Division 3.3 Categories of legal entities subject to (or exempted from) a verification of their financial capacityF1

In compliance with the FR and its IR (article 176(4)), the following categories of legal entities are not subject to a verification of their financial capacity:

• natural persons in receipt of scholarships;

• public bodies;

• international organisations referred to in Article 43(2) of the IR:

  • international public-sector organisations set up by intergovernmental agreements, and specialised agencies set up by such organisations;

  • the International Committee of the Red Cross (ICRC);

  • the International Federation of National Red Cross and Red Crescent Societies;

  • the European Investment Bank and the European Investment Fund.

Moreover, due to the introduction in the FP7 RP of a Participants' Guarantee Fund:

• in compliance with article 38 of the FP7 RP (paragraphs 5 and 6), the following categories of legal entities are not subject to a verification of their financial capacity:

  • legal entities whose participation in the indirect action is guaranteed by a Member State or an Associated country;

  • higher and secondary education establishments.

• In addition, in compliance with paragraph 6 of article 38 of the FP7 RP, any other category of legal entities applying for an EU financial contribution in an FP7 indirect action inferior or equal to EUR 500 000, are also not subject to a verification of their financial capacity, except if:

  • the legal entity is the coordinator of the indirect action and it does not belong to one of the above-mentioned categories; and/or

  • in exceptional circumstances, according to information already available to the services implementing FP7, there are justified grounds to doubt the financial capacity of an applicant (eg.: if there are findings of serious administrative errors or fraud involving the entity; or if the entity is subject to pending legal procedures or judicial proceedings for serious administrative errors or fraud; or if the entity is subject to an attachment order or significant recovery order for an outstanding amount issued by the Commission on which the payment is significantly overdue); or

  • it has been subject to substantial financial findings relating to its financial capacity following a financial audit carried out by the Commission, the Court of Auditors or their duly authorised representatives within the last 2 years).

For any other legal entity participating in an FP7 indirect action, a verification of its financial capacity is mandatory.

A decision tree to identify categories of legal entities subject to a verification of their financial capacity is provided in the next page.