Q1: At the end of the EFF Programme period, many FLAGs will formally cease to exist. Do Managing Authorities have to apply the rules concerning durability of operations to the activities of FLAGs?
Article 56 of the EFF Regulation (1198/2006) refers to the durability of “operations”, therefore it applies to projects selected by FLAGs and implemented by beneficiaries. It does not apply to FLAGs running costs, which are only eligible for the duration of the period of activity of the FLAGs.
Q2: What are the rules concerning the eligibility of expenditure for fixed assets purchased by FLAGs under “running costs”?
Where the FLAGs have purchased assets under “running costs” which have to be depreciated over a number of years according to national legislation, only the part of depreciation until the end of the eligibility period (i.e. 31 December 2015) can be considered as eligible running costs.
In cases where the assets will still have a residual value at the end of the programme the (remaining) value should therefore be deducted from the final declarations of expenditure made by the concerned FLAGs.
For the sake of administrative simplification, FLAGs are encouraged to use lease contracts for the fixed assets they wish to finance as running costs, especially for those assets whose depreciation would extend beyond the eligibility period.
The EMFF Regulation (Art. 18.h) requires the Operational Programmes to contain “a list of selection criteria for community-led local development strategies” (section 5.1.3 of the OP Template). The reason for this is to explain what the Managing Authority will look for when deciding which FLAGs will get funding for the implementation of their local strategies. These criteria will enable MA to focus resources on those strategies that are of appropriate quality and show the greatest potential for achieving results at local level.
This set of questions addresses the following issues:
Q1: What should I put in my OP as a “list of selection criteria”?
The process of selecting local strategies by the Managing Authority (or designated body) would normally include the following steps:
(1) the Managing Authority defines which fisheries and aquaculture areas are eligible for CLLD and launches a call for local strategies;
(2) the local actors in eligible areas consider their interest to apply, form partnerships, define areas and develop their local strategies;
(3) the MA or its designated body receives applications and checks their formal eligibility;
(4) applications which meet formal eligibility requirements are evaluated for quality and ranked;
(5) the MA decides on the allocation of funding and formally recognises the selected applicants as FLAGs.
Criteria for formal eligibility used in step (3) should be based on requirements contained in the CPR and in the EMFF. Coherence with PA, OP and other strategic documents should also be part of formal eligibility check. In the OP, the MA should provide:
• a list of national or regional eligibility criteria the MA intends to use in step (3) if these go beyond the requirements of the Regulation,
• a list of selection criteria used to take decisions in steps (4) and (5).
Q2: What kind of criteria can be used to evaluate the quality of local strategies?
Selection criteria are the key tool to ensure a high quality of local strategies and eventually the selection of high quality projects by the FLAGs. The following examples of criteria can be useful:
- To what extent is the strategy focused on issues of greatest relevance for the area? While FLAGs should be free to choose between all five objectives of Art. 63 of the EMFF, the MA could prioritise strategies with a clear focus on a selected number of key issues.
- To what extent does the strategy respond to the needs and challenges of the area?
- Is the analysis of the area based on reliable data and indicators?
- Does the strategy demonstrate clearly the links between SWOT, needs, objectives, activities and outcomes? (Intervention logic)
- Are the objectives measurable and realistically achievable within the available budget and time frame?
- Is there evidence of the involvement of key local actors, including the fisheries sector?
- Does the strategy provide for strengthening links between different sectors and different types of actors, in particular fisheries? Does it create synergies?
- Is there evidence of the applicant’s capacity to deliver the outcomes? Is the action plan clear and robust?
- Is the use of resources (human, financial) justified in relation to the proposed action? What mobilisation of other resources (including private funding) is envisaged?
- How have horizontal issues (environment, gender equality) been addressed?
Q3: Should I use qualitative or quantitative criteria? What is the difference?
Some aspects of the strategy can be assessed using quantitative criteria, for instance number of jobs created, number of fishermen involved, amount of match-funding levered in etc. However, the quality of the strategy cannot be evaluated exclusively by numerical criteria and must involve a certain element of judgement.
Qualitative criteria for strategy selection could be used as in the example below (based on UK selection criteria for 2007-2013):
Criterion: selection criteria can fall into different categories, e.g. quality of partnership, relevance of strategy, economic criteria, social criteria etc.; here are just a few examples:
Scoring: (0-4) x weight. Evaluator must provide a brief justification for score.
Q4: Can I use a FLAG’s previous experience as a selection criterion?
A: The capacity of the FLAG to deliver the proposed strategy is an essential selection criterion. Experience from the 2007-2013 period would be a way to demonstrate that capacity. However, MAs should take care not to give unfair advantage to existing FLAGs. A possible solution would be to ask applicants to demonstrate that they have the capacity to deliver the strategy proposed. Experience from the previous period would only be one way of proving it.
Q5: What do I need to do when selecting multi-funded strategies?
A: In case of multi-funded strategies, common selection criteria should be used in order to ensure better integration of the funds and provide clear and simple guidance to the (F)LAGs. The EMFF specific requirements must, however, be taken into account.
This is the case, for example, of criteria concerning the quality of partnership.
• The CPR requires that the local action group is “composed of representatives of public and private local socio-economic interests, where at the decision-making level neither the public sector nor any single interest group shall represent more than 49 % of the voting rights” (CPR Art. 32).
• For groups delivering funding from the EMFF, an additional requirement is laid out in the EMFF Regulation: it must have, at the decision-making level, “a significant representation of the fisheries and/or aquaculture sectors” (EMFF Art. 61).
Q6: Can I include regional selection criteria in the OP?
In regionalised countries there can be reasons for using different strategy selection criteria in different regions. The MA could then present in the OP a list of the common national selection criteria, complemented by specific regional criteria with a justification for these differences.
The EMFF Regulation (art. 18 (g)) requires that the Operational Programme should contain “a list of criteria applied for selecting the fisheries and aquaculture areas” (section 5.1.2 of the OP Template). The purpose of this requirement is to explain the main focus of Union Priority 4 by indicating which areas Managing Authority envisages as most appropriate for the application of CLLD and why.
This set of questions is intended to help the MA in defining this focus and describing it in the OP. The following questions are addressed:
Q1: What should I write in the OP about criteria for selecting the fisheries and aquaculture areas?
A: According to the EMFF Regulation (Art. 3.2.5), a fisheries and aquaculture area is “an area with a sea, river or lake shore, including ponds or a river basin, with a significant level of employment in fisheries or aquaculture, that is functionally coherent in geographical, economic and social terms and is designated as such by a Member State”.
The MA could in principle designate all the fisheries and aquaculture areas as eligible for CLLD, but most MAs would focus EMFF funding on those areas where the application of CLLD would bring greatest benefits for fisheries communities, in relation to the challenges these areas face and their potential for growth and creation of jobs. In the OP the MA will have to specify which criteria it will use to make this policy choice. The intention is not to present a list of areas in the OP, since the definition of precise boundaries should be left to the local level (see below), but to explain what factors would be taken into account in determining whether a given area is eligible for CLLD or not.
Q2: What kind of criteria could I use?
A: Area selection criteria could include:
- Criteria describing the size and importance of the fishing and aquaculture sector (employment, numbers and size of boats or ponds, nature and type of fishing, landings/production size, value...);
- Criteria describing the character of the area: coastal, estuary, river or lake, protected areas, maximum and minimum population sizes, population density, population decline, remote areas;
- Criteria related to the coherence of the area of intervention – the possibility of having areas separated by lakes or dotted along a coast, the coverage of larger ports and settlements (see below).
In formulating these criteria the MA should use the information provided in the context indicators (required for section 2.2 of the OP Template).
Example: UK area selection criteria (2007-2013) include:
- Low population density
- Fisheries in decline
- Small fishing communities
- At least one active fishing port (England)
Q3: Why can I not provide a fixed list of areas in the OP?
A: The guidance to EMFF OP Template, provided by the Commission to complement the Implementing Regulation 771/2014, makes it clear that Managing Authorities should not present a closed list of areas in their OP (Section 5.1.2 “The OP should not contain a list of areas since the definition of precise boundaries of the area where a FLAG intends to implement its strategy should be left to the local level”). The list of criteria should be used to identify the types of areas that are eligible for support, but not the exact areas themselves.
By definition, Community-Led Local Development is a bottom-up process, whose success depends upon being able to forge effective alliances between local actors who share a set of common goals. This requires negotiations at local level to secure the real commitment of key organisations and stakeholders spread across the territory. The definition of the exact boundaries of the area will be the outcome of these negotiations. The criteria for designating eligible areas should not try to predetermine this or impose artificial solutions that may turn to be unworkable on the ground.
Q4: Can large ports (over 150.000 inhabitants) be considered eligible for CLLD?
A: In some countries most fishing employment and most job losses in fisheries occurs in large ports. If the MA considers that CLLD could be an effective tool to deal with the challenges in those areas, then this could be allowed. However, this exception must be accepted by the Commission in the Partnership agreement and must be justified in the Operational Programme, including an explanation from the MA on the method that will be used to avoid the dispersion of funds if such a large area becomes eligible.
Q5: How can I take regional differences into account when drawing out the criteria for identifying fisheries areas in my OP?
A: The challenges facing fishing and fishing areas can vary enormously within a single country. As a result, each region in a regionalised country may decide to use different criteria. In principle this is possible, as long as this approach is justified in the OP and the whole section does not exceed 7000 characters. A possible solution would be to present (in an annex to the OP) a table setting out the general criteria and the specific regional ones, if needed.
Q6: What considerations should guide the definition of criteria for designating fisheries areas?
A: When developing criteria for identifying eligible fisheries areas, the MAs need to bear in mind the following points:
- What am I trying to achieve with CLLD in fisheries areas and who am I trying to support? For example, are fishing communities the main target, or just an important part of broader coastal development? Do I want to support the whole fishing community or only those facing the most difficulties?
- How many resources are available for UP4 and how many FLAGs can be financed? Countries with limited resources in relation to the potential areas may wish to establish more focused area selection criteria.
- What impacts will the criteria have on different parts of the fishing community or activity of the FLAG? For example, criteria based on the number of boats may favour small scale fishing; those based on landings may favour larger scale fishing; population limits may exclude large ports with the most fishing employment or crucial markets for fisheries products.
Article 35.1 (a) of the Common Provisions Regulation states that support for Community Led Local Development shall cover the costs of preparatory support. Under the EMFF, preparatory support is one of the measures of Union Priority 4. It plays a very important role in ensuring a level playing field between existing and new partnerships and improving the quality of strategies.
This set of questions will help Managing Authorities to programme preparatory support under EMFF by addressing the following issues:
A: Yes. If the Member State decides to implement CLLD under UP4, then it must provide preparatory support. However, this can be done either via individual grants using UP 4, or via the provision of collective training and awareness raising activities such as training and seminars for all potential applicants using funding under technical assistance from either the 2007-2013 or the 2014-2020 period.
This set of questions concerns the provision of individual grants to potential beneficiaries, which should be foreseen as a measure under UP 4 in the EMFF OP.
FLAGs don't have an obligation to use this support since the more experienced groups may be ready to submit their strategy without applying for preparatory support. The CPR also clearly specifies that this support remain eligible even if the strategy developed by the beneficiary is not selected for funding.
Q2: What can be financed under preparatory support?
A: Preparatory support under UP 4 is intended primarily as grants for existing and potential Local Action Groups to help them strengthen the partnership and develop their local strategy.
Article 35.1 (a) of the CPR specifies that preparatory support consists of “capacity building, training and networking with a view to preparing and implementing a community-led local development strategy”
Q3: When can I start preparatory support?
A: To ensure an adequate quality of strategies, preparatory support should be made available as early as possible. This is particularly important for MS with new, inexperienced FLAGs. It is also important when FLAGs might also benefit from EAFRD funding, to ensure an early involvement of fisheries communities in the preparation of strategies, preventing their voice being lost in a broader approach.
Expenditure under preparatory support is eligible from the 1st January 2014, and some MAs may decide to launch it even before the Operational Programme is approved. MAs planning to start preparatory support before approval of the OP should ensure there is no national legislation in place that prevents them providing support before the OPs have been approved. They should also consult the Commission services about their proposals.
The following steps can be envisaged:
- ensure that the preparatory support is correctly reflected in the OP;
- prepare simple and transparent criteria and procedures for awarding the support in compliance with national law;
- set up a “shadow monitoring committee”;
- have the shadow monitoring committee approve the selection criteria and procedures for awarding preparatory support.
Actions that have been physically completed or fully implemented before the application is submitted for funding from EMFF are not admissible.
Q4: What should I put in place to enable preparatory support?
A: The MA should publish a call for expressions of interest, possibly together with the other EU funds implementing CLLD. The call should cover the following elements:
- Who can apply? The call should be open to existing local action groups as well as new actors who commit themselves to creating a local action group and to developing a local development strategy. The application will have to be led by a legally constituted body which can receive public funds, but the partnership does not have to be constituted before the application for preparatory support.
- Which types of areas are eligible? Managing Authorities may restrict eligibility to certain types of areas, in line with the area selection criteria described in the OP.
- One or more applicant per area? The MA should indicate whether it will accept several applications covering the same area or not, and – if such an overlap is acceptable – how they will decide which applicant will be selected.
- The actions that can be financed (see Q2 above).
- The budget available.
- The time span for implementation.
- An application form for the presentation of expressions of interest (see Q5 below).
- The criteria and procedures for selection (see Q6 below).
Preparatory support is meant to speed up and facilitate the selection of the final strategies, so it is essential that the procedures for selection are simple, transparent and easy to apply. The applications should be in a fairly synthetic and standard form, requiring relatively little qualitative judgement. The MA can either evaluate the applications internally or they can appoint external independent experts to do the job.
The criteria and procedures must be adopted by the Monitoring Committee (the “shadow monitoring committee” before the OP is approved, see Q3 above).
Q5: What should be included in the expression of interest?
A: A short standard form for candidates to express their interest in preparatory support could cover:
- name and contact of the existing partnership or of the local entity that commits to creating the partnership if finally selected;
- evidence of the responsible organisation’s capacity to manage public funds;
- signed expressions of support from other relevant local actors;
- a brief description of the local area of the potential FLAG – to be further defined in the process of preparing the strategy;
- preliminary ideas around which the local strategy may be built and the main participants of the partnership that would be formed;
- an outline action plan specifying the main tasks that will be carried out through preparatory support and an approximate timetable.
Q6: What criteria can I use to allocate preparatory support?
A: Unlike the selection of the final strategies and partnerships, the decisions about preparatory support can be based on simpler criteria, limited to basic information about the suitability of the proposed area and the capacity and representativeness of the proposed partnership. For example, criteria could cover one or more of the following points:
- the coherence of the area proposed for the implementation of the strategy with the priorities of the Operational Programme;
- the commitment of the lead organisation to prepare the strategy and form the partnership as shown by a signed letter of intent;
- evidence provided by the lead organisation of its capacity to manage public funds and experience in local development;
- the interest expressed by representatives of the local community in forming a partnership; one would expect signed expressions of interest from the main representatives of the fishing community and other important local sectors and actors;
- the presentation of a viable plan including the actions to be undertaken and their cost, as well as an indication of who will undertake the drafting of the strategy; special attention should be paid to actions envisaged to ensure the bottom-up character of the strategy;
- a calendar for the use of the preparatory support.
Q7: How should I select applications for preparatory support?
A: In selecting the applicants who will get preparatory support, the MA will have to take decision on the following options:
- standard or variable grant. As most potential FLAGs will have to go through the same process, it may be justified to allocate the same amount of funding to all applicants. An alternative would be to adjust the grant in relation to the size of area, the scope of planned activities or an evaluation score of the application.
- minimum threshold or ranking. The MA may decide to grant support to all applicants meeting a minimum quality threshold, or it may rank the applications by evaluation score and go down the list until the total budget available has been allocated.
1. Are there changes in State aid rules applicable to the fishery sector for the period 2014-2020?
Certain fishery-specific State aid instruments have expired and been reviewed (de minimis and block exemption Regulations) to reflect the priorities of the new CFP. However, the basic rules of interaction between the financial framework (EMFF) and State aid rules remain the same.
- The fishery and aquaculture sector is subject to competition rules (which includes State aid) only to the extent determined by the legislators, as set out in Article 42 of the Treaty on the Functioning of the European Union (TFEU). Article 42 TFEU refers to the production and trade of agriculture products (which covers the production, processing and marketing of fishery and aquaculture products).
- Article 8(2) EMFF foresees that State aid rules do not apply to payments made by Member States which respect the EMFF rules and are covered by Article 42 TFEU. A similar rule was already in the EFF.
Accordingly, if a CLLD activity is financed under the EMFF framework and is "fishery-related" (i.e. Article 42 TFUE), State aid rules do not apply. On the contrary, if the activity is not "fishery-related", State aid rules apply.
As mentioned above, this rule is not new.
As far as CLLD projects co-financed by the EMFF are concerned, it is therefore necessary to determine on a case-by-case basis whether they are "fishery-related" to assess whether State aid rules apply.
2. Which kind of operations financed under the EMFF should be considered as "fishery-related", thereby being excluded from the application of State aid rules?
As mentioned above, this is covered by Article 42 TFEU. Operations which should be considered as "fishery-related" are those which concern the production, processing and marketing of fishery and aquaculture products.
Most of the operations co-financed under the EMFF are fishery-related, with the exception of measures aimed at fostering the implementation of the IMP (Union Priority (UP) 6), as well as some CLLD projects (UP 4).
As projects financed under UP 4 of the EMFF (CLLD) are not necessarily fishery-related, they need to be examined on a case-by-case basis in order to determine whether they are "fishery-related" or not.
Example: A family group of fishermen owns an old house which they want to transform into a day-care centre for their community's elderly people. The initiative would adopt the legal form of a cooperative. Such activity is clearly not "fishery-related", since it is not related to the production, processing and marketing of fisheries and aquaculture products.
Projects which are not fishery-related do not benefit from the exemption of the application of State aid rules provided for under Article 8(2) EMFF. As a consequence, general (and not fishery-specific) State aid rules apply to them.
The fact that State aid rules do apply to the operation does not mean that it necessarily needs to be notified to the Commission. If the amount involved is below 200 000 EUR per beneficiary over a period of 3 years, the General de minimis Regulation will apply. If the amount is higher than 200 000 EUR per beneficiary over a period of 3 years, the Managing Authority will need to examine whether the project could fall under the General Block Exemption Regulation. In this case, the Commission needs to be informed of the project but no notification is required. If the project does not meet the conditions to benefit from the General de minimis Regulation or General Block Exemption Regulation, it will need to be notified to the Commission (which means that it cannot be implemented before the Commission's decision).
See point 5 below and the summary table at the end of the pdf for an overview of the various possible processes.
3. The Fishery-specific Block Exemption Regulation (FIBER) does not contain a specific Article on CLLD. Under which conditions would these operations be considered exempted from State aid notification?
See questions 1 and 2.
The Fishery-specific Block Exemption Regulation is a State aid instrument. It only applies to measures which meet the conditions to be qualified as State aid. The main objective of FIBER is to exempt from the notification requirement aid measures which are financed outside the EMFF framework (exclusively on the basis of national funds) but which could have been eligible for funding under the EMFF.
If a CLLD activity financed under the EMFF is "fishery-related", State aid rules do not apply to it pursuant to Article 8(2) EMFF.
If a CLLD activity financed under the EMFF is not "fishery-related", general State aid rules apply to it and not fishery-specific State aid rules such as FIBER.
4. If a fishery-related operation does not fall under FIBER can it still benefit from the GBER or de minimis exemption? If yes, under which circumstances?
As explained above, if a CLLD activity financed under the EMFF is "fishery-related", State aid rules do not apply to it pursuant to Article 8(2) EMFF.
5. What does the FLAG and the Managing Authority need to do once an activity is considered to be subject to State aid rules?
This would be the case of "non fishery-related" CLLD projects financed under the EMFF, and which therefore fall under General State aid rules.
The fact that State aid rules do apply to the operation does not mean that it needs to be notified to the Commission.
If the amount involved is below 200 000 EUR per beneficiary over a period of 3 years, the project will be able to benefit from the General de minimis Regulation.
If the amount is higher, it needs to be examined whether the project could fall under the General Block Exemption Regulation. In this case, the Commission needs to be informed of the project but no notification is required.
Finally, if the project does not meet the conditions to benefit from the General de minimis or General Block Exemption Regulations, it will need to be notified to the Commission (which means that it cannot be implemented before the Commission's decision).
Reminder: as far as the application of State aid rules is concerned, and in particular for steps 2 and 3, managing authorities need to be in contact with the national authority in charge of State aid rules.
6. In UP 4, individual projects are selected by Fisheries Local Action Groups (FLAGs), in line with a local development strategy. FLAGs may support projects which are non-fishery related and do not meet the conditions to benefit from the General de minimis and the General Block Exemption Regulations.
a) Will MAs need to start the notification procedures to the Commission for each of those projects?
Yes. These projects need to be notified to the Commission and cannot be implemented before the Commission's decision. This will concern (non-fishery) projects where the amount of public aid is higher than the threshold of the General de minimis Regulation (200 000 EUR per beneficiary over a period of 3 years).
Please note that in case the projects are covered by the General Block Exemption Regulation, they are exempted from the notification requirement.
b) Is it possible to group those project under a specific aid scheme, so that only the scheme needs to be notified to the European Commission?
Yes it is possible to notify schemes. Under State aid rules, ‘aid scheme’ means any act on the basis of which, without further implementing measures being required, individual aid awards may be made to undertakings defined within the act in a general and abstract manner and any act on the basis of which aid which is not linked to a specific project may be granted to one or several undertakings for an indefinite period of time and/or for an indefinite amount.
It is for the national authority to ensure that these conditions are respected.
c) Can such a scheme cover a certain type of projects financed by a single FLAG, or by several FLAGs?
If the conditions of the above-mentioned definition can be met, yes.