Annexes to COM(2020)854 - Brexit Adjustment Reserve - Main contents

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dossier	COM(2020)854 - Brexit Adjustment Reserve.
document	COM(2020)854
date	October 6, 2021

Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community (OJ L 29, 31.1.2020, p. 7).

(6) Regulation (EU) No 1380/2013 of the European Parliament and of the Council of 11 December 2013 on the Common Fisheries Policy, amending Council Regulations (EC) No 1954/2003 and (EC) No 1224/2009 and repealing Council Regulations (EC) No 2371/2002 and (EC) No 639/2004 and Council Decision 2004/585/EC (OJ L 354, 28.12.2013, p. 22).

(7) OJ L 282, 19.10.2016, p. 4.

(8) Council Decision (EU) 2016/1841 of 5 October 2016 on the conclusion, on behalf of the European Union, of the Paris Agreement adopted under the United Nations Framework Convention on Climate Change (OJ L 282, 19.10.2016, p. 1).

(9) Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 (OJ L 198, 22.6.2020, p. 13).

(10) Regulation (EU, Euratom) 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 Regulation (EU, Euratom) No 966/2012 (OJ L 193, 30.7.2018, p. 1).

(11) Regulation (EU, Euratom) 2020/2092 of the European Parliament and of the Council of 16 December 2020 on a general regime of conditionality for the protection of the Union budget (OJ L 433 I, 22.12.2020, p. 1).

(12) OJ L 123, 12.5.2016, p. 1.

(13) Council Regulation (EC) No 2012/2002 of 11 November 2002 establishing the European Union Solidarity Fund (OJ L 311, 14.11.2002, p. 3).

(14) Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council of 11 September 2013 concerning investigations conducted by the European Anti-Fraud Office (OLAF) and repealing Regulation (EC) No 1073/1999 of the European Parliament and of the Council and Council Regulation (Euratom) No 1074/1999 (OJ L 248, 18.9.2013, p. 1).

(15) Council Regulation (EC, Euratom) No 2988/95 of 18 December 1995 on the protection of the European Communities financial interests (OJ L 312, 23.12.1995, p. 1).

(16) Council Regulation (Euratom, EC) No 2185/96 of 11 November 1996 concerning on-the-spot checks and inspections carried out by the Commission in order to protect the European Communities’ financial interests against fraud and other irregularities (OJ L 292, 15.11.1996, p. 2).

(17) Council Regulation (EU) 2017/1939 of 12 October 2017 implementing enhanced cooperation on the establishment of the European Public Prosecutor’s Office (‘the EPPO’) (OJ L 283, 31.10.2017, p. 1).

(18) Directive (EU) 2017/1371 of the European Parliament and of the Council of 5 July 2017 on the fight against fraud to the Union’s financial interests by means of criminal law (OJ L 198, 28.7.2017, p. 29).

(19) Regulation (EU) 2018/1725 of the European Parliament and of the Council of 23 October 2018 on the protection of natural persons with regard to the processing of personal data by the Union institutions, bodies, offices and agencies and on the free movement of such data, and repealing Regulation (EC) No 45/2001 and Decision No 1247/2002/EC (OJ L 295, 21.11.2018, p. 39).

(20) Commission Regulation (EU) No 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty (OJ L 187, 26.6.2014, p. 1).

(21) Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation) (OJ L 119, 4.5.2016, p. 1).

ANNEX I

ALLOCATION METHODOLOGY FOR THE RESOURCES OF THE RESERVE SET OUT IN ARTICLE 4(3)

The resources of the Reserve shall be distributed between the Member States according to the following methodology:

Each Member State’s share of the resources of the Reserve is determined as the sum of a factor linked to the fish caught in the United Kingdom’s exclusive economic zone, a factor linked to trade with the United Kingdom, and a factor linked to the population of maritime border regions with the United Kingdom.

The factor linked to fish caught in the United Kingdom’s exclusive economic zone is used to allocate EUR 656 452 200. The factor linked to trade with the United Kingdom is used to allocate EUR 4 540 461 050. The factor linked to maritime border regions with the United Kingdom is used to allocate EUR 273 521 750. Each of those amounts is expressed in current prices.

The factor linked to the fish caught in the United Kingdom’s exclusive economic zone is obtained on the basis of the following criteria and by applying the following steps:

(a)	share of each Member State of the total value of the fish caught in the United Kingdom’s exclusive economic zone;

(b)

those shares are increased for Member States with fisheries that have an above average dependency on the fish caught in the United Kingdom’s exclusive economic zone and decreased for the Member States that have a below average dependency as follows:

(i)	for each Member State, the value of fish caught in United Kingdom’s exclusive economic zone as a percentage of the total value of fish caught by that Member State is expressed as an index of the Union average (‘index of dependency’);

(ii)	the initial share of the value of fish caught in the United Kingdom’s exclusive economic zone is adjusted by multiplying it with the Member State’s index of dependency raised to the power of 75 %;

(iii)

those adjusted shares are rescaled to ensure that the sum of all Member States’ shares equals 100 %.

The factor linked to trade with the United Kingdom is obtained by applying the following steps:

(a)	each Member State’s trade with the United Kingdom is expressed as share of the Union trade with the United Kingdom (trade is the sum of the imports and the exports of goods and services);

(b)	to assess the relative importance of the trade flows with the United Kingdom for each Member State, the sum of those trade flows is expressed as a percentage of the Member State’s gross domestic product (GDP) and subsequently expressed as an index of the Union average (‘index of dependency’);

(c)	the initial share of trade with the United Kingdom is adjusted by multiplying it with the Member State’s index of dependency raised to the power of 75 %;

(d)	those adjusted shares are rescaled to ensure that the sum of all Member States’ shares equals 100 %;

(e)	the shares so obtained are adjusted by dividing them with the Member State’s gross national income (GNI) per capita (in purchasing power parities) expressed as a percentage of the average GNI per capita of the Union (average expressed as 100 %);

(f)

the resulting shares are rescaled to ensure the sum of shares equals 100 %, whereby it is ensured that no Member State can have a share higher than 25 % of the Union’s total; the resources deducted due to that capping are redistributed to the other Member States, proportionally to their non-capped shares;

(g)

if that calculation leads to an allocation exceeding 0,36 % of a Member State’s GNI (measured in euro), that Member State’s allocation is capped at the level of 0,36 % of its GNI; the resources deducted due to that capping are redistributed to the other Member States, proportionally to their non-capped shares;

(h)

if the calculation referred to in point (g) results in an aid intensity of more than EUR 195/inhabitant, that Member State’s allocation is capped at the level corresponding to an aid intensity of EUR 195/inhabitant; the resources deducted due to that capping are distributed to the Member States not capped under points (g) or (h), proportionally to their shares as calculated in point (g).

The factor linked to the maritime border regions with the United Kingdom is obtained by calculating the share of each Member State in the total population of the maritime border regions with the United Kingdom. Maritime border regions with the United Kingdom are NUTS level 3 regions along border coastlines and other NUTS level 3 regions of which at least half of the population lives within 25 km of these border coastlines. Border coastlines are defined as coastlines that are located at a maximum of 150 km from the United Kingdom’s coastline.

For the purposes of calculating the distribution of the resources of the Reserve:

(a)	for the value of the fish caught in United Kingdom’s exclusive economic zone, the reference period shall be from 2015 to 2018;

(b)	for the value of the fish caught in the United Kingdom’s exclusive economic zone as a share of total value of fish caught by a Member State, the reference period shall be from 2015 to 2018;

(c)	for trade the reference period shall be from 2017 to 2019;

(d)	for GNI the reference period shall be from 2017 to 2019;

(e)	for GNI/capita (in purchasing power parities) the reference period shall be from 2016 to 2018;

(f)	for GDP and for total population of the Member States the reference period shall be from 2017 to 2019;

(g)	for population of the NUTS level 3 regions the reference period shall be 2017.

ANNEX II

Template for an application for a financial contribution from the reserve, including elements related to the accounts

1.	Member State
2.	Date of application
3.	Date of first expenditure	Date incurred	Date paid
4.	Date of last expenditure	Date incurred	Date paid
5.	Amount of pre-financing received (in EUR)
6.	Body (1) or bodies responsible for the management of the financial contribution from the Reserve Responsible person and function Contact details
7.	Independent audit body Responsible person and function Contact details
8.	Body or bodies to which tasks have been delegated, where applicable
9.	Short description of the areas and sectors affected by the withdrawal of the United Kingdom from the Union and the response measures put in place
10.	When carried out, a short description of the multi-level dialogue
11.	Total expenditure incurred and paid before deductions
12.	Amounts deducted by the Member State and the reasons for deduction
13.	In particular, out of the amounts deducted under point 12., the amounts corrected as a result of audits of the measures financed
14.	Total expenditure submitted for the financial contribution from the Reserve (EUR) (14 = 11 – 12)
15.	In national currency (where applicable)	For Member States whose currency is not the euro: please convert all amounts into euro at the monthly accounting exchange rates established by the Commission published at: https://ec.europa.eu/info/funding-tenders/how-eu-funding-works/information-contractors-and-beneficiaries/exchange-rate-inforeuro_en
16.	Monthly accounting exchange rates established by the Commission
17.	Territorial distribution of the expenditure at NUTS level 2 regions, where relevant
18.	Breakdown of expenditure submitted for the financial contribution from the Reserve, including the amount of resources spent in accordance with Article 4(4) (please provide a list of the individual actions financed under each measure and the related expenditure for each action) Each expenditure item should be entered only once	EUR	National currency (if applicable)	Output indicators (please provide a number)
18.1.	Measures to support private and public businesses, in particular SMEs, the self-employed, local communities and organisations adversely affected by the withdrawal of the United Kingdom from the Union			Enterprises (supported) Enterprises supported (advised) Population benefiting
18.2.	Measures to support the economic sectors most adversely affected by the withdrawal of the United Kingdom from the Union			Enterprises (supported) Enterprises supported (advised)
18.3.	Measures to support businesses, regional and local communities and organisations, including small-scale coastal fisheries, dependent on fishing activities in United Kingdom waters, in waters of special status territories or in waters covered by fisheries agreements with coastal states where fishing opportunities for Union fleets have been reduced as a result of the United Kingdom’s withdrawal from the Union			Enterprises (supported) Enterprises supported (advised) Population benefiting
18.4.	Measures to support job creation and protection, including green jobs, short-time work schemes, re-skilling and training in sectors most adversely affected by the withdrawal of the United Kingdom from the Union			Participants
18.5.	Measures to ensure the functioning of border, and security controls, including additional personnel and their training, and infrastructure			Additional Personnel (in FTE) Physical infrastructure adapted (m2)
18.6.	Measures to ensure the functioning of customs and collection of indirect taxation, including additional personnel and their training, and infrastructure			Additional Personnel (in FTE) Physical infrastructure adapted (m2)
18.7.	Measures to ensure the functioning of sanitary and phytosanitary and fisheries controls, including additional personnel and their training, and infrastructure			Additional Personnel (in FTE) Physical infrastructure adapted (m2)
18.8.	Measures to facilitate regimes for certification and authorisation of products, to assist in meeting establishment requirements, to facilitate labelling and marking, for example for safety, health, environmental standards, as well as to assist in mutual recognition			Enterprises (supported) Enterprises supported (advised)
18.9.	Measures for communication, information and awareness-raising of citizens and businesses about changes to their rights and obligations stemming from the withdrawal of the United Kingdom from the Union			Enterprises supported (advised) Population covered
18.10.	Measures aimed at the reintegration of Union citizens as well as persons having the right to reside on the territory of the Union who left the United Kingdom, as a result of the withdrawal of the United Kingdom from the Union			Persons
18.11.	Other (please specify)
19.	Any complementary Union funding received or requested for expenditure not included in this application Short description/amount (e.g. use of cohesion policy funding/REACT-EU/JTF/RRF/other – please specify)
20.	Please indicate the legal entity and the full bank account number and holder in case of a further payment	☐ Account used previously to receive EU payments ☐ New account

Template for the management declaration to accompany the application for a financial contribution from the Reserve

I/We, the undersigned [name(s), first name(s), title(s) or function(s)], Head of the body responsible for the management of the financial contribution from the Reserve, based on the implementation of the Reserve during the reference period, based on my/our own judgement and on all information available to me/us at the date of the application submitted to the Commission, including the results from verifications carried out and from audits in relation to the expenditure included in the application submitted to the Commission in respect of the reference period, and taking into account my/our obligations under Regulation (EU) 2021/1755 of the European Parliament and of the Council (2), hereby declare that:

(a)	the information in the application is properly presented, complete and accurate in accordance with Article 63 of the Financial Regulation,

(b)	the expenditure entered in the application complies with applicable law and was used for its intended purpose,

(c)	the control systems put in place ensure the legality and regularity of the underlying transactions.

I/We confirm that irregularities identified in the final audit and control reports in relation to the reference period have been appropriately treated in the application. Furthermore, I/we confirm the reliability of data relating to the implementation of the Reserve. I/we also confirm that effective and proportionate anti-fraud measures are in place and that those measures take account of the risks identified in that respect.

Finally, I/we confirm that I/we am/are not aware of any undisclosed matter related to the implementation of the Reserve which could be damaging to the reputation of the Reserve.

Template for the audit opinion to accompany the application for a financial contribution from the Reserve

To the European Commission, Directorate-General for Regional and Urban Policy

1. INTRODUCTION

I, the undersigned, representing [the name of the independent audit body], have audited

(i)	the elements related to the accounts in the application for the reference period;

(ii)	the legality and regularity of the expenditure for which reimbursement has been requested from the Commission; and

(iii)

the functioning of the management and control system for the Reserve, and verified the management declaration,

in order to issue an audit opinion.

2. RESPONSIBILITIES OF THE BODY (3) RESPONSIBLE FOR THE MANAGEMENT OF THE FINANCIAL CONTRIBUTION FROM THE RESERVE

[name of the body] is identified as the body responsible to ensure proper functioning of the management and control system for the Reserve with regard to the functions and tasks provided for in Article 14.

In addition, [the name of body] is responsible to ensure and declare the completeness, accuracy and veracity of the application.

Moreover, it is the responsibility of the body responsible for the management of the financial contribution from the Reserve to confirm that the expenditure entered in the application is legal and regular and complies with applicable law.

3. RESPONSIBILITIES OF THE INDEPENDENT AUDIT BODY

As established by Article 63 of the Financial Regulation, my responsibility is to express an independent opinion on the completeness, veracity and accuracy of the elements related to the accounts in the application, on the legality and regularity of the expenditure for which reimbursement has been requested from the Commission, and on the proper functioning of the management and control system for the Reserve put in place.

My responsibility is also to include in the opinion a statement as to whether the audit work puts in doubt the assertions made in the management declaration.

The audits in respect of the Reserve were carried out in accordance with internationally accepted audit standards. Those standards require that the independent audit body complies with ethical requirements, plans and performs the audit work in order to obtain reasonable assurance for the purpose of the audit opinion.

An audit involves performing procedures to obtain sufficient and appropriate evidence to support the opinion set out below. The procedures performed depend on the auditor’s professional judgement, including assessing the risk of material non-compliance, whether due to fraud or error. The audit procedures performed are those I believe are appropriate in the circumstances and are compliant with the requirements of the Financial Regulation.

I believe that the audit evidence gathered is sufficient and appropriate to provide the basis for my opinion [[in case there is any scope limitation:], except where mentioned in Point 4 ‘Scope limitation’].

The summary of the findings from the audits in respect of the Reserve are reported in the attached report in accordance with point (b) of Article 63(5) of the Financial Regulation.

4. SCOPE LIMITATION

Either

There were no limitations on the audit scope.

Or

The audit scope was limited by the following factors:

(a)

…;

(b)

…;

(c)

….

[Indicate any limitation on the audit scope, for example any lack of supporting documentation, cases under legal proceedings, and estimate under ‘Qualified opinion’ below, the amounts of expenditure and contribution from the Reserve affected and the impact of the scope limitation on the audit opinion. Further explanations in this regard shall be provided in the report, as appropriate.]

5. OPINION

Either (Unqualified opinion)

In my opinion, and based on the audit work performed:

(i)	the elements related to the accounts in the application give a true and fair view;

(ii)	expenditure included in the application is legal and regular; and

(iii)

the management and control system for the Reserve functions properly.

The audit work carried out does not put in doubt the assertions made in the management declaration.

Or (Qualified opinion)

In my opinion, and based on the audit work performed:

(1)

The elements related to the accounts in the application

—	the elements related to the accounts in the application give a true and fair view [where the qualification applies to the application, the following text is added:] except in the following material aspects: ….

(2)

Legality and regularity of the expenditure included in the application

—

the expenditure included in the application is legal and regular [where the qualification applies to the application, the following text is added:] except for the following aspects: ….

The impact of the qualification is limited [or significant] and corresponds to … (amount in EUR of the total amount of expenditure).

(3)

The management and control system for the Reserve in place as at the date of this audit opinion

—

the management and control system for the Reserve put in place functions properly [where the qualification applies to the management and control system for the Reserve, the following text is added:] except for the following aspects: ….

The impact of the qualification is limited [or significant] and corresponds to …. (amount in EUR of the total amount of expenditure).

The audit work carried out does not put/puts [delete as appropriate] in doubt the assertions made in the management declaration.

[Where the audit work carried out puts in doubt the assertions made in the management declaration, the independent audit body shall disclose in this paragraph the aspects leading to this conclusion.]

Or (Adverse opinion)

In my opinion, and based on the audit work performed:

(i)	the elements related to the accounts in the application give/do not give [delete as appropriate] a true and fair view; and/or

(ii)	the expenditure in the application for which reimbursement has been requested from the Commission is/is not [delete as appropriate] legal and regular; and/or

(iii)

the management and control system for the Reserve put in place functions/does not function [delete as appropriate] properly.

This adverse opinion is based on the following aspects:

—	in relation to material matters related to the application: [please specify] and/or [delete as appropriate]

—	in relation to material matters related to the legality and regularity of the expenditure in the application for which reimbursement has been requested from the Commission: [please specify] and/or [delete as appropriate]

—	in relation to material matters related to the functioning of the management and control system for the Reserve: [please specify].

The audit work carried out puts in doubt the assertions made in the management declaration as regards the following aspects:

[The independent audit body may also include emphasis of matter, not affecting its opinion, as established by internationally accepted auditing standards. A disclaimer of opinion can be given in exceptional cases.]

Date:

Signature:

(1) Where applicable in accordance with Article 14(1), point (a), the information shall be provided for all bodies responsible for the management of the financial contribution from the Reserve.

(2) Regulation (EU) 2021/1755 of the European Parliament and of the Council of 6 October 2021 establishing the Brexit Adjustment Reserve (OJ L 357, 8.10.2021, p. 1).

(3) Where applicable in accordance with Article 14(1), point (a), the information shall be provided for all bodies responsible for the management of the financial contribution from the Reserve.

ANNEX III

Template for the description of the management and control system for the Reserve

1. GENERAL

1.1.

Information submitted by:

(a)	Member State:

(b)	Name and email of main contact point (body responsible for the description):

1.2.

The information provided describes the situation on: (dd/mm/yyyy)

1.3.

System structure (general information and flowchart showing the organisational relationship between the bodies involved in the management and control system for the Reserve)

(a)	Body (1) responsible for the management of the financial contribution from the Reserve (name, address and contact point in the body):

(b)	The body or bodies to which tasks have been delegated (name, address and contact point in the body), where applicable:

(c)	The independent audit body (name, address and contact points in the body):

(d)	Indicate how the principle of separation of functions between the bodies referred to in points (a) and (c) is respected:

2. BODY RESPONSIBLE FOR THE MANAGEMENT OF THE FINANCIAL CONTRIBUTION FROM THE RESERVE

2.1.

Body responsible for the management of the financial contribution from the Reserve and its main functions

(a)	The status of the body responsible for the management of the financial contribution from the Reserve (national or regional body) and the body of which it is part:

(b)	Framework to ensure that an appropriate risk management exercise is conducted when necessary, and in particular in the event of major modifications to the management and control system:

2.2.

Description of the organisation and the procedures related to the functions and tasks of the body responsible for the management of the financial contribution from the Reserve

(a)	Description of the functions and tasks carried out by the body responsible for the management of the financial contribution from the Reserve:

(b)	Description of how the work is organised and what procedures will be applied in particular in carrying out verifications (administrative and on-the-spot) and to ensure an adequate audit trail regarding all documents related to expenditure:

(c)	Indication of planned resources to be allocated in relation to the different functions of the body responsible for the management of the financial contribution from the Reserve (including information on any planned outsourcing and its scope, where appropriate):

3. INDEPENDENT AUDIT BODY

Status and description of the organisation and the procedures related to the functions of the independent audit body

(a)	The status of the independent audit body (national or regional body) and the body of which it is part, where relevant:

(b)	Description of the functions and tasks carried out by the independent audit body:

(c)	Description of how the work is organised (workflows, processes, internal divisions), what procedures apply and when, how these are supervised, indication of planned resources to be allocated in relation to the different audit tasks:

4. ELECTRONIC SYSTEM

Description of the electronic system or systems including a flowchart (central or common network system or decentralised system with links between the systems) for:

(a)

Recording and storing, in electronic form data on each measure financed from the Reserve:

—	the name of the recipient and amount of the financial contribution from the Reserve,

—	the name of the contractor (2) and sub-contractor (3), where the recipient is a contracting authority in accordance with the Union or national provisions on public procurement, and value of the contract,

—	the first name, last name and date of birth of beneficial owner (4), as defined by Article 3, point (6), of Directive (EU) 2015/849 of the European Parliament and of the Council (5), of the recipient or contractor referred to in the first and second indent of this point,

—	where appropriate, data on individual participants;

(b)	Ensuring that accounting records for each measure financed from the Reserve are recorded and stored, and that those records support the data required for drawing up the application for contribution;

(c)	Maintaining accounting records of expenditure incurred and paid;

(d)	Indicating whether the electronic systems are functioning effectively and can reliably record the data as at the date set out in point 1.2;

(e)	Describing the procedures to ensure the electronic systems’ security, integrity and confidentiality.

(1) Where applicable in accordance with Article 14(1), point (a), the information shall be provided for all bodies responsible for the management of the financial contribution from the Reserve.

(2) Information only required where public procurement procedures above the Union thresholds are concerned.

(3) Information only required at the first level of sub-contracting, only where information is recorded on the respective contractor, and only for sub-contracts above EUR 50 000 total value.

(4) Member States may comply with this requirement by using the data stored in the registers as referred to in Article 30 of Directive (EU) 2015/849.

(5) Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC (OJ L 141, 5.6.2015, p. 73).