Validation of legal entities and financial capacity check

Francisco DE LA TORREHead of Sector

Participant Validation and Support

September 8th, 2015

Horizon 2020 Coordinators' Day

Outline of the Presentation

1. Validation workflow2. Documents for validation 3. The LEAR4. Financial Viability5. Bank accounts6. Messages and documents via PP7. Guidance Documents

New participants via the

Beneficiary Registeron the

Participant Portal

On the basis of documentsREA VS &DG BUDGvalidate

data Attribution of status and

validatedPIC number

Mandatory LEAR

nominationprocess on basis of

blue-ink signature

Ifneeded, financialviabilitycheck

1. Validation Workflow (i)

REGISTER LEAR FVCH2020Status

Core Data

VALIDATION

COMMUNICATION VIA PARTICIPANT PORTAL'SBENEFICIARY REGISTER

1. Validation Workflow (ii)

•The validation of a participant is unique and stands throughout the entire H2020 programme. 40.000 FP7 validated entities were migrated into H2020 when programme was launched

•During the validation of a legal entity, the REA VS verifies: (i) legal existence, (ii) H2020 status of an applicant, (iii) Mandate of the LEAR and (iv) financial viability (when required). Validation is generally performed on the basis of supporting documents

•Validation is required for all beneficiaries and third parties. The PIC of third parties, usually included in the consortium during grant preparation, must be introduced in the Participant Portal Grant Management Service (PPGMS).

NB: If the third party is a brand new participant, it has to go through the registration in order to obtain the PIC

•Legal entities form (template to be completed and signed)

•VAT extract (if applicable)

•Copies of Registration extract (for private organisations), law/decree (for public entities), treaty (for international organisations)

•Copies of Statutes (to verify non-profit status)

2. Documents for validation (i)

Research organisations:

•2 conditions have to be met: Entity must be non-profit. This status is verified by the REA

VS Entity performs research activities. This status is based on

self-declaration (no legal documents required)

NB Definition of non-profit organisations:

"A legal entity which, by its legal form, is non-profit making AND/OR which has a statutory obligation not to distribute profits to its shareholders or individual members "

2. Documents for validation (ii)

2. Documents for validation (iii)

SME status via the web-based SME wizard(no documents required for VS)

•SME wizard is part of the Beneficiary Register

•More than 22,000 self-assessments have been done via the wizard

•REA VS will carry out ex-post checks of the SME status on a random basis and/or upon request of the operational services

In this case, supporting documents will be required

3. The LEAR (i)

• Under H2020 the LEAR nomination is mandatory because of the electronic management principle governing programme implementation. The LEAR:

(i) Notifies the EU of changes in legal data/status;

(ii) Submits FVC documents if required;

(iii) Nominates in the PP the persons who act as legal representatives and signatories for the organisation and

(iv) Nominates in the PP the persons who sign financial statements.

(v) Informs own staff about the organisation's PIC

•The re-validation of FP7 LEAR's started in March 2014. The REA VS contacted all most recurrent FP7 clients and has already validated more than 19,000 LEARs with extended H2020 mandate.

3. The LEAR (ii)

Documents required for LEAR's extended mandate:

1.Letter of Appointment (duly signed by legal representative)

2.Roles and Duties (duly signed by LEAR and legal representative)

3.Declaration of Consent (duly signed by legal representative)

4.Copy ID card of the LEAR

5.Copy ID card of the legal representative

6.Proof of empowerment of the legal representative

Original signed forms (pdf copies and electronic signatures are NOT accepted) to be sent via postal mail to:Research Executive Agency-Validation Services

COV2 – 13/132B-1049 BRUSSELS

Belgium

3. The LEAR (iii)

Once LEAR data validated in the Beneficiary Register:

1.The LEAR's name and email address are sent to service-desk for creation of the LEAR account

Name and email for LEAR account shall match name and email address of the known ECAS account

New LEAR or new email= new account

2.REA VS will confirm the LEAR appointment

3.PIN code is usually sent by service-desk via postal mail

Urgent request for PIN code: send an email to EC-Research-IT-helpdesk@ec.europa.eu OR

Provide in the LEAR appointment form the mobile phone number of the LEAR, which will be used by the service-desk only to communicate the PIN code

NEW

•In general, the financial capacity is checked if:

The beneficiary is a coordinator, and The requested EU funding for the project is ≥ 500 000

EUR.

•Applicants for mono-beneficiary grants are not considered as 'coordinators'

•A financial viability check can be performed on other beneficiaries at the request of the EU service in charge of the project

4. Financial Viability Check (i)

• The FVC assessment is carried out by the REA via the Beneficiary Register. Ratios (weak, acceptable, good) are displayed online

• At proposal level, coordinators are asked to self-declare on their financial capacity. For this self-declaration a tool is available in the Participant Portal, embedding the same calculations of the formal FVC. Those results, though, are not binding for EU services and if needed later on, a FVC will be performed by the REA VS against supporting documents

• Final decision on the participation of an applicant with a 'weak' FVC result (based on the ratios) is taken by the EU services responsible for each individual project

4. Financial Viability Check (ii)

5. Bank accounts

• Search for bank account is available in Participant Portal Grant Management Service (PPGMS) when session is open

• If no account exists, PPGMS displays explanatory message on how to request the validation of a BA

• Coordinator contact should inform the LEAR to start BA creation request (upload of documents via the Beneficiary Register)

• REA VS will launch BA creation and inform LEAR when validation is completed Pdf copies are accepted. Original forms not required

6. Messages and documents via PP (i)

• Upload of documents for validation can be done from the Participant Portal, under the tab corresponding to the specific document requested (pdf copies accepted, except LEAR)

• For doing so, select 'my organisations' on the Participant Portal, and click on 'View Organisation' or 'Modify Organisation'

• This can be done by the LEAR (for a valid PIC) or self-registrant (for a declared PIC)

• Check messages under PIC for follow-up requests from REA VS

6. Messages and documents via PP (ii)

6. Messages and documents via PP (iii)

• Messages can be exchanged via the Participant Portal and can be seen in the system.

• Messages from the REA VS are also sent as email to the participant.

6. Messages and documents via PP (iv)

7. Guidance documents

• The H2020 Grants Manual is published on the Participant Portal http://ec.europa.eu/research/participants/portal/desktop/en/funding/reference_docs.html#h2020-grants-manual-lev

• It includes a dedicated section on the legal and financial validation rules as well as the LEAR role and tasks.

Thank you for your attention!

Questions?