Detailed Description of EU Judgment on ERDF Financing Contract<\/title><br \/>\n<\/head><\/p>\n<h3>Detailed Description of EU Judgment on ERDF Financing Contract<\/h3>\n<h4>Case Overview<\/h4>\n<p>The Court of Justice of the European Union (CJEU) delivered a judgment on 17 October 2024 in Case C\u2011701\/22. The case involves a preliminary ruling request from the Curtea de Apel Cluj (Court of Appeal, Cluj, Romania) concerning the interpretation of several provisions related to the European Regional Development Fund (ERDF) under Regulation (EC) No\u00a01083\/2006 and Directive 2011\/7\/EU.<\/p>\n<h4>Key Provisions Analyzed<\/h4>\n<h3>Regulation (EC) No\u00a01083\/2006<\/h3>\n<ul>\n<li><strong>Article\u00a060 \u2013 Principle of Sound Financial Management:<\/strong><br \/>\nMandates the managing authority to oversee and implement operational programs in line with sound financial management. This includes ensuring that funded operations meet applicable criteria and comply with both Community and national regulations throughout their implementation.\n<\/li>\n<li><strong>Article\u00a080 \u2013 Right of Beneficiaries:<\/strong><br \/>\nEnsures that beneficiaries receive the total amount of public contributions promptly and in full. It prohibits deductions, withholdings, or any charges that would reduce the amounts payable to beneficiaries.\n<\/li>\n<li><strong>Article\u00a098 \u2013 Financial Corrections by Member States:<\/strong><br \/>\nSpecifies that Member States are responsible for investigating irregularities related to the management of ERDF funds. Upon detection, they must make appropriate financial corrections, which may include canceling all or part of the public contributions based on the nature and severity of the irregularities.\n<\/li>\n<\/ul>\n<h3>Regulation (EU, Euratom) 2018\/1046<\/h3>\n<ul>\n<li><strong>Point\u00a059 of Article\u00a02 \u2013 Principle of Sound Financial Management:<\/strong><br \/>\nDefines sound financial management as the implementation of the budget adhering to the principles of economy, efficiency, and effectiveness.\n<\/li>\n<\/ul>\n<h3>Directive 2011\/7\/EU on Combating Late Payment<\/h3>\n<ul>\n<li><strong>Article\u00a01 \u2013 Subject Matter and Scope:<\/strong><br \/>\nAims to combat late payments in commercial transactions to ensure the proper functioning of the internal market. It applies to all payments made as remuneration for commercial transactions.\n<\/li>\n<li><strong>Article\u00a02 \u2013 Definition of Commercial Transactions:<\/strong><br \/>\nDefines ‘commercial transactions’ as transactions between undertakings or between undertakings and public authorities that result in the delivery of goods or provision of services for remuneration.\n<\/li>\n<\/ul>\n<h4>Judgment Findings<\/h4>\n<h3>Payment of Default Interest<\/h3>\n<p>The Court held that the principle of sound financial management under Article\u00a060 of Regulation No\u00a01083\/2006 does not prohibit the managing authority from paying default interest for late payments corresponding to eligible expenditure under the ERDF. Additionally, the principle of effectiveness under Article\u00a080 ensures that national laws cannot exclude the payment of such interest based on provisions that only allow interest after a specific repayment period.<\/p>\n<h3>Reduction of Default Interest Due to Irregularities<\/h3>\n<p>The Court determined that Articles\u00a02(7) and\u00a098(1)-(2) of Regulation No\u00a01083\/2006 do not prevent a national court from reducing the amount of default interest owed to an ERDF beneficiary due to detected irregularities in the financing contract, provided such reductions adhere to the principle of proportionality.<\/p>\n<h3>Applicability of Directive 2011\/7\/EU<\/h3>\n<p>It was concluded that Directive 2011\/7\/EU does not apply to financing contracts between a managing authority of a Member State and a profit-making undertaking where the contract’s purpose is the ERDF’s co-financing of a project involving the purchase of equipment from a third party. This exclusion is based on the nature of the transaction not fitting the directive’s definition of ‘commercial transactions’.<\/p>\n<h4>Implications of the Judgment<\/h4>\n<p>This judgment clarifies the application of EU financial regulations and directives in cases involving ERDF financing contracts. It reinforces the rights of beneficiaries to receive payments promptly and in full, including default interest for late payments, while outlining the boundaries within which national courts can adjust such interest in the presence of contractual irregularities.[:]<\/p>\n","protected":false},"excerpt":{"rendered":"<p>[:uk] Detailed Description of EU Judgment on ERDF Financing Contract Detailed Description of EU Judgment on ERDF Financing Contract Case Overview The Court of Justice of the European Union (CJEU) delivered a judgment on 17 October 2024 in Case C\u2011701\/22. The case involves a preliminary ruling request from the Curtea de Apel Cluj (Court of…<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_bbp_topic_count":0,"_bbp_reply_count":0,"_bbp_total_topic_count":0,"_bbp_total_reply_count":0,"_bbp_voice_count":0,"_bbp_anonymous_reply_count":0,"_bbp_topic_count_hidden":0,"_bbp_reply_count_hidden":0,"_bbp_forum_subforum_count":0,"pmpro_default_level":"","footnotes":""},"categories":[42,13],"tags":[],"class_list":["post-810","post","type-post","status-publish","format-standard","hentry","category-eu-legislation-important","category-eu-legislation-general-en","pmpro-has-access"],"acf":{"patreon-level":0},"_links":{"self":[{"href":"https:\/\/lexcovery.com\/en\/wp-json\/wp\/v2\/posts\/810","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lexcovery.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lexcovery.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lexcovery.com\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/lexcovery.com\/en\/wp-json\/wp\/v2\/comments?post=810"}],"version-history":[{"count":1,"href":"https:\/\/lexcovery.com\/en\/wp-json\/wp\/v2\/posts\/810\/revisions"}],"predecessor-version":[{"id":1196,"href":"https:\/\/lexcovery.com\/en\/wp-json\/wp\/v2\/posts\/810\/revisions\/1196"}],"wp:attachment":[{"href":"https:\/\/lexcovery.com\/en\/wp-json\/wp\/v2\/media?parent=810"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lexcovery.com\/en\/wp-json\/wp\/v2\/categories?post=810"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lexcovery.com\/en\/wp-json\/wp\/v2\/tags?post=810"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}

{"id":810,"date":"2024-10-18T09:30:08","date_gmt":"2024-10-18T06:30:08","guid":{"rendered":"https:\/\/lexcovery.com\/2024\/10\/judgment-of-the-court-third-chamber-of-17-october-2024-sc-aa-srl-v-mfe-reference-for-a-preliminary-ruling-european-regional-development-fund-erdf-regulation-ec-no-1083-2006\/"},"modified":"2024-10-30T16:52:43","modified_gmt":"2024-10-30T14:52:43","slug":"judgment-of-the-court-third-chamber-of-17-october-2024-sc-aa-srl-v-mfe-reference-for-a-preliminary-ruling-european-regional-development-fund-erdf-regulation-ec-no-1083-2006","status":"publish","type":"post","link":"https:\/\/lexcovery.com\/en\/2024\/10\/judgment-of-the-court-third-chamber-of-17-october-2024-sc-aa-srl-v-mfe-reference-for-a-preliminary-ruling-european-regional-development-fund-erdf-regulation-ec-no-1083-2006\/","title":{"rendered":"[:uk]Judgment of the Court (Third Chamber) of 17 October 2024.SC AA SRL v MFE.Reference for a preliminary ruling \u2013 European Regional Development Fund (ERDF) \u2013 Regulation (EC) No 1083\/2006 \u2013 Article 60 \u2013 Principle of sound financial management \u2013 Article 80 \u2013 Right of beneficiaries to receive payments as soon as possible and in full \u2013 Right to obtain interest for late payment \u2013 Principles of effectiveness and equivalence \u2013 Termination of an ERDF financing contract on account of irregularities in its performance \u2013 Annulment of that termination \u2013 Correction of the irregularities \u2013 Combating late payment in commercial transactions \u2013 Directive 2011\/7\/EU \u2013 Scope.Case C-701\/22.[:]"},"content":{"rendered":"

[:uk]<\/p>\n

\n
\nDetailed Description of EU Judgment on ERDF Financing Contract<\/title><br \/>\n<\/head><\/p>\n<h3>Detailed Description of EU Judgment on ERDF Financing Contract<\/h3>\n<h4>Case Overview<\/h4>\n<p>The Court of Justice of the European Union (CJEU) delivered a judgment on 17 October 2024 in Case C\u2011701\/22. The case involves a preliminary ruling request from the Curtea de Apel Cluj (Court of Appeal, Cluj, Romania) concerning the interpretation of several provisions related to the European Regional Development Fund (ERDF) under Regulation (EC) No\u00a01083\/2006 and Directive 2011\/7\/EU.<\/p>\n<h4>Key Provisions Analyzed<\/h4>\n<h3>Regulation (EC) No\u00a01083\/2006<\/h3>\n<ul>\n<li><strong>Article\u00a060 \u2013 Principle of Sound Financial Management:<\/strong><br \/>\nMandates the managing authority to oversee and implement operational programs in line with sound financial management. This includes ensuring that funded operations meet applicable criteria and comply with both Community and national regulations throughout their implementation.\n<\/li>\n<li><strong>Article\u00a080 \u2013 Right of Beneficiaries:<\/strong><br \/>\nEnsures that beneficiaries receive the total amount of public contributions promptly and in full. It prohibits deductions, withholdings, or any charges that would reduce the amounts payable to beneficiaries.\n<\/li>\n<li><strong>Article\u00a098 \u2013 Financial Corrections by Member States:<\/strong><br \/>\nSpecifies that Member States are responsible for investigating irregularities related to the management of ERDF funds. Upon detection, they must make appropriate financial corrections, which may include canceling all or part of the public contributions based on the nature and severity of the irregularities.\n<\/li>\n<\/ul>\n<h3>Regulation (EU, Euratom) 2018\/1046<\/h3>\n<ul>\n<li><strong>Point\u00a059 of Article\u00a02 \u2013 Principle of Sound Financial Management:<\/strong><br \/>\nDefines sound financial management as the implementation of the budget adhering to the principles of economy, efficiency, and effectiveness.\n<\/li>\n<\/ul>\n<h3>Directive 2011\/7\/EU on Combating Late Payment<\/h3>\n<ul>\n<li><strong>Article\u00a01 \u2013 Subject Matter and Scope:<\/strong><br \/>\nAims to combat late payments in commercial transactions to ensure the proper functioning of the internal market. It applies to all payments made as remuneration for commercial transactions.\n<\/li>\n<li><strong>Article\u00a02 \u2013 Definition of Commercial Transactions:<\/strong><br \/>\nDefines ‘commercial transactions’ as transactions between undertakings or between undertakings and public authorities that result in the delivery of goods or provision of services for remuneration.\n<\/li>\n<\/ul>\n<h4>Judgment Findings<\/h4>\n<h3>Payment of Default Interest<\/h3>\n<p>The Court held that the principle of sound financial management under Article\u00a060 of Regulation No\u00a01083\/2006 does not prohibit the managing authority from paying default interest for late payments corresponding to eligible expenditure under the ERDF. Additionally, the principle of effectiveness under Article\u00a080 ensures that national laws cannot exclude the payment of such interest based on provisions that only allow interest after a specific repayment period.<\/p>\n<h3>Reduction of Default Interest Due to Irregularities<\/h3>\n<p>The Court determined that Articles\u00a02(7) and\u00a098(1)-(2) of Regulation No\u00a01083\/2006 do not prevent a national court from reducing the amount of default interest owed to an ERDF beneficiary due to detected irregularities in the financing contract, provided such reductions adhere to the principle of proportionality.<\/p>\n<h3>Applicability of Directive 2011\/7\/EU<\/h3>\n<p>It was concluded that Directive 2011\/7\/EU does not apply to financing contracts between a managing authority of a Member State and a profit-making undertaking where the contract’s purpose is the ERDF’s co-financing of a project involving the purchase of equipment from a third party. This exclusion is based on the nature of the transaction not fitting the directive’s definition of ‘commercial transactions’.<\/p>\n<h4>Implications of the Judgment<\/h4>\n<p>This judgment clarifies the application of EU financial regulations and directives in cases involving ERDF financing contracts. It reinforces the rights of beneficiaries to receive payments promptly and in full, including default interest for late payments, while outlining the boundaries within which national courts can adjust such interest in the presence of contractual irregularities.[:]<\/p>\n","protected":false},"excerpt":{"rendered":"<p>[:uk] Detailed Description of EU Judgment on ERDF Financing Contract Detailed Description of EU Judgment on ERDF Financing Contract Case Overview The Court of Justice of the European Union (CJEU) delivered a judgment on 17 October 2024 in Case C\u2011701\/22. The case involves a preliminary ruling request from the Curtea de Apel Cluj (Court of…<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_bbp_topic_count":0,"_bbp_reply_count":0,"_bbp_total_topic_count":0,"_bbp_total_reply_count":0,"_bbp_voice_count":0,"_bbp_anonymous_reply_count":0,"_bbp_topic_count_hidden":0,"_bbp_reply_count_hidden":0,"_bbp_forum_subforum_count":0,"pmpro_default_level":"","footnotes":""},"categories":[42,13],"tags":[],"class_list":["post-810","post","type-post","status-publish","format-standard","hentry","category-eu-legislation-important","category-eu-legislation-general-en","pmpro-has-access"],"acf":{"patreon-level":0},"_links":{"self":[{"href":"https:\/\/lexcovery.com\/en\/wp-json\/wp\/v2\/posts\/810","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lexcovery.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lexcovery.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lexcovery.com\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/lexcovery.com\/en\/wp-json\/wp\/v2\/comments?post=810"}],"version-history":[{"count":1,"href":"https:\/\/lexcovery.com\/en\/wp-json\/wp\/v2\/posts\/810\/revisions"}],"predecessor-version":[{"id":1196,"href":"https:\/\/lexcovery.com\/en\/wp-json\/wp\/v2\/posts\/810\/revisions\/1196"}],"wp:attachment":[{"href":"https:\/\/lexcovery.com\/en\/wp-json\/wp\/v2\/media?parent=810"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lexcovery.com\/en\/wp-json\/wp\/v2\/categories?post=810"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lexcovery.com\/en\/wp-json\/wp\/v2\/tags?post=810"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}