting authority will inform them about this obligation and, if the beneficiary doesn’t pay, the granting authority may call on the MIM to intervene and then start a recovery procedure against the beneficiary for the account of the MIM (debit note)

− at the payment of the balance, the contribution to the MIM will be used to cover recoveries (if any); if the contribution is not sufficient, the coordinator will be asked to pay back the amount owed (as representative of the consortium); if the debt is not paid but the report on the distribution of payments was provided, the granting authority will calculate the share of the debt per beneficiary and confirm the amount to be recovered from each of them separately (debit note); if they do not pay (irrespective of the reason), the granting authority will enforce recovery (through offsetting, joint and several liability of affiliated entities, or legal action or enforceable decision; see Article 22.4); if the report on the distribution of payments was NOT provided, the granting authority will enforce recovery against the coordinator (debit note); if needed, the granting authority may call on the MIM to intervene and will then continue recovery for the account of the MIM (second debit note replacing the first)

− after payment of the balance, recoveries (if any) will be made directly against the beneficiary concerned (debit note); no MIM intervention (new for 2021- 2027).

Beneficiaries are always liable for repaying the debts of their affiliated entities (see Article 22.2).

2. Division of roles and responsibilities — Roles and responsibilities within the consortium The general division of roles and responsibilities within the consortium is as follows:

− the coordinator must coordinate and manage the grant and is the central contact point for the granting authority

− the beneficiaries and other participants must all together contribute to a smooth and successful implementation of the grant (i.e. contribute to the proper implementation of the action, comply with their own obligations under the Grant Agreement and support the coordinator in his obligations).

All communication with the granting authority should in principle go through the coordinator. Documents/information should be submitted via the coordinator — unless, for specific cases, the granting authority requests individual partners to provide such information directly (e.g. in case of an audit, the beneficiaries must submit the documents requested directly to the auditors, see Article 25).

Other participants (i.e. affiliated entities, associated partners, subcontractors, etc) may be part of the consortium, if this is considered useful by the beneficiaries. It is generally recommended to involve all entities that are important for the successful implementation of the project, independently of their formal role in the grant.

3. The coordinator’s roles and responsibilities The coordinator is the central contact point for the granting authority and represents the consortium (towards the granting authority).

For this purpose, the Grant Agreement imposes a number of specific coordination tasks.

Coordination tasks:

▪ Monitor that the action is implemented properly

▪ Act as the intermediary for all communications — unless the Grant Agreement specifies otherwise

▪ Request and review documents or information required by the granting authority and verify their completeness and correctness

▪ Submit the deliverables and reports in the system

▪ Submit the pre-financing guarantees to the granting authority (if any)

▪ Distribute payments to the other beneficiaries, without unjustified delay

▪ Inform the granting authority of the amounts paid to each beneficiary, if requested to do so (see Articles 22 and 32)

The coordination tasks include quality-checking of documents/information submitted by the beneficiaries, in particular:

− reviewing the individual financial statements from each beneficiary to verify consistency with the action tasks, as well as completeness and correctness

− verifying that all the requested documents/information have been provided by the beneficiary (e.g. the use of resources, etc)

− verifying that the beneficiary submits the documents/information in the requested format

− verifying that the technical information submitted by a beneficiary concerns its action tasks as described in Annex 1 (and not something unrelated to the action).

The coordinator is not, however, obliged to verify the eligibility of the costs declared, nor to request justifications. Each beneficiary/affiliated entity remains responsible for the cost it declares (both as regards eligibility and as regards sufficient records and supporting documents to substantiate them).

The coordination tasks listed above can NOT be subcontracted or outsourced to another entity including other beneficiaries, affiliated entities, subcontractors, or associated partners. They can only be delegated, under certain circumstances, to entities with ‘authorisation to administer’ or in the case of ‘sole beneficiaries’ within the meaning of Article 190(2) of the Financial Regulation 2024/250925 (see below).

By contrast, the coordinator remains free — like any other beneficiary — to use affiliated entities or subcontractors for other tasks; see Articles 8 and 9.3).

Specific cases (coordinator responsibilities):

‘Entities with authorisation to administer’ — Coordinators that are public bodies may exceptionally delegate coordination tasks (e.g. the administration of the payments) to another entity, if this is their usual practice (e.g. a foundation).

For the handling of such coordinator tasks, this other entity must fulfil the following conditions:

− it must participate as an affiliated entity of the coordinator

and

− it must have been granted an ‘authorisation to administer’ in order to handle the coordinator’s administrative affairs (and those must include receiving and administering EU funds).

In this case, the bank account number to be provided by the coordinator during grant preparation must be that of the entity with the authorisation to administer. The payments will then be transferred directly to it and it will have to distribute them for the coordinator.

Since they participate as affiliated entity, the entity must be registered in the Participant Register (have a PIC) and be validated by the Central Validation Service.

The coordinator will remain fully responsible for the entity under the Grant Agreement. For detailed guidance, see the specific cases in Article 8.

‘Sole beneficiaries’ (or similar, e.g. ERICs26) — Entities which form one joint entity for the purpose of implementing the action and all comply with the eligibility criteria can participate as ‘sole beneficiaries’ in EU actions (see Article 190(2) FR 2024/250927). Coordinators which are sole beneficiaries (or similar, e.g. European Research Infrastructure Consortia (ERICs)) and do not have their own resources may exceptionally delegate the coordination tasks to one of their members. Coordinators using one of their members remain fully responsible for them under the Grant Agreement.

Technical/scientific coordination (or similar) — The coordinator within the meaning of the Grant Agreement is the beneficiary in charge of the (administrative) coordination tasks set out in this Article. Other kinds of coordination activities, i.e. tasks not listed in this Article (e.g. of technical or scientific nature) can be carried out by any other participant.

These participants may internally (i.e. within the consortium) be called, for example, ‘technical’ or ‘scientific coordinator’, but they will NOT be considered coordinator in the meaning of the Grant Agreement and are not subject to the rules in Article 7.

[old Financial Regulation: Article 187(2) Financial Regulation 2018/1046]. Council Regulation (EC) No 723/2009 of 25 June 2009 on the Community legal framework for a European Research Infrastructure Consortium (OJ L 206, 08.08.2009, p.1). [old Financial Regulation: Article 187(2) Financial Regulation 2018/1046].

Costs for this type of technical/scientific coordination are eligible, if they comply with the eligibility conditions set out in Article 6.

4. Internal arrangements between beneficiaries — Consortium agreement The participants should (mandatory for multi-beneficiary grants, if required in the Data Sheet) conclude a consortium agreement to ensure a smooth and successful action implementation.

The ‘consortium agreement’ is an agreement between members of the consortium, to set out their internal arrangements for implementing the project and the administration of the EU grant. It is purely internal; it should NOT be submitted to the granting authority for information or review; the granting authority is NOT party and has NO responsibility for it (nor for any adverse consequences).

Best practice: In view of their importance for avoiding disputes and ensuring a smooth implementation of the grant, we strongly recommend that every consortium sets up a consortium agreement, even if not mandatory in the Data Sheet. In any case, the beneficiaries need to put in place all necessary arrangements regarding their operation and co-ordination to ensure the proper implementation of the action.

The consortium agreement should complement the Grant Agreement and must NOT contain any provision contrary to it (or the applicable EU, international or national law).

It should in principle be negotiated and concluded before grant signature (i.e. each beneficiary should sign the consortium agreement before signing the Accession Form to accede to the Grant Agreement). Otherwise, there is usually a serious risk that prolonged disagreement jeopardises the action. Of course, the consortium agreement does not have to remain the same during the lifetime of the action, it can be modified by the consortium at any moment.

The duration should at least cover the time until the final payment, however, a longer or open-ended duration, where relevant, should be considered in order to fully cover any issues that may emerge after the final payment, such as exploitation of the results (e.g. licensing), issues arising from audits, etc.

The agreement must be in writing. It may be a simple written agreement or take some other form (e.g. a notarial deed or part of the statutes of a separate legal entity, such as a European Economic Interest Grouping, association or joint venture).

For guidance on consortium agreements, see How to draw up your consortium agreement. This document has been developed for H2020 actions (MFF 2014-2020), but it can also serve for inspiration in other EU programmes and for the new MFF 2021-2027. In case of questions, please contact the granting authority.

5. Relationship with beneficiaries of linked actions — Collaboration agreement The participants of linked actions must make arrangements to determine and coordinate implementation in the areas where close collaboration is needed and should conclude a collaboration agreement (mandatory if required in the Data Sheet), to ensure that linked actions are implemented and coordinated properly.

‘Collaboration agreement’ are agreements between the participants of linked actions to coordinate their work. The granting authority is not party and has NO responsibility for them (nor for any adverse consequences). If the consortium in the linked actions is the same, the collaboration agreement may be included as part of the consortium agreement.

The collaboration agreement should complement the Grant Agreement and must NOT contain any provision contrary to it (or the applicable EU, international or national law).

It should set out the details on the collaboration and synchronisation of the activities as well as on the internal organisation and decision processes of the linked actions. If considered useful, it can also foresee common boards and advisory structures. These will complement the governance of each of the linked actions; they can NOT replace the consortium and other project governance mechanisms that are required for the EU action (if applicable).

For guidance on collaboration agreements, see How to draw up your collaboration agreement. This document has been developed for H2020 actions (MFF 2014-2020), but it can also serve for inspiration in other EU programmes and for the new MFF 2021-2027. In case of questions, please contact the granting authority.

General > Article 8 — Affiliated entities

ARTICLE 8

AFFILIATED ENTITIES

[OPTION 1 for programmes without affiliated entities: Not applicable ] [OPTION 2 for programmes with affiliated entities (standard): [OPTION 1 if selected for the grant: The following entities which are linked to a beneficiary will participate in the action as ‘affiliated entities’: - [AE legal name (short name)], PIC [number], linked to [BEN legal name (short name)] - [AE legal name (short name)], PIC [number], linked to [BEN legal name (short name)] [same for more AE] Affiliated entities can charge costs and contributions to the action under the same conditions as the beneficiaries and must implement the action tasks attributed to them in Annex 1 in accordance with Article 11. Their costs and contributions will be included in Annex 2 and will be taken into account for the calculation of the grant. The beneficiaries must ensure that all their obligations under this Agreement also apply to their affiliated entities. The beneficiaries must ensure that the bodies mentioned in Article 25 (e.g. granting authority, OLAF, Court of Auditors (ECA), etc.) can exercise their rights also towards the affiliated entities. Breaches by affiliated entities will be handled in the same manner as breaches by beneficiaries. Recovery of undue amounts will be handled through the beneficiaries. If the granting authority requires joint and several liability of affiliated entities (see Data Sheet, Point 4.4), they must sign the declaration set out in Annex 3a and may be held liable in case of enforced recoveries against their beneficiaries (see Article 22.2 and 22.4).] [OPTION 2: Not applicable] ]

1. Affiliated entities Affiliated entities (in some programmes formerly called ‘linked third parties’; new for 2021- 2027) are entities with a (usually legal or capital) link to a beneficiary and which implement parts of the action and are allowed to charge costs directly to the grant.

They do not become party to the Grant Agreement (do not sign the GA) but can be part of the consortium and often play an important role in implementing the action. Therefore, the Grant Agreement mentions them by name and defines their role (rights and obligations).

In practice, they are treated in many ways like beneficiaries (have their own financial statement, must provide their own CFS, must contribute to the technical report, must submit deliverables, etc).

Annotations in this AGA which refer to beneficiaries usually also apply to affiliated entities (just like the provisions of the MGA themselves; see also MGA Preamble). For technical and security reasons, affiliated entities do NOT however have direct access to the Portal My Area section (see Article 36). They therefore always need to go through their beneficiaries (to sign the declaration of honour, submit financial statements, contribute to the technical report, etc).

Characteristics of implementation by affiliated entities:

▪ They do not sign the Grant Agreement (and are therefore not beneficiaries).

▪ They perform action tasks attributed to them in the DoA Annex 1 (including the handling of subcontracting, financial support to third parties (FSTP), etc).

▪ They do not charge a ‘price’, but declare their own costs.

▪ The work is and is usually carried out on their premises, under their full and direct control, instructions and management, with their own employees.

▪ The beneficiary remains responsible towards the granting authority for the work carried out by its affiliated entities and for the recovery of undue payments from its affiliated entities (if any).

‘Link to the beneficiaries’ means in particular a legal or capital link, which is neither limited to the action nor established for the sole purpose of its implementation (see Article 190(1)(b) FR 2024/250928). This covers:

− permanent legal structures (e.g. the relationship between an association and its members)

− contractual cooperation not limited to the action (e.g. an existing collaboration agreement for activities in a field relevant to the action;)

− capital link, i.e.

− direct or indirect control of the beneficiary

− under the same direct or indirect control as the beneficiary

or

− directly or indirectly controlling the beneficiary.

Moreover, it covers not only the case of parent companies or holdings and their daughter companies or subsidiaries and vice-versa, but also the case of affiliates between themselves (e.g. entities controlled by the same entity).

Examples: 1. Company A established in France holding 20% of the shares in Company B established in Italy. However, with 20% of the shares, it has 60% of the voting rights in company B. Therefore, company A controls company B and both companies may be affiliated entities. 2. Company X and company Y do not control each other, but they are both owned by company Z. They are both considered affiliated entities. 3. The Ministry A is in accordance with national law the supervisory authority of a national agency. They can be considered as affiliated entities. Conversely, if the national agency is by statute set up as independent from the central government, the agency and the Ministry should instead participate as separate beneficiaries (or other fitting roles). 4. Associations, foundations or other legal entities composed of members — That entity is generally the beneficiary and the members are the affiliated entities. 5. Joint Research Units (JRU) (i.e. research laboratories/infrastructures created and owned by two or more different legal entities in order to carry out research) — They do not have a separate legal personality, but form a single research unit where staff and resources from the different members are put together to the benefit of all. Though lacking legal personality, they exist physically, with

[old Financial Regulation: Article 187(1)(b) Financial Regulation 2018/1046].

premises, equipment, and resources that belong to them. A member of the JRU can be the beneficiary and other members can participate as affiliated entities. The JRU has to meet all the following conditions: − scientific and economic unity − last a certain length of time − recognised by a public authority. It is necessary that the JRU itself is recognised by a public authority, i.e. an entity identified as such under the applicable national law. The beneficiary must provide to the granting authority, a copy of the resolution, law, decree, decision, attesting the relationship between the beneficiary and the affiliated entity(ies), or a copy of the document establishing the joint research unit, or any other document that proves that research facilities are put in a common structure and correspond to the concept of scientific and economic unit.

Just like beneficiaries, affiliated entities must normally fulfil the conditions for participation and funding.

Example

Company A established in Germany is a beneficiary in a grant. A owns B, a French company and also owns C, a company established in a non-EU country not associated to the programme. B and C may be considered affiliates to A, however only B may participate as affiliated entity to A, because company C is established in a non-associated third country and is therefore not eligible. C can instead participate as an associated partner.

Affiliated entities must be listed in Article 8, their tasks must be mentioned in Annex 1 and their budget in Annex 2.There is NO simplified approval procedure.

The beneficiaries are responsible for the proper implementation of the action tasks done by affiliated entities (proper quality, timely delivery, etc).

They must moreover ensure that the affiliated entities comply with the same obligations as they themselves (mutatis mutandis).

Obligations that must be extended to affiliated entities:

▪ all obligations (mutatis mutandis)

It is the beneficiaries’ responsibility to ensure that these obligations are accepted by the affiliated entities.

Moreover, the beneficiaries must also ensure that the bodies mentioned in Article 25 (e.g. granting authority, the European Court of Auditors (ECA), the European Anti-Fraud Office (OLAF)) have the right to carry out checks, reviews, audits and investigations on the affiliated entities, and in particular to audit the payments received. If access is denied by the affiliated entities, the costs will be rejected.

Specific cases (affiliated entities):

Joint and several liability of affiliated entities

The granting authority may (during

− the financial capacity of a beneficiary is ‘weak’ and

− the beneficiary mainly coordinates the work of its affiliated entity.

Examples: 1. The financially weak beneficiary is an association and most of the work is carried out by several of its members as affiliated entities. 2. The financially weak beneficiary is a small company with a substantial part of its work implemented by a bigger affiliated entity. 3. The proposal submitted by four independent entities established in four Member States is positively evaluated. The four successful applicants decide to form a legal entity to simplify the management of the project. The newly established entity will be the beneficiary, i.e. a new legal entity. The successful applicants will carry out the work as affiliated entities of the new legal entity.

If requested, the affiliated entity must accept joint and several liability with their beneficiary. In this case, it must sign a declaration (on paper and in blue-ink, using the Annex 3a generated by the system) to be submitted by the beneficiary at the moment of its accession to the grant (or amendment adding the affiliated entity). The affiliated entity must send the original to the beneficiary (by registered post with proof of delivery), who must upload it (as a scanned PDF copy) in the system.

The liability is for any amount owned by the beneficiary under the Grant Agreement, and up to the affiliated entity’s maximum EU contribution in Annex 2.

More details on the financial capacity check are available in the Online Manual > Participant Register > Financial capacity assessment on the Portal.

Entities created in order to manage administrative/financial tasks (including ‘entities with authorisation to administer’) — These are typically legal entities (foundations, spin-off companies, etc), created or controlled by a beneficiary (usually a public body like a university/ministry) to handle the financial and administrative aspects of the beneficiaries’ involvement e.g. in EU actions.

If they handle coordinator tasks (see Article 7) or implement action tasks themselves, they have to participate as affiliated entity of the beneficiary/coordinator and have to declare their own costs.

Resources they put at the disposal of their beneficiary for the action implementation should in principle also be charged by them as affiliated entity.

However, for HE, in case different funding rates are applied for the beneficiary versus the affiliated entity, the costs can also be declared by the beneficiary:

− if the resources are provided against payment: in accordance with rules of the appropriate cost category (e.g. Article 6.2.A.3 for personnel put at the disposal of the beneficiary; Article 6.2.C.2 for equipment or Article 6.2.C.3 for other goods, works and services)

− if the resources are provided for free: in accordance with the rules on eligibility of in-kind contributions (see Article 6.1).

Best practice: It is recommended to describe in the DoA Annex 1 the relation between the beneficiary and the foundation/spin-off and its impact on the Grant Agreement.