Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002

Where the decision on the exclusion and/or financial penalty has been taken on the basis of a preliminary classification as referred to in paragraph 2 of this Article, the publication shall indicate that there is no final judgment or, where applicable, final administrative decision. In those cases, information about any appeals, their status and their outcome, as well as any revised decision of the contracting authority, shall be published without delay. Where a financial penalty has been imposed, the publication shall also indicate whether that penalty has been paid.

The decision to publish the information is taken by the contracting authority either following the relevant final judgment or, where applicable, final administrative decision, or following the recommendation of the panel referred to in Article 108, as the case may be. That decision shall take effect three months after its notification to the economic operator.

The information published shall be removed as soon as the exclusion has come to an end. In the case of a financial penalty, the publication shall be removed six months after payment of that penalty.

In accordance with Regulation (EC) No 45/2001, where personal data is concerned, the contracting authority shall inform the economic operator of its rights under the applicable data protection rules and of the procedures available for exercising those rights.

• (a)where it is necessary to preserve the confidentiality of an investigation or of national judicial proceedings;

• (b)where publication would cause disproportionate damage to the economic operator concerned or would otherwise be disproportionate on the basis of the proportionality criteria set out in paragraph 3 of this Article and to the amount of the financial penalty;

• (c)where a natural person is concerned, unless the publication of personal data is exceptionally justified, inter alia, by the seriousness of the conduct or its impact on the Union's financial interests. In such cases, the decision to publish the information shall duly take into consideration the right to privacy and other rights provided for in Regulation (EC) No 45/2001.

Article 107

Rejection from a given procurement procedure

• (a)is in an exclusion situation established in accordance with Article 106;

• (b)has misrepresented the information required as a condition for participating in the procedure or has failed to supply that information;

• (c)was previously involved in the preparation of procurement documents where this entails a distortion of competition that cannot be remedied otherwise.

Article 108

The early detection and exclusion system

Information shall be entered in the database by the relevant contracting authority in the context of its ongoing procurement procedures and existing contracts after notifying the economic operator concerned. Such notification may be exceptionally deferred, where there are compelling legitimate grounds to preserve the confidentiality of an investigation or of national judicial proceedings, until such compelling legitimate grounds to preserve the confidentiality cease to exist.

In accordance with Regulation (EC) No 45/2001, any economic operator subject to the early detection and exclusion system shall have the right to be informed of the data stored in the database upon its request to the Commission.

The information contained in the database shall be updated, where appropriate, following a rectification or an erasure or any modification of data. It shall only be published in accordance with Article 106(16) and (17) of this Regulation.

• (a)OLAF in accordance with Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council ([^E0018]) where an OLAF investigation in progress shows that it might be appropriate to take precautionary measures to protect the Union's financial interests, with due regard to the respect for procedural and fundamental rights, and to the protection of whistle-blowers;

• (b)an authorising officer of the Commission, of a European office set up by the Commission or of an executive agency in case of presumed grave professional misconduct, irregularity, fraud, corruption or serious breach of contract;

• (c)an institution, a European office or an agency other than those referred to in point (b) of this paragraph or a body in the cases of presumed grave professional misconduct, irregularity, fraud, corruption or serious breach of contract;

• (d)entities implementing the budget in accordance with Article 59 of this Regulation, in cases of detected fraud and/or irregularity, where required by sector-specific rules;

• (e)entities implementing the budget in accordance with Article 60 of this Regulation, in cases of detected fraud and/or irregularity.

• (a)the identification of the economic operator concerned;

• (b)a summary of the risks detected or the facts in question;

• (c)information that could assist the authorising officer in carrying out the verification referred to in paragraph 4 of this Article or in taking a decision on exclusion as referred to in Article 106(1) or (2), or a decision to impose a financial penalty as referred to in Article 106(13);

• (d)where applicable, any special measures necessary to ensure the confidentiality of the information transmitted, including measures for the safeguarding of evidence to protect the investigation or the national judicial proceedings.

In carrying out this verification, the authorising officer shall exercise his or her powers as foreseen under Article 66 and shall not go beyond what is foreseen in the terms and conditions of the procurement documents and contractual provisions.

The retention period for the information transmitted in accordance with paragraph 3 of this Article shall not exceed one year. If, during this period, the contracting authority requests the panel to issue a recommendation in an exclusion case, the retention period may be extended until such time as the contracting authority has taken a decision.

• (a)a standing high-level independent chair;

• (b)two representatives of the Commission as the owner of the system, who shall express a joint position; and

• (c)one representative of the requesting contracting authority.

The composition of the panel shall ensure the appropriate legal and technical expertise.

The panel shall be assisted by a permanent secretariat, provided by the Commission, which shall ensure the continuous administration of the panel.

• (a)the requesting contracting authority shall refer the case to the panel with the necessary information referred to in paragraph 3 of this Article, the facts and findings referred to in Article 106(2) and the alleged exclusion situation;

• (b)the panel shall notify the economic operator without delay of the facts in question and their preliminary classification in law, which may qualify as an exclusion situation referred to in points (c), (d), (e) and (f) of Article 106(1) and/or may lead to the imposition of a financial penalty. The panel shall simultaneously make the same notification to the other contracting authorities;

• (c)before adopting any recommendation, the panel shall give the economic operator and the notified contracting authorities the opportunity to submit observations. The economic operator and the notified contracting authorities shall have at least 15 days to submit their observations;

• (d)in the cases referred to in points (d) and (f) of Article 106(1), the notification referred to in point (b) of this paragraph and the opportunity referred to in point (c) of this paragraph may be exceptionally deferred where there are compelling legitimate grounds to preserve the confidentiality of an investigation or of national judicial proceedings, until such compelling legitimate grounds to preserve the confidentiality cease to exist;

• (e)where the request of the contracting authority is based, inter alia, on the information provided by OLAF, that Office shall cooperate with the panel in accordance with Regulation (EU, Euratom) No 883/2013, with due regard to the respect for procedural and fundamental rights, and to the protection of whistle-blowers;

• (f)the panel shall adopt its recommendation within 45 days from the receipt of the request of the contracting authority. Where the panel requests additional information from the economic operator, that period shall be extended by up to 15 days. In exceptional and duly justified cases, the panel may further extend the period to adopt its recommendation by up to one month. Where the economic operator fails to submit its observations or supply requested information within the time limit specified, the panel may proceed with the adoption of its recommendation.

• (a)the facts or findings referred to in Article 106(2) and their preliminary classification in law;

• (b)an assessment of the need to impose a financial penalty and its amount;

• (c)an assessment of the need to exclude the economic operator concerned and, in that case, the suggested duration of such an exclusion;

• (d)an assessment of the need to publish the information related to the economic operator who is excluded and/or subject to a financial penalty;

• (e)an assessment of remedial measures taken by the economic operator, if any.

Where the contracting authority envisages taking a more severe decision than what has been recommended by the panel, it shall ensure that such a decision is taken with due respect for the right to be heard and for the rules of personal data protection.

The panel shall notify the requesting contracting authority without delay of its revised recommendation, following which the contracting authority shall review its decision.

The information referred to in the first subparagraph of this paragraph shall be provided with due regard to confidentiality requirements and shall, in particular, not allow for the identification of the economic operator concerned.

Article 110

Award of contracts

• (a)the tender complies with the minimum requirements specified in the procurement documents;

• (b)the candidate or tenderer is not excluded under Article 106 or rejected under Article 107, and

• (c)the candidate or tenderer meets the selection criteria specified in the procurement documents and is not subject to conflicting interests which may negatively affect the performance of the contract.

For the lowest cost method, the contracting authority shall use a cost-effectiveness approach including life-cycle costing.

For the best price-quality ratio, the contracting authority shall take into account the price or cost and other quality criteria linked to the subject matter of the contract.

Article 111

Submission, electronic communication and evaluation

The Commission shall report regularly to the European Parliament and to the Council on the progress of the implementation of this paragraph.

• (a)requests to participate and tenders which do not comply with the time limit for receipt, without opening them;

• (b)tenders received already open, without examining their content.

Except in duly justified cases, the evaluation committee or the contracting authority shall ask candidates or tenderers to provide additional material or missing documents, to clarify the documents supporting exclusion and selection criteria or to explain an abnormally low tender, within the time limit it specifies.

Article 112

Contacts during the procurement procedure

Article 113

Award decision and information to candidates or tenderers

For the award of specific contracts under a framework contract with reopening of competition, the contracting authority shall inform the tenderers of the result of the evaluation.

• (a)the name of the tenderer, or tenderers in the case of a framework contract, to whom the contract is awarded and, except in the case of a specific contract under a framework contract with reopening of competition, the characteristics and relative advantages of the successful tender, the price paid or contract value, whichever is appropriate;

• (b)the progress of negotiation and dialogue with tenderers.

However, the contracting authority may decide to withhold certain information where its release would impede law enforcement, would be contrary to the public interest or would prejudice the legitimate commercial interests of economic operators or might distort fair competition between them.

Article 114

Cancellation of the procurement procedure

The contracting authority may, before the contract is signed, cancel the procurement procedure without the candidates or tenderers being entitled to claim any compensation.

The decision shall be justified and brought to the attention of the candidates or tenderers as soon as possible.

Article 114a

Performance and modifications of the contract

• (a)for additional works, supplies or services by the original contractor that have become necessary and that were not included in the initial procurement, where the following conditions are fulfilled:

• (i)a change of contractor cannot be made for technical reasons linked to interchangeability or interoperability requirements with existing equipment, services or installations;

• (ii)a change of contractor would cause substantial duplication of costs for the contracting authority; and

• (iii)any increase in price, including the net cumulative value of successive modifications, does not exceed 50 % of the initial contract value;

• (b)where the following conditions are fulfilled:

• (i)the need for modification has been brought about by circumstances which a diligent contracting authority could not foresee; and

• (ii)any increase in price does not exceed 50 % of the initial contract value;

• (c)where the value of the modification is below the following thresholds:

• (i)the thresholds referred to in Article 118(1) and the delegated acts adopted pursuant to Article 190(2) in the field of external actions applicable at the time of the modification; and

• (ii)10 % of the initial contract value for public service and supply contracts and works or services concession contracts and 15 % of the initial contract value for public works contracts;

• (d)where the minimum requirements of the initial procurement procedure are not altered. In that case any ensuing modification of value shall comply with the conditions set under point (c) of this subparagraph, unless such modification of value results from the strict application of the procurement documents or contractual provisions.

Points (a), (c) and (d) of the first subparagraph of this paragraph may also apply to framework contracts.

The initial contract value shall not take into account price revisions.

The net cumulative value of several successive modifications under point (c) of the first subparagraph of this paragraph shall not exceed any threshold referred to therein.

The contracting authority shall apply the ex post publicity measures set out in Article 103.

Section 4 Guarantees and corrective action

Article 115

Guarantees

• (a)limit the financial risks connected with payment of pre-financing;

• (b)ensure compliance with substantial contractual obligations in the case of works, supplies or complex services;

• (c)ensure full performance of the contract during the contract liability period.

Article 116

Substantial errors, irregularities or fraud

Performance of contracts may also be suspended in order to verify whether presumed substantial errors, irregularities or fraud have occurred.

Where substantial errors, irregularities or fraud are attributable to the contractor, the contracting authority may, in addition, refuse to make payments or recover amounts unduly paid, to an extent proportionate to the seriousness of the substantial errors, irregularities or fraud.

CHAPTER 2 Provisions applicable to contracts awarded by the institutions on their own account

Article 117

The contracting authority

Those institutions shall delegate, in accordance with Article 65, the necessary powers for the exercise of the function of contracting authority.

Article 118

Thresholds applicable and standstill period

Article 119

Rules on access to procurement

Participation in procurement procedures shall be open on equal terms to all natural and legal persons within the scope of the Treaties and to all natural and legal persons established in a third country which has a special agreement with the Union in the field of public procurement under the conditions laid down in that agreement. It shall also be open to international organisations.

The Commission shall be empowered to adopt delegated acts in accordance with Article 210 concerning detailed rules on the evidence to be provided in relation to access to procurement.

Article 120

Procurement rules of the World Trade Organisation

Where the plurilateral Agreement on Government Procurement concluded within the World Trade Organisation applies, the procurement procedure shall also be open to economic operators established in the states which have ratified that agreement, under the conditions laid down therein.

TITLE VI GRANTS

CHAPTER 1 Scope and form of grants

Article 121

Scope of grants

• (a)an action intended to help achieve a Union policy objective;

• (b)the functioning of a body which pursues an aim of general Union interest or has an objective forming part of, and supporting, a Union policy ('operating grants').

Grants shall be covered either by a written agreement or by a Commission decision notified to the successful applicant of a grant.

The Commission may establish secure electronic systems for exchanges with the beneficiaries.

The Commission shall be empowered to adopt delegated acts in accordance with Article 210 concerning the detailed specification of the scope of grants, and concerning rules determining whether grant agreements or grant decisions are to be used. Furthermore, the Commission shall be empowered to adopt delegated acts in accordance with Article 210 concerning details of the electronic exchange system, including the conditions under which documents submitted by means of such systems, including grant agreements, are to be deemed originals and to have been signed, and the use of framework partnerships.

• (a)expenditure on the members and staff of the institutions and contributions to the European schools;

• (b)public contracts as referred to in Article 101, aid paid as macro-financial assistance, and budget support;

• (c)financial instruments, as well as shareholdings or equity participation in international financial institutions such as the European Bank for Reconstruction and Development (EBRD) or specialised Union bodies such as the European Investment Fund;

• (d)contributions paid by the Union as subscriptions to bodies of which it is a member;

• (e)expenditure implemented under shared management and indirect management within the meaning of Articles 58, 59 and 60, unless specified otherwise in the financial rules applicable to the budget of the entities or persons entrusted pursuant to point (c) of Article 58(1) or in delegation agreements;

• (f)contributions to executive agencies referred to in Article 62, made by virtue of each agency's constitutive act;

• (g)expenditure relating to fisheries markets as referred to in point (f) of Article 3(2) of Council Regulation (EC) No 1290/2005 of 21 June 2005 on the financing of the common agricultural policy ([^E0020]);

• (h)repayment of travel and subsistence expenses incurred by, or where appropriate any other indemnities paid to, persons invited or mandated by the institutions;

• (i)prizes given as rewards for a contest, to which Title VII of Part One applies;

• (j)contributions to European political parties referred to in Title VIII of Part Two.

Such rebates and subsidies shall be subject to the provisions of this Title, with the exception of the following:

• (a)the co-financing principle as set out in Article 125(3);

• (b)the no-profit principle as set out in Article 125(4);

• (c)for actions where the objective is to reinforce the financial capacity of a beneficiary or to generate an income, the assessment of the financial capacity of the applicant as referred to in Article 132(1).

Article 122

Beneficiaries

• (a)entities forming the beneficiary in accordance with paragraph 1;

• (b)entities that satisfy the eligibility criteria and that do not fall within one of the situations referred to in Article 131(4) and that have a link with the beneficiary, in particular a legal or capital link, which is neither limited to the action nor established for the sole purpose of its implementation.

Article 123

Forms of grants

• (a)reimbursement of a specified proportion of the eligible costs, referred to in Article 126, actually incurred;

• (b)reimbursement on the basis of unit costs;

• (c)lump sums;

• (d)flat-rate financing;

• (e)a combination of the forms referred to in points (a) to (d).

Article 124

Lump sums, unit costs and flat-rate financing

Where the maximum amount per grant does not exceed the amount of a low value grant, the authorisation may be given by the authorising officer responsible.

• (a)justification concerning the appropriateness of such forms of financing with regard to the nature of the supported actions or work programmes, as well as to the risks of irregularities and fraud and costs of control;

• (b)identification of the costs or categories of costs covered by lump sums, unit costs or flat-rate financing, which shall exclude ineligible costs under the applicable Union rules;

• (c)description of the methods for determining lump sums, unit costs or flat-rate financing, and of the conditions for reasonably ensuring that the no-profit and co-financing principles are complied with and that double financing of costs is avoided. Those methods shall be based on:

• (i)statistical data or similar objective means; or

• (ii)a beneficiary-by-beneficiary approach, by reference to certified or auditable historical data of the beneficiary or to its usual cost accounting practices.

If the compliance of the beneficiary's usual cost accounting practices with the conditions referred to in paragraph 2 has been established ex ante, the amounts of lump sums, unit costs or flat-rate financing determined by application of those practices shall not be challenged by ex post controls.

The authorising officer responsible may consider that the usual cost accounting practices of the beneficiary are compliant with the conditions referred to in paragraph 2 if they are accepted by national authorities under comparable funding schemes.

CHAPTER 2 Principles

Article 125

General principles applicable to grants

The first subparagraph shall not apply to:

• (a)actions the objective of which is the reinforcement of the financial capacity of a beneficiary, or actions which generate an income to ensure their continuity after the period of Union financing provided for in the grant decision or agreement;

• (b)study, research or training scholarships paid to natural persons;

• (c)other direct support paid to natural persons most in need, such as unemployed persons and refugees;

• (d)grants based on flat rates and/or lump sums and/or unit costs where these comply with the conditions set out in Article 124(2);

• (e)low value grants.

Where a profit is made, the Commission shall be entitled to recover the percentage of the profit corresponding to the Union contribution to the eligible costs actually incurred by the beneficiary to carry out the action or work programme.

The receipts referred to in the first subparagraph shall be limited to income generated by the action or work programme, as well as financial contributions specifically assigned by donors to the financing of the eligible costs.

In the case of an operating grant, amounts dedicated to the building up of reserves shall not be taken into account for the purpose of verifying compliance with the no-profit principle.

Article 126

Eligible costs

Grants shall not exceed the eligible costs.

• (a)they are incurred during the duration of the action or of the work programme, with the exception of costs relating to final reports and audit certificates;

• (b)they are indicated in the estimated overall budget of the action or work programme;

• (c)they are necessary for the implementation of the action or of the work programme which is the subject of the grant;

• (d)they are identifiable and verifiable, in particular being recorded in the accounting records of the beneficiary and determined according to the applicable accounting standards of the country where the beneficiary is established and according to the usual cost accounting practices of the beneficiary;

• (e)they comply with the requirements of applicable tax and social legislation;

• (f)they are reasonable, justified, and comply with the principle of sound financial management, in particular regarding economy and efficiency.

Without prejudice to the basic act and in addition to paragraph 2, the following categories of costs shall be eligible where the authorising officer responsible has declared them as such under the call for proposals:

• (a)costs relating to a pre-financing guarantee lodged by the beneficiary of the grant, where that guarantee is required by the authorising officer responsible pursuant to Article 134(1);

• (b)costs relating to external audits where such audits are required in support of the requests for payments by the authorising officer responsible;

• (c)value added tax ("VAT") where it is not recoverable under the applicable national VAT legislation and is paid by a beneficiary other than a non-taxable person as defined in the first subparagraph of Article 13(1) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax ([^E0023]);

• (d)depreciation costs, provided they are actually incurred by the beneficiary;

• (e)salary costs of the personnel of national administrations to the extent that they relate to the cost of activities which the relevant public authority would not carry out if the project concerned were not undertaken.

• (a)the entities concerned are identified in the grant agreement or decision;

• (b)the entities concerned abide by the rules applicable to the beneficiary under the grant agreement or decision with regard to eligibility of costs and rights of checks and audits by the Commission, OLAF and the Court of Auditors.

Article 127

Co-financing in kind

Such contributions shall not exceed:

• (a)either the costs actually incurred by third parties and duly supported by accounting documents;

• (b)or, in the absence of such documents, the costs that correspond to those generally accepted on the market in question.

Contributions in kind shall be presented separately in the estimated budget to reflect the total resources allocated to the action. Their unit value shall be evaluated in the provisional budget and shall not be subject to subsequent changes.

Contributions in kind shall comply with national tax and social security rules.

Article 128

Transparency

That work programme shall be implemented through the publication of calls for proposals, except in duly justified exceptional cases of urgency or where the characteristics of the beneficiary or of the action leave no other choice for a given action, or where the beneficiary is identified in a basic act.

The first subparagraph shall not apply to crisis management aid, civil protection operations or humanitarian aid operations.

Those dates shall be fixed on the basis of the following periods:

• (a)for informing all applicants of the outcome of the evaluation of their application, a maximum of six months from the final date for submission of complete proposals;

• (b)for signing grant agreements with applicants or notifying grant decisions to them, a maximum of three months from the date of informing applicants they have been successful.

Those periods may be adjusted in order to take into account any time needed to comply with specific procedures that may be required by the basic act in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council ([^E0024]) and may be exceeded in exceptional, duly justified cases, in particular for complex actions, where there is a large number of proposals or delays attributable to the applicants.

The authorising officer by delegation shall report in his or her annual activity report on the average time taken to inform applicants, sign grant agreements or notify grant decisions. In the event of the periods referred to in the second subparagraph being exceeded, the authorising officer by delegation shall give reasons and, where not duly justified in accordance with the third subparagraph, shall propose remedial action.

Article 129

Principle of non-cumulative award

A beneficiary may be awarded only one operating grant from the budget per financial year.

The applicant shall immediately inform the authorising officers of any multiple applications and multiple grants relating to the same action or to the same work programme.

In no circumstances shall the same costs be financed twice by the budget.

Article 130

Principle of non-retroactivity

In such cases, costs eligible for financing shall not have been incurred prior to the date of submission of the grant application, except in duly justified exceptional cases as provided for in the basic act or in the event of extreme urgency for crisis management aid, civil protection operations and humanitarian aid operations, or in situations of imminent or immediate danger threatening to escalate into armed conflict or to destabilise a country, whereby an early engagement by the Union would be of major importance in promoting conflict prevention.

No grant may be awarded retroactively for actions already completed.

The Commission shall be empowered to adopt delegated acts in accordance with Article 210 concerning detailed rules on the principle of non-retroactivity.

CHAPTER 3 Award procedure

Article 131

Applications for grants

The Commission shall provide, where it deems it feasible, the possibility of making online grant applications.

• (a)legal persons; or

• (b)natural persons, in so far as this is required by the nature or characteristics of the action or the objective pursued by the applicant.

For the purposes of point (a) of the first subparagraph, grant applications may be eligible if submitted by entities which do not have legal personality under the applicable national law, provided that their representatives have the capacity to undertake legal obligations on behalf of the entity and offer guarantees for the protection of the Union's financial interests equivalent to those offered by legal persons.

For that purpose the applicant shall submit a declaration on his or her honour and, unless the grant is a low value grant, any supporting documents requested, on the basis of a risk assessment, by the authorising officer responsible. The prerequisite documents shall be indicated in the call for proposals.

The verification of financial capacity shall not apply to natural persons in receipt of scholarships, to natural persons most in need and in receipt of direct support, to public bodies or international organisations. The authorising officer responsible may, depending on a risk assessment, waive the obligation to verify the operational capacity of public bodies or international organisations.

When carrying out the necessary verification in respect of its ongoing grant procedures and existing agreements in accordance with Article 108(4), the authorising officer shall ensure that the applicant or beneficiary has been given the opportunity to present its observations before adopting any measure adversely affecting its rights.

Article 132

Selection and award criteria

Article 133

Evaluation procedure

CHAPTER 4 Payment and control

Article 134

Pre-financing guarantee

Article 135

Payment of grants and controls

• (a)refuse to sign the grant agreement or to give notification of the grant decision;

• (b)suspend implementation of the grant; or

• (c)where appropriate, terminate the grant agreement or decision.

The authorising officer responsible may, in addition, following an adversarial procedure, reduce the grants or recover amounts unduly paid in respect of all the grants affected by the systemic or recurrent errors, irregularities, fraud or breach of obligations referred to in the first subparagraph that may be audited in accordance with the grant agreements or decisions.

Beneficiaries shall be informed of the means for challenging decisions taken under paragraphs 3, 4, 5, 6 and 7 of this Article, in accordance with Article 97.

Article 136

Periods for record-keeping

CHAPTER 5 Implementation

Article 137

Implementation contracts and financial support to third parties

• (a)before awarding the grant, the authorising officer responsible has verified that the beneficiary offers adequate guarantees as regards the recovery of amounts due to the Commission;

• (b)the conditions for the giving of such support are strictly defined in the grant decision or agreement between the beneficiary and the Commission, in order to avoid the exercise of discretion by the beneficiary;

• (c)the amounts concerned are small, except where the financial support is the primary aim of the action.

TITLE VII PRIZES

Article 138

General rules

Contests for prizes with a unit value of EUR 1 000 000 or more may only be published if they are provided for in the statements or any other relevant document referred to in point (e) of Article 38(3).

The rules of the contest shall at least lay down the conditions for participation including the exclusion criteria, the award criteria, the amount of the prize and the payment arrangements. Article 105a, paragraphs 1 to 4, 6 and 7, except point (b) of the first subparagraph and the second subparagraph of that paragraph, paragraphs 8, 9, 11 and 13 to 17 of Article 106 and Article 108 shall apply to participants and winners. Article 107 shall apply to participants.

Prizes may not be awarded directly without a contest and shall be published annually in accordance with Article 35(2) and (3).

Prizes shall then be awarded by the authorising officer responsible, on the basis of the evaluation provided by the panel of experts who shall be free to decide whether to recommend the award of prizes, depending on their appraisal of the quality of the entries.

TITLE VIII FINANCIAL INSTRUMENTS

Article 139

Scope

Notwithstanding the first subparagraph, financial instruments may be established, in duly justified cases, without being authorised by means of a basic act, provided that such instruments are included in the budget in accordance with point (e) of Article 49(1).

The entities entrusted pursuant to points (ii), (iii), (v) and (vi) of Article 58(1)(c), when implementing financial instruments, may further entrust, under their responsibility, part of that implementation to financial intermediaries provided that those entities ensure that the financial intermediaries satisfy the criteria laid down in Article 140(1), (3) and (5). Financial intermediaries shall be selected on the basis of open, transparent, proportionate and non-discriminatory procedures, avoiding conflicts of interests.

The Commission shall remain responsible for ensuring that the implementation framework for financial instruments complies with the principle of sound financial management and supports the attainment of defined and timed policy objectives, measurable in terms of outputs and results. The Commission shall be accountable for the implementation of financial instruments without prejudice to the entrusted entities' legal and contractual responsibility in accordance with the applicable law.