European Economic Area Financial Mechanism and Norwegian Financial MechanismManagement Law
Chapter I. General Provisions
Article 1. Terms Used in this Law
The following terms are used in this Law:
1)European Economic Area Financial Mechanism – financial mechanism, which was established on thebasis of the agreement “On the participation of the Czech Republic, the Republic of Estonia, the Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, the Republic of Hungary, the Republic of Malta, the Republic of Poland, the Republic of Slovenia and the Slovak Republic in the European Economic Area” signed on October 2003, in Luxemburg, and which funding is ensured by the European Economic Area states and the European Free Trade Association states;
2)Norwegian Financial Mechanism –financial mechanism, which was established on thebasis of the agreement “On the participation of the Czech Republic, the Republic of Estonia, the Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, the Republic of Hungary, the Republic of Malta, the Republic of Poland, the Republic of Slovenia and the Slovak Republic in the European Economic Area” signed on October 2003, in Luxemburg, and which funding is ensured by the Norwegian Foreign Affairs Ministry;
3)European Economic Area Financial MechanismCommittee – committeewhich is established by the European Economic Area states and the European Free Trade Association states and which manages the European Economic Area financial mechanism and makes a decision on the granting of co-financing of the European Economic Area financial mechanism to the programmes, block grants, specific forms of grant assistance and individual projects;
4)Financial Mechanism Office – institution which is established by the European Free Trade Association states and which from the side of donorstates ensures the operation of the European Economic Area financial mechanism and Norwegian financial mechanism (hereafter – financial mechanisms);
5)Financial mechanisms’ management documents:
a)Memorandum of understanding on the implementation of the European Economic Area Financial mechanism for the period 2004-2009 between the Republic of Iceland the Principality of Liechtenstein, the Kingdom of Norway and the Republic of Latvia and approved on November 16, 2004 by the Cabinet of Ministers Regulation No.948 “About Memorandum of understanding on the implementation of the European Economic Area Financial mechanism for the period 2004-2009 between the Republic of Iceland, the Principality of Liechtenstein, the Kingdom of Norway and the Republic of Latvia”,
b)Memorandum of understanding on the implementation of the Norwegian Financial mechanism for the period 2004-2009, which has been established in compliance with the Agreement of 14 October 2003 between the Kingdom of Norway and the European Community on a Norwegian Financial Mechanism for the period 2004-2009 and approved on November 9, 2004 by the Cabinet of Ministers Regulation No.924 “About Memorandum of understanding on the implementation of the European Economic Area Financial mechanism 2004-2009 between the Kingdom of Norway and European community on the Norwegian Financial mechanism for the period 2004-2009 between the Kingdom of Norway and the Republic of Latvia”,
c)Rules and Procedures elaborated by the Financial Mechanism Office (hereafter – Office) and approved by the European Economic Area Financial Mechanism Committee or by the Norwegian Foreign Affairs Ministry,
d)Guidelines for the implementation of the financial mechanisms elaborated by the Office or by the Norwegian Foreign Affairs Ministry;
6)Focal Point – the Ministry of Finance which performs the duties stated by this law for the ensuring of financial mechanisms’ management;
7)Intermediate Body – line ministry which is responsible for the priorities stated in the AnnexesB of the documents specified in Article 1, Clause 5, subclause“a” and “b” of this law;
8)Intermediary– the derived public person, direct or indirectadministrationinstitution, which is responsible for the implementation of the programmes, block grants or specific forms, and which is approved by the European Economic Area Financial Mechanism Committee or by the Norwegian Foreign Affairs Ministry;
9)Individual project –project what can be achieved in local government, regional or national level and which co-financing amount required from the financial mechanisms cannot be less than 250 000 euroequivalent in lats according to the rate stated by the Bank of Latvia;
10)Programme – group of sub-projects what can be achieved in local government, regional or state level, on which basis the financial mechanisms’ co-financing is allocated to the sub-project’s applicant for the implementation of sub-project;
11)Block grant – group of several small sub-projects,on which basis the financial mechanisms’ co-financing is allocated to the sub-project’s applicant for the implementation of sub-project. The requested financial mechanisms’ co-financing to the one sub-project (except sub-projects of the specific forms of grant assistance) cannot be more then 50000 euro equivalent in lats according to the rate stated by the Bank of Latvia;
12)Specific form of grant assistance – financial mechanisms’ grant assistance form which is stated in the AnnexesC of the documents specified in Article 1, Clause 5, subclause“a” and “b” of this law and which is implemented in the form of the block grant (hereafter – block grant), except Technical Assistance Fund;
13)Sub-project – project implemented within the scope of the programme or block grant;
14)Individual project’s application – the applicant’s of the individual project’s application document in the written form, which is submitted to the Intermediate body, in order to apply for the reception of the financial mechanisms’ co-financing which is necessary for the implementation of the individual project;
15)Sub-project’s application – the applicant’s of the sub-project’s application document in the written form, which is submitted to the Intermediary in order to apply for the reception of the financial mechanisms’ co-financing which is necessary for the implementation of the sub-project;
16)Applicant of the individual project’s application– adirect or indirect administration institution, other administration institution, derived public person, as well as a legal person registered in the Republic of Latvia, which submits the individual project’s application to the Intermediate body;
17)Applicant of the sub-project’s application – a direct or indirect administration institution, other administration institution, derived public person, legal person registered in the Republic of Latvia, as well as a natural person within the Scholarship block grant, which submits the individual project’s application to the Intermediary;
18)Evaluation criteria of the individual project’s application – leading indicators on which basis the project is evaluated and the decision on its sending to the Office or rejection is taken;
19)Evaluation criteria of the sub-project’s application– leading indicators on which basis the project is evaluated and the decision on its approval or rejection is taken;
20)Individual project’s co-financing receiver – applicant of the individual project’s application, which application is approved by the European Economic Area Financial Mechanism Committee or by the Norwegian Foreign Affairs Ministry;
21)Sub-project’s co-financing receiver – applicant of the sub-project’s application, which application is approved by the Intermediary;
22)Grant agreement – agreement on terms and conditions of the application of granted financial mechanisms’ co-financing to programme, block grant or individual project and which are concluded between the Focal Point and the European Economic Area Financial Mechanism Committee or by the Norwegian Foreign Affairs Ministry;
23)Cooperation agreement – agreement on implementation of individual project which is concluded between the Central Finance and Contracting Agency (hereafter – Agency), the Intermediate body and the individual project’s co-financing receiver, or agreement on implementation of the programme or block grant which is concluded between the Agency, the Intermediate body and the Intermediary or agreement on block grants which are stated in the AnnexesC of the documents specified Article 1, Clause 5, subclause“a” and “b” of this law and which is concluded between Agency and the Intermediary;
24)Sub-project’s implementation agreement – agreement on implementation of the sub-project, which is concluded between the Intermediary and the sub-project’s co-financing receiver;
25)Project Interim Report – report which includes the progress and indicators part (progress part), the payment claim part, as well as the revenue part and the individual project’s co-financing receiver or the Intermediary financing confirmation part (financial part),and which is prepared by the individual project’s co-financing receiver or the Intermediary in accordance with the guidelines specified in the Article 1, Clause 5, subclause “d” of this law;
26)Annual progress report – report for calendar year, which includes the financial progress part (financial part), as well as the project indicator and risk analysis summery part (progress part), and which is prepared by the individual project’s co-financing receiver or the Intermediary in accordance with the guidelines stated in the Article 1, Clause 5, subclause “d” of this law;
27)Project Completion Report – report which includes the financial progress part (financial part) and completed results (results part), and which is prepared by the individual project’s receiver or the Intermediary in accordance with the guidelines stated in the Article 1, Clause 5, subclause“d” of this law;
28)Annual Monitoring Report – report prepared by the respective priority responsible Intermediate Body, which includes information about the implementation progress of the financial mechanisms co-financed programmes, block grants and individual projects within the year;
29)Annual report – report which includes information regarding implementation progress of the financial mechanisms within the year, and which is prepared by the Focal Point in accordance with the guidelines stated in the Article 1, Clause 5, subclause“d” of this law;
30)Irregularity – offence of the normative acts of the European Union or Republic of Latvia, offence of the financial mechanisms’ management documents, offence of the grant agreement or cooperation agreement, which affects or could affect on the implementation of the individual project, programme, block grant or sub-project in accordance with foreseen conditions.
Article 2. Purpose of this Law
The purpose of this law is to prescribe the effective, transparent and corresponding with the financial governanceprinciplesmanagement of the financial mechanisms in Latvia.
Article 3. Application of this Law
This Law prescribes:
1)the institutions involved in the management of the financial mechanism,they rights and duties;
2)the procedure for the taking and appeal of decisions of institutions involved in the management of the financial mechanisms;
3)and other issues related with the management of the financial mechanisms.
Article 4. Financial Mechanisms Management
The management of the financial mechanisms includes the organizing of the implementation of the financial mechanisms, elaboration of the evaluation criteria of the individual project’s and sub-project’s applications, selection of the programme’s, block grants’ and individual project applications for sending to the Office, selection of the sub-project’s applications,implementation of the financial mechanisms’ programmes, block grants (also subprojects) and individual projects, control, audit, execution of payments, reporting on established irregularities, monitoring and assessment.
Article 5. Allocation of the Financial Mechanisms
(1)The submission of an application of the programme, block grant or individual project according to this Law shall not create a duty for the institutions involved in the financial mechanism management to support the sending of the programme, block grant or individual project to the Office;
(2)The submission of a sub-project application according to this Law shall not create a duty for the Intermediary to allocate the financial mechanisms’ co-financing to its submitter.
Chapter II. Ensuring of the Financial Mechanisms Management
Article 6. Institutions and Persons Involved in the Management of theFinancial Mechanism
(1)Financial mechanisms management ensures:
1)Such institutions involved in the financial mechanism management:
a)the Focal Point,
b)the Agency,
c)the Paying authority,
d)the Intermediate body,
e)the Competent line ministry,
f)the Intermediary,
g)the Monitoring committee,
h)the Steering committee;
2)the individual project’s or sub-project’s co-financing receiver.
(2)In order to ensure the effective accomplishment of duties stated in this law, the institutions involved in the management of the financial mechanism an issue internal normative acts and corporate accordingly the established procedure by the State Administration Structure Law.
Article 7. Duties and Rights of Focal Point
(1)The duties of the Focal Point:
1)to ensure the management of financial mechanisms and the effectiveness of implementation;
2)to ensure the implementation and monitoring of support rendered by Technical Assistance Fund;
3)to ensure the conclusion of the grant agreements;
4)after the verification of the project interim report made by the Agency, to approve the progress part of this report and to submit it to the Agency;
5)after the verification of the project completion report made by the Agency, to approve this report and to submit it to the Agency;
6)to approve and submit to the Office the project annual progress report;
7)to elaborate and submit to the Office the annual report;
8)to ensure the publicity of the financial mechanisms’ implementation in the Latvia.
(2)The rights of the Focal Point:
1)to initiate and perform financial control and audit of financial mechanisms;
2)to request information from the institutions involved in the management of the financial mechanism and individual project’s or sub-project’s co-financing receiver, which is necessary for ensuring of the management of the financial mechanisms.
(3)The Ministry of Finance shall ensure the partition of functions which it performsaccordingly to this law from the other its functions.
Article 8. Agency, its Tasks
(1)Agency has such tasks of the Focal Point:
1)to elaborate the draft of the cooperation agreements;
2)to conclude the cooperation agreements;
3)to ensure the monitoring, control and audit of the implementation of the programmes, block grants and individual projects in accordance with cooperation agreements;
4)to verify the project interim reports and financial mechanisms’ payment climes’ source documents submitted by the Intermediaries or individual project’s co-financing receivers, as well as to verify the financial part of the project annual progress reports and project completion reports;
5)to submit the reports stated in Cluse 4 of this Paragraph to the Focal Point;
6)after receiving of the approved project interim report or project completion report from the Focal Point, to submit mentioned reports to the Paying Authority.
(2)The Agency shall ensure the partition of taskswhich it performs accordingly to this law from the other its tasks.
Article 9. Paying Authority, its Duties and Rights
(1)The Treasury shall perform the functions of the Paying Authority.
(2)The duties of the Paying authority:
1)to open and operate the accounts of the financial mechanisms’ funds;
2)to ensure the repayment of unused funds or improper carried out expenses;
3)after receiving of the project interim report from the Agency, to approve the financial part of this report and submit to the Office;
4)to submit the Focal Point’s approved project completion report along with last project interim report to the Office;
5)to exercise payments after receiving funds from the Office.
(3)The Paying authority has the rights to request source documents from the Focal Point, the Agency, the Intermediate Body, the Intermediary,the individual project’s or the sub-project’s co-financing receiver, which is necessary for approval of the payment climes.
(4)The Treasury shall ensure the partition of functions which it performs accordingly to this law from the other its functions.
Article 10. Intermediate Body, its Duties and Rights
(1)The functions of the Intermediate body performs:
1)Ministry of Environment – for priorities “Protection of the environment” and “Sustainable development”;
2)Ministry of Culture – for priority “Conservation of European heritage”;
3)Ministry of Health – for priority “Health”;
4)Ministry of Children and Family Affairs – for priority “Children with special needs”;
5)Ministry of Education and Science – for priorities “Human resource development and education” and “Academic research”;
6)Ministry of Internal Affairs – for priority “Schengen”;
7)Ministry of Justice – for priorities “Judiciary” and “Technical assistance” which is foreseen for implementation of the acquis communautaire;
8)Ministry of Regional Development and Local Government – for priorities “Regional policy and development of economic activity” and “Cross border activities”.
(2)The duties of the Intermediate Body:
1)in cooperation with the Competent line ministries to elaborate the individual projects’ open call guidelines, including the evaluation criteria of the individual projects’ applications;
2)if the Focal Point agrees with European Economic Area Financial Mechanism Committee and Norwegian Foreign Affairs Ministry on restricted call of individual projects, to elaborate the restricted call guidelines, to which shall be applied the conditions of the individual projects’ open call guidelines set by this law;
3)to evaluate the individual projects’ applications;
4)to inform applicant of the individual project’s applicationno later than within the 7 days about the Focal Point’s decision on sending or refusal to send application of the individual project to the Office and about final decision of the European Economic Area financial mechanism committee or the Norwegian Foreign Affairs Ministry regarding approval or rejection of the application of the individual project;
5)to ensure monitoring and control of the programmes, block grants and individual projects;
6)to conclude cooperation agreements;
7)to review and conform a progress part of the annual progress report submitted by the individual project’s co-financing receiver and by the Intermediary, which is approved for the priorities stated in the AnnexesB of the documents specified in Article 1, Clause 5, subclause“a” and “b” of this law, and to submit the report to the Agency;
8)to submit the Annual monitoring report to the Focal Point;
9)to inform society regarding projects, which are implemented by using the financial mechanisms within the respective priority.
(3)The rights of the Intermediate Body:
1)to elaborate the applications of the programmes or block grants within the respective priority;
2)to elaborate applications of the individual projects within the respective priority, as well as to ensure attraction of the independent experts for evaluation of the applications of the individual projects;