Division 3.1 PrinciplesF1

The verification of the financial capacity to carry out the proposed action is an integral part of the negotiation stage and needs to be completed before the signature of the grant agreement.

The following rules specify the minimum requirements for financial checks that authorising officers must conduct in accordance with Article 16(4) of the FP7 RP and with Articles 173 and 176 of the IR of the FR.

The verification of the financial capacity of an applicant to carry out the action essentially proceeds in four steps:

• As a first step, legal entities subject to a mandatory verification of their financial capacity are identified in accordance with FP7 RP, the FR and its IR (see section 3.3);

• In a second step, these legal entities provide – if not already available – their financial information and relevant supporting documents covering the last closed financial year (see section 3.4); the information is then verified by the validation services.

• In a third step, on the basis of the above, the validation services will proceed with a concise financial analysis on the last closed financial year. This concise financial analysis will consist of:

  • a financial viability check (see section 3.5);

  • in addition the Equity flag will be checked (see section 3.5);

  • a co-financing capacity's check and financial exposure flag (if relevant) (see section 3.6).

• Finally, as a fourth step, on the basis of the above, the authorising officer will take the appropriate measures, including, if necessary, a more in-depth financial analysis. (See Section 4).

The same procedure and documents, as described hereafter, will be used/requested for legal entities joining an indirect action during the negotiation or the implementation of this indirect action.