Cost reimbursement for research and technological development projects (EC) (Deliverables version)

Article 1 - Scope
Article 2 - Duration
Article 3 - Estimated costs and maximum financial contribution of the Community
Article 4 - Project deliverables and summary statements of amounts transferred by the coordinator to be submitted to the Commission
Article 5 - Applicable law and jurisdiction
Article 6 - Special conditions
Article 7 - Amendments
Article 8 - Final provisions
Article 9 - Signature and language of the contract

ANNEX I-TABLE - Indicative breakdown of estimated eligible costs (intermediate and final milestones)

ANNEXII - GENERAL CONDITIONS
Part A: Implementation of the project
Article1 - Definitions
Article2 - Management of the project and role of the coordinator

Article3 - The Community's financial contribution
Article4 - Submission of project deliverables and of summary statements of amounts transferred by the coordinator
Article5 - Subcontracts
Article6 - Liability
Article7 - Termination of the contract and of the participation of a contractor

PartB: Rules relating to intellectual and industrial property, publicity and confidentiality

Article8 - Ownership of knowledge
Article9 - Protection of knowledge
Article10 - Use of knowledge
Article11 - General principles relating to access rights
Article12 - Access rights for carrying out of the project
Article13 Access rights for use
Article14 - Conditions governing exclusive access rights for exploitation
Article15 - Refusal to grant access rights for exploitation
Article16 - Technological implementation plan
Article17 - Content of the technological implementation plan
Article18 - Publicity and communications concerning the project and knowledge

Article 19 - Confidentiality
Article20 - Communication of data for evaluation and standardisation purposes
Article21 - Incompatible or restrictive commitments

Part C: Reimbursement of costs
Article22 - Eligible costs - general principles
Article23 - Direct costs
Article24 - Indirect costs
Article25 - Justification of costs

Part D: Auditing
Article26 - Financial audit
Article27 - Technical verification of the project
Article28 - Technological audit

Part E-1:Model cost statement
Cost of coordination for the project
Summary statement of eligible costs for the project

Part E-2: Model request for payment
Part E-3: Model summary statement of amounts transferred by the coordinator

Part B: Rules relating to intellectual and industrial property, publicity and confidentiality

Article 8 - Ownership of knowledge

1. Knowledge shall be the property of the contractors who carried out the work leading to the knowledge.

2. Where several contractors have carried out work generating knowledge, they shall agree among themselves on the allocation and the terms of exercising the ownership of the knowledge in accordance with this contract.

3. If persons employed by a contractor may claim rights to knowledge, the participant shall take steps or reach appropriate agreements to ensure that these rights are exercised in a manner compatible with its obligations under this contract.

4. Where a contractor transfers ownership of knowledge, he shall take steps or conclude agreements to pass on his obligations under this contract to the assignee, in order to take account, inter alia, of the interests of the Community and in compliance with international agreements concluded by the Community.

The contractor shall inform the other contracting parties in advance of the conditions of the assignment.

Article 9 - Protection of knowledge

1. Contractors shall provide adequate and effective protection for knowledge owned by them which is capable of use, in particular in the case of joint ownership.

The terms of the protection, including protection periods, shall be defined in the technological implementation plan, which must be in conformity with the principles set out in Articles 16 and 17 of this Annex.

2. Where a contractor does not intend to protect his knowledge in a country specified by the Commission or waives such protection, the latter may take measures to that end in agreement with the former. The contractor concerned may not refuse without good reason.

In such cases the Community shall assume the obligations referred to in Articles10to14 of this Annex instead of the contractor.

The contractor shall, on request, be entitled to access rights in the country in question on a royalty-free basis, and may grant sublicences on the knowledge.

3. A contractor may publish, or allow the publication of, data, on whatever medium, concerning knowledge it owns provided that this does not affect the protection of that knowledge.

The other contracting parties shall be given, in good time, prior notice of any planned publication and the scheduled date thereof. A copy of the medium containing these data shall be communicated to them if they so request within 30days after receipt of such notice. They may object to such publication, provided that due reasons for the objections are given, within a new period of 30 days after receipt of such data where, from their point of view, it would adversely affect the protection of the knowledge referred to in paragraph 1 of this Article.

The consortium agreement may specify the details of such a right to object and the measures necessary to ensure a speedy publication without prejudicing the protection.

Article 10 - Use of knowledge

1. The contractors shall use or cause to be used the knowledge which they own within a reasonable time-limit in accordance with the interests of the Community and in compliance with international agreements concluded with the Community.

The terms of use, including a reasonable time-limit within which it must take place, shall be set out in the technological implementation plan referred to in Articles 16 and 17 of this Annex. They shall take account, in particular, of the area of activity concerned.

2. If the knowledge is not used in accordance with the terms and time-limits referred to in paragraph 1, second subparagraph, of this Article, the contractors shall disseminate such knowledge, in accordance with:

- the need to safeguard intellectual and industrial property rights,

- confidentiality,

and taking into account the benefits of rapid dissemination and their legitimate interests.

Should the contractors fail to do so, the Community shall disseminate the knowledge itself under the same conditions.

Article 11 - General principles relating to access rightss

1. Access rights shall be granted by contractors on request on the conditions provided for in Articles 12to15 of this Annex. Access rights shall be granted to pre-existing know-how provided that the contractor concerned is free to grant such rights.

2. Access rights shall be granted, depending on the case:

- free of charge and subject to no other condition than those specified in this Annex (on a royalty-free basis),

- on conditions that are more favourable than the market conditions, as a result of the granting of any kind of rebate (preferential conditions),

- on market conditions.

Access rights may be granted by any contractor on financial conditions that are more favourable for the requester.

3. The granting of access rights may be made conditional on the conclusion of specific agreements aimed at ensuring that they are used only for the intended purpose and appropriate confidentiality agreements.

4. Except where the contractor granting access rights so agrees, access rights shall not confer any entitlement to grant sublicences.

5. The essential transfer costs for the granting of access rights shall be borne by the beneficiary.

6. In accordance with Article 2(2)(b) of this Annex, the contractors may, through the conclusion of a consortium agreement, grant additional access rights or supplement the rules of this Annex concerning access rights.

Article 12 - Access rights for the carrying out of the project

1. Principal contractors shall enjoy access rights to the knowledge needed to carry out their work in the framework of the project. They shall be granted on a royalty-free basis.

Assistant contractors shall be entitled to access rights to the knowledge needed to carry out their work in the framework of the project. Those rights shall be granted on a royalty-free basis by the principal contractors to whose technical supervision they are subject or their other assistant contractors. When they are requested from other contractors, access rights shall be granted on favourable conditions.

Subject to legitimate interests of the contractor concerned, principal contractors under the same specific programme shall, where they are established in a MemberState or an Associated State, enjoy access rights to the knowledge needed to carry out their work in the framework of that programme. They shall be granted on favourable conditions.

2. Principal contractors shall enjoy access rights to pre-existing know-how needed to carry out their work in the framework of the project. They shall be granted on favourable conditions.

Assistant contractors shall enjoy access rights to the pre-existing know-how needed to carry out their work in the framework of the project. Such rights shall be granted on favourable conditions by the principal contractors to whose technical supervision they are subject or their other assistant contractors. When they are requested from other contractors, access rights shall be granted on market conditions.

3. Subject to paragraph 1, third subparagraph, of this Article, where contractors designate a contract under the framework programme as being a complementary contract, they shall determine with the contractors involved in that project the arrangements for the granting of access rights to the latter, the period during which they can be claimed, and the financial conditions attaching to them.

4. Access rights for the carrying out of the project, as referred to in paragraphs 1 and 2 of this Article, shall be granted until the end:

- of the duration of the project, where the requester is a contractor,

- of the duration of the project to which the requester contributes, where the latter is a principal contractor under the same specific programme.

Article 13 - Access rights for use

1. Principal contractors shall enjoy access rights to all knowledge resulting from the project in order to use that knowledge or in order to use knowledge that they themselves have generated. They shall be granted on a royalty-free basis.

A contractor who does not generally undertake commercial activities and who is unable to exploit the knowledge he has generated may decide on his own to grant access rights to such knowledge to the principal contractors referred to in the firstsubparagraph of this paragraph with a view to its exploitation on financial or similar conditions that are reasonable and acceptable in relation to his contribution to the project and the potential of that knowledge. Such contractor shall not use such knowledge for the purpose of exploitation. The negotiation of the conditions shall not delay the granting of access rights.

Assistant contractors shall enjoy access rights to the knowledge needed to use the knowledge that they have generated in the framework of the project. Such rights shall be granted by the principal contractor or principal contractors to whose technical supervision they are subject or their other assistant contractors on preferential conditions. When they are requested from other contractors, access rights shall be granted on market conditions.

Subject to legitimate interests of the contractor concerned, principal contractors under the same specific programme shall, where they are established in a MemberState or an Associated State, enjoy access rights to the knowledge generated by the project needed to use the knowledge that they have generated in the framework of that programme. They shall be granted on market conditions.

2. Principal contractors shall enjoy access rights to pre-existing know-how and knowledge other than that generated in the framework of the project to the extent necessary to use knowledge resulting from the project. Those access rights shall be granted on favourable conditions.

3. When the access rights referred to in paragraphs 1 and 2 of this Article are granted for the purpose of using knowledge in subsequent research activities, the granting of such rights may be made conditional on the submission of a duly substantiated request and on the conclusion of a specific agreement to ensure that they are used only for the intended purpose and of appropriate confidentiality commitments. In such a case, the access rights granted shall not confer entitlement to grant sub-licences, unless the contractor granting such rights agrees thereto.

4. Subject to the provisions of paragraph1, fourth subparagraph, of this Article, where contractors designate a contract under the framework programme as being a complementary contract, they shall determine with the contractors involved in that project the arrangements for the granting of access rights to the latter, the period during which they may be claimed, and the financial conditions attaching thereto.

5. Access rights for use, as referred to in paragraphs1 and 2 of this Article, may be requested until:

- five years after the end of the duration of the project, unless a longer time-limit is provided for the use of knowledge in the technological implementation plan,

- two years after the end of the duration of the project to which the requester contributes, where the latter is a principal contractor under the same specific programme.

Article 14 - Conditions governing exclusive access rights for exploitation

1. As a rule, access rights shall be granted on a non-exclusive basis.

Contractors may, exceptionally, grant exclusive access rights to their knowledge resulting from the project for exploitation purposes:

- in compliance with competition policy, and in particular the Community rules adopted pursuant to Article 81(3) of the Treaty establishing the European Community,

and

- provided that they are economically indispensable, taking into account in particular the market, the risks involved and the investments required.

They must be granted on market conditions.

The granting of such exclusive rights shall not affect the obligation, in accordance with Article13(1), first and third subparagraphs, of this Annex, to grant access rights to the requester for the use of his own knowledge.

2. A contractor who intends to grant access rights on his knowledge resulting from the project on an exclusive basis shall inform the other contractors in good time of the identity of the requester and of the arrangements for granting such rights.

Principal contractors may, within 30 days after receipt of this information, indicate their commitment to exploit such knowledge on the basis of non-exclusive access rights. In that case, the access rights may not be granted on an exclusive basis pursuant to paragraph 1, first subparagraph, of this Article.

Article 15 - Refusal to grant access rights for exploitation

A contractor may refuse to grant access rights for the exploitation of knowledge resulting from the project if he is exploiting it himself. The details thereof may be defined in the consortium agreement. Such refusal shall only be justified, however, when it is economically indispensable in view, in particular, of the market, the risks and the investment required to exploit the knowledge.

Such refusal shall not affect the obligation, in accordance with Article13(1), first and third subparagraphs, of this Annex, to grant access rights to a requester for the use of his own knowledge.

Article 16 - Technological implementation plan

1. A technological implementation plan drawn up in accordance with the principles set out in Article17 of this Annex shall be submitted to the Commission no later than two months after the end of the duration of the project. It shall reflect, except in particular circumstances, the broad outlines of the dissemination and use plan.

2. The technological implementation plan shall be approved by the Commission taking into account compliance with the interests of the Community and international agreements concluded with the Community, as well as the interests of the contractors. To this end, the contractors shall submit to the Commission on request the documentation they consider relevant in the light of Article 17 of this Annex, whatever its medium, and in an appropriate form.

Approval of the technological implementation plan by the Commission shall be limited to verification of compliance with the obligations set out in the contract. It shall be without prejudice to Articles14 and 15 of this Annex.

In the absence of observations by the Commission, the technological implementation plan shall be deemed to be approved within two months of its receipt.

3. Contractors shall inform the Commission of the arrangements for implementing the technological implementation plan at the latest on the expiry of the time-limits provided for therein.

They shall give proper justification for any change made to the technological implementation plan that significantly alters the conditions of use. In the absence of observations within one month of its receipt, such change shall be deemed to be approved by the Commission.

Article 17 - Content of the technological implementation plan

1. The technological implementation plan shall include a summary of the project and a forecast of the intentions of the contractors, as well as a description of their achievements regarding the use of the knowledge.

2. The summary of the project shall be sent by the coordinator to the Commission for dissemination and shall contain a description of the project and its results as well as the names of the contractors owning the results.

3. The forecast of the intentions of the contractors regarding use of the knowledge as well as their achievements in that field shall be sent to the Commission by each contractor individually and shall contain, in particular, the following data:

(a) protection measures obtained or planned and steps taken to that effect,

(b) data necessary to ascertain the terms of use as described in Article 10(1), second subparagraph, of this Annex, including an indicative timetable and an outline of the resources contemplated for that purpose,

(c) any other data necessary to ascertain the extent of the Community added-value,

(d) differences compared with the dissemination and use plan.

The Commission shall keep confidential any data, knowledge and document expressly communicated to it as confidential.

Article 18 - Publicity and communications concerning the project and knowledge

1. Without prejudice to Article9(3) of this Annex concerning the publication of data on the knowledge and taking into account their legitimate interests, contractors shall, throughout the duration of the project, take appropriate measures to ensure suitable publicity for the project in order to highlight the support provided by the Community. The Commission may agree on such measures with the contractors.

Contractors shall give the Commission general data in advance concerning the proposed publicity.

2. The Commission may disseminate, by any appropriate means and for as long as necessary, general data relating in particular to the objectives, the estimated total cost, the duration and the state of progress of the project, to the Community's financial contribution and to the knowledge, as described in the final report. The legal designation of contractors and the names of the laboratories carrying out the work shall also be published unless they object to this in advance on the grounds of overriding legitimate interests.

Where the measures referred to in the first subparagraph of this paragraph presuppose access by the Commission or its duly authorised representatives to the premises of contractors, the latter may refuse such access on the grounds of legitimate interests.

On request and where he is free to do so, each contractor shall grant the Commission an irrevocable, non-exclusive right, on a royalty-free basis, to translate, reproduce and distribute articles for scientific and technical journals, conference papers and other documents drawn up in the framework of the project and published by the contractor.

3. In the case of the reports referred to in Article4(1)(a)(i), (ii) and (iii) of this Annex which cannot be published, the Commission may, on request, transmit these documents to other Community institutions on a confidential basis and subject to limits of such requests.

4. Any communication or publication, whatever the form or medium (including the Internet), concerning the state of progress of the project or concerning the knowledge:

- shall mention the relevant specific programme and the support provided by the Community,

and

- shall, where it is made by the contractor, state that the author is solely responsible for it and that it does not represent the opinion of the Community, and that the Community is not responsible for any use that might be made of data appearing therein.

Where use of the European emblem is envisaged, prior approval shall be required from the Commission. Standards, in particular with regard to graphics, in force within the Commission must be complied with.

Article19 - Confidentiality

1. Without prejudice to Article18 of this Annex and any other obligation contained in this contract, the contracting parties shall be required to keep confidential any data, knowledge, documents and pre-existing know-how communicated to them on a confidential basis or the disclosure of which may be prejudicial to one of them.

This obligation shall no longer apply:

- where the content of those data, knowledge, documents and pre-existing know-how becomes publicly available through work or actions lawfully performed outside this contract and not based on activities under it,

- where those data, knowledge, documents and pre-existing know-how have been communicated without any confidentiality restrictions or where the party communicating them subsequently waives their confidentiality.

2. Where this contract provides for the communication of any data, knowledge, pre-existing know-how or document referred to in paragraph1 of this Article, the contracting parties shall first satisfy themselves that the recipient will keep it confidential and use it only for the purpose for which it is to be communicated.

Article20 - Communication of data for evaluation and standardisation purposes

1. Without prejudice to Article19 of this Annex, contractors shall be required to provide, at the request of the Commission or its authorised representatives, data necessary for:

- the continuous review of the specific programme concerned and the Fifth Framework Programme,

and

- the evaluation of Community activities over the five years preceding that evaluation.

Such a request may be made throughout the duration of the contract and up to fiveyears after the contract completion date.

The data collected shall be used exclusively in a statistical form.

2. Without prejudice to the provisions regarding the protection and use of knowledge, and confidentiality, set out respectively in Articles 9, 10 and 19 of this Annex, contractors must inform the Commission and the standardisation bodies without delay of knowledge resulting from the project which may contribute to the preparation of European or, where appropriate, international standards, or to an industrial consensus on technical issues. To this end, they shall communicate appropriate data on such knowledge to the Commission and to the standardisation bodies during the entire duration of the contract and the two years following the contract completion date.

The provisions of this contract shall be without prejudice to the rules applicable, within the standardisation bodies, to data transmitted to them.

Article 21 - Incompatible or restrictive commitments

1. Contractors shall take all necessary steps to avoid commitments that are incompatible with the obligations provided for in Articles10 to 20 of this Annex.

2. Without prejudice to paragraph1 of this Article, contractors shall be informed, as soon as possible, by the contractor required to grant access rights, as referred to in Articles12 and 13 of this Annex, as the case may be, of any limitations on the granting of access rights to pre-existing know-how, obligations to grant rights to knowledge or any restriction which might substantially affect the granting of access rights.

Part C: Reimbursement of costs

Article 22 - Eligible costs - general principles

1. Eligible costs are the costs defined in Articles23 and 24 of this Annex. They shall fulfil the following conditions:

- be necessary for the project,

- be incurred during the duration of the project,

- be determined in accordance with the accounting principle based on historic costs and the usual internal rules of the contractor, provided that they are regarded as acceptable by the Commission,

- be recorded in the accounts no later than the contract completion date or in the tax documents,

and

- exclude any profit margin.

Without prejudice to the provisions of the first subparagraph,

- the costs for drawing up the final report shall be eligible when incurred by the coordinator within a maximum period of two months from the end of the duration of the project,

- the durable equipment may have been purchased or leased with option to buybefore the project commencement date, within the limits specified in Article23(2), fifth subparagraph.

2. In the case of contractors covered by the additional costs system (those without an accounting system that allows the share of their direct and, without prejudice toArticle 24(1)(b) of this Annex, indirect costs relating to the project to be distinguished), the eligible costs shall be as follows:

- the direct costs specified in Article 23 of this Annex which are additional to their recurring costs,

and

- the indirect costs specified in Article24(2) of this Annex.

3. Non-eligible costs are in particular the following:

- costs related to return on capital employed,

- provisions for possible future losses or charges,

- interest owed,

- provisions for doubtful debts,

- resources made available to a contractor free of charge,

- value of contributions in kind,

- unnecessary or ill-considered expenses,

- marketing, sales and distribution costs for products and services,

- indirect taxes and duties, including VAT,

- entertainment or hospitality expenses, except such reasonable expenses accepted by the Commission as being absolutely necessary for carrying out the project,

- any cost incurred or reimbursed, in particular in respect of another Community, international or national project, subject to the provisions of Article 23(2), fifth subparagraph, second indent.

4. No cost may be charged to more than one of the eligible cost categories referred to in Articles23 and 24 of this Annex.

5. Any properly substantiated transfer, between contractors or between budget milestones set out in the table of the indicative breakdown of estimated eligible costs, approved by all the principal contractors and the assistant contractors directly concerned shall require prior written approval by the Commission.

Each contractor shall be authorised to transfer the budget set out in the table of the indicative breakdown of estimated eligible costs between categories of costs, provided that:

- he informs the Commission of such transfer after ensuring that the scope of the project and the conditions of participation referred to in Articles 3 to 12 of the Decision are not fundamentally altered,

and

- the total amounts transferred do not exceed 20% of the amount allocated to the beneficiary cost category in the table of the indicative breakdown of estimated eligible costs.

Any other properly substantiated transfer shall require prior written approval by the Commission.

The budget for the costs for the protection of knowledge may not be the subject of a transfer to other categories of eligible costs

The approval of the Commission referred to in the first and third subparagraphs of this paragraph shall be deemed to have been given in the absence of observations within one month of receipt of the request made by the coordinator.

Article 23 - Direct costs

1. Personnel

With regard to personnel costs,

(a) Only the costs of the actual hours worked by the persons directly carrying out the scientific and technical work under the project may be charged to the contract.

In compliance with Article 8(3) of this Annex, such persons must:

- be directly employed by the contractor in accordance with his national legislation,

- be under the sole technical supervision of the latter,

and

- be remunerated in accordance with the normal practices of the contractor, provided that these are regarded as acceptable by the Commission.

All the working time charged to the contract must be recorded throughout the duration of the project, or, in the case of the coordinator, no later than two months after the end of the duration of the project, and be certified at least once a month by the person in charge of the work designated by the contractor in accordance with Article 2(2)(a) of this Annex or by the duly authorised responsible financial officer of the contractor.

(b) For contractors using the full costs system, personnel costs shall comprise:

- the actual costs (gross remuneration and related charges),

- average employment costs, where these correspond to the normal practices of the contractor concerned, provided that such costs do not differ significantly from the actual costs and that such practices are regarded as acceptable by the Commission.

(c) For contractors using the additional costs system, costs shall be limited to the actual costs of the personnel employed on the project (gross remuneration and related charges) where the latter has concluded:

- a temporary contract for Community RTD projects (permanent personnel paid for working full-time for the contractor is excluded from this cost-charging system),

- a temporary contract for completing a doctorate,

- a contract which depends upon external funding additional to the normal recurring funding of the contractor. In that case, the costs charged to this contract must exclude any costs borne using such recurring funding.

2. Durable equipment

Costs relating to the purchase or leasing with option to buy of durable equipment shall be charged to the contract pursuant to this paragraph.

Hire costs shall be charged to the contract pursuant to paragraph 3 of this Article.

The eligible costs for durable equipment leased with option to buy shall not exceed the costs that would have been incurred if the equipment had been purchased, taking account of the formula below.

The costs to be charged to the contract shall be calculated according to the following formula:

A/B x C x D

A = the period in months during which the durable equipment is used for the project after invoicing,

B = the depreciation period for the durable equipment: 36 months for computer equipment costing less than EUR 25 000 or 60 months for other equipment,

C = the actual cost of the durable equipment,

D = the percentage of usage of the durable equipment for the project.

The durable equipment may have been purchased or leased with option to buy:

- within the six months preceding the project commencement date,

- for a previous contract concluded with the Community, provided that the depreciation period has not been exceeded. Only the costs relating to the unexpired depreciation period may be charged.

3. Subcontracting

With the exception of costs charged to the contract pursuant to paragraph 1 of this article, the actual costs of subcontracts may be charged to the contract if:

- they are incurred in compliance with the conditions set out in Article 5 of this Annex,

- the subcontracts are awarded and concluded in accordance with the usual procedures of the contractors,

- they are in accordance with market prices,

and

- the copies of the relevant invoices, certified by the contractors concerned, are attached to the corresponding cost statements.

4. Travel and subsistence

Actual travel and related subsistence costs for personnel working on the project may be charged to the contract.

The prior approval of the Commission shall be required for any destination outside the territory of the Member States, the Associated states or a third country where a contractor is established, unless such a destination is provided for in Annex I.

In the absence of observations within one month of receipt of the request made by the coordinator, the approval of the Commission shall be deemed to have been given.

Travel and subsistence costs shall be established on the basis of the usual rules of the contractor.

5. Consumables

The actual costs relating to consumables, including software licences, that are specifically acquired for the project and whose purpose so justifies may be charged to the contract.

However, contractors using the full costs system and charging actual overheads shall include these costs in the indirect costs where this is reasonably practical and in accordance with their normal accounting conventions.

6. Computing

Computing costs, including the costs resulting from the use of computer services and media at the disposal of contractors, may be charged to the contract. They must be substantiated in accordance with the rules applicable to the contractors.

However, contractors using the full costs system and charging actual overheads shall include these costs in the indirect costs where this is reasonably practical and in accordance with their normal accounting conventions.

7. Protection of knowledge

The costs of the protection of knowledge generated in the framework of the project shall comprise the actual costs necessary for adequate and effective protection for such knowledge, taking into account the interests of the Community. They shall be eligible only in so far as the Commission has given its prior written approval to the contractors and in so far as the competition rules, in particular those under the Community framework for State aid to research and development, are complied with. In the absence of observations within one month of receipt of the request made by the coordinator, the approval of the Commission shall be deemed to have been given.

They comprise:

- the costs of documentary research preliminary to the filing of an application for the granting of an industrial property right,

- the fees paid to the competent authorities that are necessary with a view to the granting of an industrial property right or its territorial extension, provided that prior documentary research, as referred to in the first indent, has been carried out,

and

- the fees paid to the competent authorities to extend the duration of the industrial property right.

Fees paid to advisers for knowledge protection purposes shall be reimbursable provided that an application for the granting of an industrial property right has been subsequently filed. Personnel costs incurred in this connection shall be reimbursable, provided that:

(i) the conditions of paragraph 1(a) and (b) or (c) of this Article shall apply mutatismutandis,

and

(ii) the time actually worked on the project shall be recorded and certified in accordance with paragraph1(a), third sentence, of this Article.

The Community's financial contribution in respect of the third subparagraph of this paragraph may not exceed EUR 4000 per industrial property right.

The costs of protection of such knowledge shall exclude, in particular:

- translation costs,

- the costs of creating and marketing a product or a process and the costs of creating and providing a service,

- the costs incurred with a view to obtaining the access rights referred to in Articles12, 13 and 14 of this Annex.

8. Other specific costs

Other specific actual costs shall not come into any of the categories of eligible costs indicated in paragraphs 1 to 7 and 9 of this Article and in Article 24 of this Annex. They may include, in particular, the costs of prototypes or equipment fabricated, the costs of using large testing equipment and simulators, or the direct costs incurred in the setting-up of financial guarantees requested by the Commission.

They shall only be eligible subject to prior written approval of the Commission unless they are already provided for in Annex I to this contract.

In the absence of observations within one month of receipt of the request made by the coordinator, the approval of the Commission shall be deemed to have been given.

9. Administrative and financial coordination

Only the coordinator can charge to the contract the following administrative and financial coordination costs:

- the costs of administrative personnel in charge of the administrative and financial coordination of the project not included in the indirect costs referred to in Article 24 of this Annex. In this case,

(i) the conditions of paragraph 1(a) and (b) or (c) of this Article shall apply mutatismutandis to that personnel,

(ii) the time actually worked on the project shall be recorded and certified in accordance with paragraph1(a), third sentence of this Article,

and

- costs indicated in paragraphs 2 and 4 to 8 of this Article, provided that the conditions thereof are also complied with.

Article 24 - Indirect costs

1. Contractors using the full costs system may charge overheads calculated:

(a) on the basis of actual costs, in so far as allowed by their accounting system. Such overheads may include in particular the costs of administration and management, depreciation of buildings and equipment, water, electricity, telecommunications and postal charges, office supplies, and administrative personnel costs not charged to the contract pursuant to Article 23(9) of this Annex.

They shall be calculated in accordance with the normal accounting conventions and principles applicable to the contractors, provided that they are regarded as acceptable by the Commission.

(b) on a flat-rate basis. In this case, they shall charge to this contract a flat-rate amount of 80% of the eligible personnel costs referred to in Article 23(1)(b) and(9) of this Annex. A contractor may request a lower percentage when this is required, for instance, by his internal rules.

2. Contractors using the additional costs system shall, as such, charge to this contract a flat-rate amount of 20% of the direct costs, excluding the costs of subcontracting. A contractor may request a lower percentage when this is required, for instance, by his internal rules.

Article 25 - Justification of costs

Eligible costs shall be reimbursed where they are justified by the contractor.

To this end, the contractor shall maintain, on a regular basis and in accordance with the normal accounting conventions of the State in which he is established, the accounts for the project and appropriate documentation to support and justify in particular the costs and time reported in his cost statements.

This documentation must be precise, complete and effective.

Part D: Auditing

Article 26 - Financial audit

1. The Commission, or any representative authorised by it, may initiate an audit at any time during the contract and up to five years after each payment of the Community contribution, as referred to in Article 3(1), first subparagraph, of this Annex.

The audit procedure shall be deemed to be initiated on the date of receipt of the relevant registered letter with acknowledgment of receipt sent by the Commission.

It shall be carried out on a confidential basis.

2. The Commission or any authorised representative may have access, at any reasonable time, in particular to the personnel of the contractors connected with the project, the documentation referred to in Article 25 of this Annex, computer records and equipment that it considers relevant. In this connection, it may request that data be handed over to it in an appropriate form in order, for instance, to ascertain the eligibility of the costs.

The Commission shall take appropriate steps to ensure that its authorised representatives treat confidentially the data to which they have access or which have been provided to them.

3. On the basis of the findings made during the financial audit, a provisional report shall be drawn up. It shall be sent by the Commission to the contractor concerned, who may make observations thereon within one month of receiving it.

The final report shall be sent to the contractor concerned. The latter may communicate his observations to the Commission within a month of receiving it. The Commission may decide not to take into account the observations conveyed after that deadline.

On the basis of the conclusions of the audit, the Commission shall take all appropriate measures which it considers necessary, including the issuing of a recovery order regarding all or part of the payments made by it.

4. The Court of Auditors may verify the use made of the Community's financial contribution in the framework of this contract, on the basis of its own rules.

Article 27 - Technical verification of the project

1. The Commission, or any representative authorised by it, may initiate a technical verification of the project up to the contract completion date in order to verify that the project is being or has been carried out in accordance with the conditions indicated by the contractor.

The verification procedure shall be deemed to be initiated on the date of receipt of the relevant registered letter with acknowledgment of receipt sent by the Commission.

It shall be carried out on a confidential basis.

2. The Commission or any authorised representative may have access to the locations and premises where the work is being carried out, and to any document concerning the work, and may request the submission of documents under the same conditions as those set out in Article26(2) of this Annex.

Prior to the carrying out of the technical verification, the Commission shall communicate to the contractors the identity of the authorised representatives who are intended to perform the verification. It shall draw the appropriate conclusions from any objection on the part of contractors based on legitimate interests.

3. Contractors shall provide appropriate assistance to the Commission or its authorised representatives.

4. A report on the technical verification of the project shall be sent to the contractor concerned. The latter may communicate his observations to the Commission within a month of receiving it. The Commission may decide not to take into account the observations conveyed after that deadline.

Article 28 - Technological audit

1. The Commission and its authorised representatives may carry out technological audits in order to satisfy themselves that contractors are fulfilling the intentions referred to in Article 17(3) of this Annex.

They may initiate such audits after the technological implementation plan has been approved, in accordance with Article 16(2) of this Annex, and up to one year after the expiry of the time-limits laid down in it.

The technological audit shall be deemed to be initiated on the date of receipt of the relevant registered letter with acknowledgment of receipt sent by the Commission.

2. In order to carry out their audits, the Commission and its authorised representatives shall have access, on a confidential basis, to all data they consider relevant in the light of Article 17 of this Annex, on whatever medium, in the possession of contractors, and may require it to be handed over to them in an appropriate form.

The Commission shall take appropriate steps to ensure that its authorised representatives treat as confidential the data to which they have access or which have been provided to them. Prior to the carrying out of the technological audit, the Commission shall disclose the identity of the authorised representatives who are intended to perform the audit. The contractors may object to their intervention on the ground of legitimate interests.

3. A technological audit report shall be sent to the contractor concerned. The latter may communicate his observations to the Commission within one month of receiving it. The Commission may decide not to take into account the observations conveyed after that deadline.