1

Consolidated version as at 6 January 2018

Order published by Register of Legal Acts (hereinafter RLA)on 20 June 2017; RLAID Code: 2017-10282

ORDER REGARDING APPROVALOF the frameworkfor financing

smart fdi projects based on measure no. 01.2.1-LVPA-T-848

under PRIORITY 1 “PROMOTION OF SCIENTIFIC RESEARCH, EXPERIMENTAL DEVELOPMENT AND INNOVATIONS” OF THE OPERATIONAL PROGRAMME OF THE EUROPEAN UNION STRUCTURAL FUNDS FOR 2014-2020

PASSED BY THE MINISTER OF ECONOMY OF THE REPUBLIC OF LITHUANIA

20 June 2017 No. 4-363

Vilnius

Pursuant toArticle 6.2.7 of the Rules on Allocation of Responsibility and Functions among Institutions for the Implementation of the Investment Operational Programme of the EU Structural Funds for 2014–2020 approved by Resolution No. 528 on Allocation of Responsibility and Functions among Institutions for the Implementation of the Investment Operational Programme of the EU Structural Funds for 2014–2020 passed by the Government of the Republic of Lithuania on 4 June2014, I hereby

approve the Framework for Financing Smart FDI Projects based on Measure No. 01.2.1-LVPA-T-848 under Priority 1 “Promotion of Scientific Research, Experimental Development and Innovations” of the Operational Programme of the European Union Structural Funds for 2014-2020 (enclosed).

Minister of Energy,
Interim Minister of Economy / ŽygimantasVaičiūnas

COORDINATED

withthe Ministry of Finance of the Republic of Lithuania

by Notice No. ((24.37-02)-5K-1708590; 5K-1710854)-6K-1703727) of 1 June 2017

1

APPROVED

byOrder No. 4-363 of20 June 2017 passed by the Minister of Economy of the Republic of Lithuania

FRAMEWORK FOR FINANCING

SMART FDI PROJECTS BASED ON MEASURE NO. 01.2.1-LVPA-T-848

UNDER PRIORITY 1 “PROMOTION OF SCIENTIFIC RESEARCH, EXPERIMENTAL DEVELOPMENT AND INNOVATIONS” OF THE OPERATIONAL PROGRAMME OF THE EUROPEAN UNION STRUCTURAL FUNDS FOR 2014-2020

CHAPTER I

GENERAL PROVISIONS

  1. The Framework for Financing Smart FDI Projects based on Measure No. 01.2.1-LVPA-T-848 under Priority 1 “Promotion of Scientific Research, Experimental Development and Innovations” of the Operational Programme of the European Union Structural Funds for 2014-2020 (hereinafter referred to as the Framework) sets forth the requirements to be followed by applicants drafting and submitting grant proposals for funding of projects co-financed from the European Union Structural Funds (hereinafter referred to as the Proposal) under the Operational Programme of the European Union Structural Funds for 2014-2020 approved by the Implementing Decision of the European Commission of 8 September 2014 approving certain elements of the Investment Operational Programme of the European Union Structural Funds for 2014-2020 (hereinafter referred to as the Operational Programme).For the purpose of promoting investments into economic growth and job creation, the Republic of Lithuania shall be granted financial aid from the European Regional Development Fund, Cohesion Fund, European Social Fund and the allocation of the Youth Employment Initiative special envelope (the European Commission notified about the said decision by Notice No. C(2014)6397).The grants shall be given to entities implementing the projects co-financed from the European Union Structural Funds (hereinafter referred to as theProjects) based on Measure No. 01.2.1-LVPA-T-848 under Priority 1 “Promotion of Scientific Research, Experimental Development and Innovations” (hereinafter referred to as Measure), provided that such Projects are financed in accordance with the Framework, and also to institutions evaluating and selecting Proposals and monitoring the implementation of Projects.
  2. The Framework was drafted in compliance with the following documents:
  3. The Implementation Plan for Measures under the Priority Axis of the Investment Operational Programme of the European Union Structural Funds for 2014-2020 approved by Order No. 4-933 On the Approval of the Implementation Plan for Measures under the Priority Axis of the Investment Operational Programme of the European Union Structural Funds for 2014-2020 and Approval of the Framework for Calculation of National Monitoring Indicators passed by the Minister of Economy of the Republic of Lithuania on 19 December 2014 (hereinafter referred to as the Measure Implementation Plan);
  4. The Project Management and FinancingRegulations approved by Order No. 1K-316 On the Approval of Project Management and Financing Regulationspassed by the Minister of Finance of the Republic of Lithuania on 8 October 2014 (hereinafter referred to as the Project Regulations);
  5. Articles 13, 14, 25 and 29 of Commission Regulation (EU) No. 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty(OJ 2014 L 187, p. 1) as last amended by Commission Regulation(EU) No.2017/1084of 16 June 2017 (OJ 2017 L 156, p. 1) (hereinafter referred to as the General Block Exemption Regulation (GBER));
  6. Commission Regulation (EU) No.1407/2013 of 18December 2013 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid (OJ 2013, L 352, p. 1) (hereinafter referred to as the De MinimisAidRegulation);
  7. Annex to the Investment Operational Programme of the European Union Structural Funds for 2014-2020 approved by Resolution No. 1326 On the Approval of the Annex to the Investment Operational Programme of the European Union Structural Funds for 2014-2020 passed by the Government of the Republic of Lithuania on 26 November 2014;
  8. Framework for Calculation of National Monitoring Indicators of the Investment Operational Programme of the European Union Structural Funds for 2014-2020 approved by Order No. 1K-499 On the Approval of the Framework for Calculation of Monitoring Indicators for the Investment Operational Programme of the European Union Structural Funds for 2014-2020 passed by the Minister of Finance of the Republic of Lithuania on 30 December 2014 (hereinafter referred to as theFramework for Calculation of Monitoring Indicators for the Operational Programme);
  9. Recommendations on the Eligibility of Project Expenditure in the European Union Structural Funds approved by Minutes No. 34 of 4 July 2014 (as last amended) adopted by the Steering Committees for the Human Resource Development Operational Programme, Economic Growth Operational Programme, Operational Programme for Promotion of Cohesion and Investment Operational Programme of the European Union Structural Funds for 2014-2020, and published on the website of the European Union (hereinafter referred to as the EU) Structural Funds, i.e. (hereinafter referred to as the Recommendations on the Eligibility of Project Expenditure).

Article amendments:

No. 4-628of03-NOV-2017, published by RLA on 03-NOV-2017, IDCode: 2017-17449

  1. The definitions used in this Framework shall have the meanings defined in the legal norms and documents listed in Article 2 hereof, Rules on Allocation of Responsibility and Functions among Institutions for the Implementation of the Investment Operational Programme of the EU Structural Funds for 2014–2020 approved by Resolution No. 528 on Allocation of Responsibility and Functions among Institutions for the Implementation of the Investment Operational Programme of the EU Structural Funds for 2014–2020 passed by the Government of the Republic of Lithuania on 4 June 2014 and Rules for Management of the Investment Operational Programme of the EU Structural Funds for 2014–2020 approved by Resolution No. 1090 On Approval of the Rules for Management of the Investment Operational Programme of the EU Structural Funds for 2014–2020 passed by the Government of the Republic of Lithuania on 3 October 2014.
  2. The following are other terms and definitions used in the Framework:
  3. Large Enterprise shall mean any legal entity which does not comply with the definition of a micro, small or medium-sized enterprise within the meaning of the Law on Small and Medium-Sized Enterprise Development of the Republic of Lithuania (hereinafter referred to as theLaw on Small and Medium-Sized Enterprise Development).
  4. Experimental Developmentshall have the same meaning as applied pilot activity defined in Article 2(86) of the General Block Exemption Regulation.
  5. Innovations shall mean the implementation of organisational and procedural innovations.
  6. Enterprise Group shall have the same meaning as defined in the Law on Consolidated Financial Reporting of Enterprise Groups of the Republic of Lithuania.
  7. Microenterprise shall have the same meaning as defined in the Law on Small and Medium-Sized Enterprise Development.
  8. Decisive Influence shall have the same meaning as defined in the Law on Competition of the Republic of Lithuania.
  9. LithuanianHigher Education and Research Institution (hereinafter referred to asthe Higher Education and Research Institution) shall have the same meaning as defined in the Law on Higher Education and Research of the Republic of Lithuania.
  10. Small Enterprise shall have the same meaning as defined in the Law on Small and Medium-Sized Enterprise Development.
  11. Research shall have the same meaning as industrial research defined in Article 2(85) of the General Block Exemption Regulation.
  12. Research and/or Experimental Development and Innovation Infrastructure (hereinafter referred to as the R&DIInfrastructure) shall mean the infrastructure necessary for research and/or experimental development, inter alia, facilities complying with the requirements of good manufacturing practice as defined in the guidelines on good manufacturing practice of the respective field (provided that such guidelines are publicly available, e.g. on the Internet) and the requirements ofgood laboratory practice (provided that these requirements are publicly available, e.g. on the Internet) that are necessary for the implementation of the said activities. If no standing good manufacturing or laboratory practices exist, the specific nature of the infrastructure of the project, e.g., high hygiene, vibration or similar requirements for facilities are usually typical of high-technology enterprises, might be taken into consideration.
  13. Implementation of Organisational Innovation shallhave the same meaning as defined in Article 2(96) of the General Block Exemption Regulation.
  14. Initial Investment shall have the same meaning as defined in Article 2(49)(a) of the General Block Exemption Regulation.
  15. Implementation of Process Innovation shall have the same meaning as defined in Article 2(97) of the General Block Exemption Regulation.
  16. Independent Enterpriseshall have the same meaning as defined in the Law on Small and Medium-Sized Enterprise Development.
  17. Undertaking in Difficulty shall have the same meaning as defined in Article 2(18) of the General Block Exemption Regulation.
  18. Foreign Investor (Natural Person or Legal Entity) shall mean a foreign legal entity and/or natural person that invests their own or borrowed assets or assets under fiduciary management in accordance with the procedure established by the laws of the Republic of Lithuania.

Article amendments:

No. 4-628 of 03-NOV-2017, published by the RLA on 03-NOV-2017, ID Code: 2017-17449

4.17.State Aid Beneficiary shall mean an economic entity which has been granted state aid.

4.18.Effective Collaborationshall have the same meaning as defined in Article 2(90) of the General Block Exemption Regulation.

4.19.Medium-Sized Enterprise shall have the same meaning as defined in the Law on Small and Medium-Sized Enterprise Development.

  1. The implementation of the Measureshall be supervised by the Ministry of Economy of the Republic of Lithuania (hereinafter referred to as the Ministry) and the Public Institution Lithuanian Business Support Agency (hereinafter referred to as the Managing Authority).
  2. The form of finance under the Measure shall be a non-repayable grant.
  3. The Project selection under the Measure shall be continuous project selection.
  4. In accordance with the Framework, the estimated amount to be allocated for the implementation of the Projects shall be up to EUR 39,137,278 (thirty nine million one hundred and thirty-seven thousand two hundred and seventy-eight euro) of the EU structural funds (i.e., the European Regional Development Fund), out of which EUR 5,689,120 (five million six hundred and eighty-nine thousand one hundred and twenty euro) shall be the reserve fund of the European Regional Development Fund (hereinafter referred to as the Performance Reserve), which could be allocated to finance the Project subject to the approval of an amendment to the Annex of the Operational Programme by the Government of the Republic of Lithuania, whereby the Performance Reserve would be allocated for the implementation of Priority 1 1 “Promotion of Scientific Research, Experimental Development and Innovations”. If, following an open call for proposals, the amount requested to be financed under the favourably assessed Proposalsis higher than the allocated amount, the Managing Authority may submit a proposal to the Ministry to increase the allocation of finance for this call for proposals. Subject to the Ministry’s approval, the amount for the call for proposals may be increased within the limit of the total allocated funds for this Measure provided for in the Measure Implementation Plan and without violating the legitimate expectations of the applicants.
  5. The purpose of the Measure is to attract foreign investments into research and/or experimental development and innovations (hereinafter referred to as R&DI) in the Republic of Lithuania under Priority Areas of Research,Experimental (Sociocultural) and Innovation Development (Smart Specialisation) approved by Resolution No. 951 On the Approval of Priority Areas of Research, Experimental (Sociocultural) and Innovation Development (Smart Specialisation) passed by the Government of the Republic of Lithuania on 14 October 2013 (hereinafter referred to as the Smart Specialisation Areas).
  6. The following activities shall be financed:
  7. Foreign direct investment into research and/or experimental development (hereinafter referred to as R&D) activities;
  8. Foreign direct investment developing a new or expanding the existing R&DI infrastructure of an enterprise;
  9. Foreign direct investment into activities related to the Implementation of Process and Organisational Innovations.
  10. An applicant may choose to implement all of the three activities indicated in Article 10 of the Framework or two activities out of the three indicated in Article 10 hereof or one of the activities indicated in Articles 10.1 and 10.2 hereof.
  11. The first call for proposals for eligible activities under the Framework is planned to be launched in the second quarter of 2017.
  12. Inapplicable as of 04-NOV-2017.

Article amendments:

No. 4-628 of 03-NOV-2017, published in the RLA on 03-NOV-2017, ID Code: 2017-17449

  1. The financing to be allocated under the Framework is state aid which shall comply with all the conditions stipulated in Chapter I of the General Block Exemption Regulation and the relevant specific conditions stipulated in Chapter III of the General Block Exemption Regulation:

14.1. The financing to be allocated to the activities indicated in Article 10.1 hereof shall comply with the provisions of Article 25 of the General Block Exemption Regulation and the De Minimis Aid Regulation;

Article amendments:

No. 4-2 of 05-JAN-2018, published by RLA on 03-NOV-2017, ID Code: 2017-17449

14.2. The financing to be allocated to the activities indicated in Article 10.2 hereof shall comply with the provisions of Articles 13 and 14 of the General Block Exemption Regulation;

14.3. The financing to be allocated to the activities indicated in Article 10.3 hereof shall comply with the provisions of Article 29 of the General Block Exemption Regulation.

  1. The state aid granted under the Framework shall be deemed as having an incentive effect if it complies with the provisions of Article 6(2) of the General Block Exemption Regulation. At the time of Proposal evaluation, the Managing Authority shall verify the applicant’s eligibility to state aid under the General Block Exemption Regulation and, provided that the Ministry decides to finance the Project, the Managing Authority shall register the amount of granted state aid in the Register of Granted State and De Minimis Aid within 5 business days.The statutes of the Register of Granted State and De Minimis Aid were approved by Resolution No. 35 On the Approval of the Statutes of the Register of Granted State and De Minimis Aid passed by the Government of the Republic of Lithuania on 19 January 2005.

CHAPTER II

REQUIREMENTS FOR APPLICANTS AND PARTNERS

  1. In accordance with the Framework, potential applicants may be private legal entities incorporated (acquired) by a Foreign Investor (Natural Person or Legal Entity) in the Republic of Lithuania, which is under the Decisive Influence of the said Foreign Investor, or a Foreign Investor (Legal Entity)or a branch of the Foreign Investor (Legal Entity) founded in the Republic of Lithuania in accordance with Article 23.4 of the Framework.

Article amendments:

No. 4-628 of 03-NOV-2017, published by the RLA on 03-NOV-2017, ID Code: 2017-17449

  1. The following are potential partners as set forth in the Framework:
  2. . Private legal entities and/or Higher Education and Research Institutions may be partners for the purpose of activities stipulated in Article 10.1 hereof;

17.2. No partners may be involved for activities stipulated in Article 10.2 hereof;

17.3. If the Applicant carrying out the activity stipulated in Article 10.3 hereof is a Large Enterprise, a Microenterprise, Small and/or Medium-Sized Enterprise shall be selected as a partner.

  1. The Applicant (entity implementing the project) and its partner(s) shall be Independent Enterprises as defined in the Law on Small and Medium-Sized Enterprise Development for the purpose of achieving Effective Collaboration in accordance with Articles 50 and 75 of the Framework.
  2. Financing may be allocated to Applicants and partners in all areas, except for the cases provided for in Article 3(3) of Regulation (EU) No. 1301/2013 of the European Parliament and Council of 17 December 2013 on the European Regional Development Fund and on specific provisions concerning the Investment for growth and jobs goal and repealing Regulation (EC) No 1080/2006 (OJ 2013 L 347, p. 289) and in accordance with the restrictions stipulated in Article 1 (2)-(5), Articles 4 and 13, and Article 14 (16) of the General Block Exemption Regulation. In accordance with the Framework, financing shall not be allocated to the Applicant (partner) categorizedas an Undertaking in Difficulty and also if the Applicant (partner) failed to return the previously granted state aid which had been acknowledged as illegal and incompatible with internal market by the decision of the European Commission.

Article amendments:

No. 4-628 of 03-NOV-2017, published by the RLA on 03-NOV-2017, ID Code: 2017-17449

  1. If submitted together with a partner(s), the Proposal shall be accompanied by a copy of a valid joint venture (partnership) agreement or a letter of intent for cooperation. The joint venture (partnership) agreement shall be signed by the Applicant and all Project partners.If the Proposal is submitted together with a letter of intent for cooperation, a copy of the signed and valid joint venture (partnership) agreement must be submitted prior to signing the agreement on project management and financing.

Article amendments:

No. 4-628 of 03-NOV-2017, published by the RLA on 03-NOV-2017, ID Code: 2017-17449

  1. The joint venture (partnership) agreement shall explicitly state the rights and obligations of the parties with regard to the Project (i.e. the financial and intellectual contribution of each party to the Project, activities to be carried out by each of the parties, the right to jointly developed or acquired assets, project deliverables, etc.), liability of the parties and their commitment to adhere to the good partnership practice as follows:
  2. All partners must have read the Proposal and familiarized themselves with the undertaken rights and obligations in the Project;
  3. The entity implementing the Project shall consult the partners throughout the entire Project and inform the partners about the Project progress on a regular basis;
  4. The entity implementing the Project shall supply all partners with copies of the reports submitted to the Managing Authority;
  5. All amendments to the Project affecting the rights and obligations of the partners shall firstly be coordinated with the partners before seeking the approval of the Managing Authority.

CHAPTER III