Explanatory Memorandum to COM(2020)141 - Amendment of Regulation (EU) No 223/2014 as regards the introduction of specific measures for addressing the COVID-19 crisis

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dossier COM(2020)141 - Amendment of Regulation (EU) No 223/2014 as regards the introduction of specific measures for addressing the COVID-19 crisis.
source COM(2020)141 EN
date 02-04-2020


1. CONTEXT OF THE PROPOSAL

• Reasons for and objectives of the proposal

The direct and indirect effects of the COVID-19 outbreak continue to increase in all Member States. The current situation is unprecedented and requires exceptional measures adapted to the situation to be applied in these circumstances.

The first “Coronavirus Response Investment Initiative” (CRII), a package of measures proposed by the Commission on 13 March 2020, introduced a number of important changes that allow for a more effective response in the current situation.

This initiative was directed at promoting investments by mobilising available cash reserves in the European Structural and Investment Funds (ESI Funds), to fight the crisis immediately, followed by complementary measures as proposed under the Coronavirus Response Investment Initiative Plus. Nevertheless, additional measures are necessary, including in other policy areas, in particular in order to protect the most vulnerable.

The coronavirus crisis also presents an unprecedented challenge for the operations and delivery to the most deprived supported by the Fund for European Aid to the Most Deprived (FEAD).

Most importantly, the crisis presents specific risks to the most deprived, among the most vulnerable in our societies. Therefore, specific measures, need to be taken urgently in order to protect them from falling victim to this disease and to ensure that the FEAD assistance still reaches them, such as by providing the necessary protective equipment against the disease. The distribution of food and basic material assistance, as well as social inclusion support, is facing increasingly logistical and human resource constraints, notably due to the confinement and urgent need to instate social distancing measures to contain the spread of the virus. Many of the volunteers, who are the backbone of the Fund, can no longer be mobilised, as they often belong to groups at a higher risk of severe illness caused by COVID-19. There is, nonetheless, the need to ensure that the support is still reaching the most deprived, e.g. through new methods of delivery which ensure the safety of all those people involved in the implementation of the FEAD and of the most deprived.

The FEAD Regulation needs therefore to enable Managing Authorities, partner organisations and other actors involved in the implementation of the Fund to react quickly to the emerging additional needs of the target groups who are exposed to further hardship stemming from this crisis.

Accordingly, the Commission proposes to amend the FEAD Regulation in order to respond to the challenges faced by public authorities and partner organisations in the implementation of the FEAD during the COVID-19 outbreak.

In line with the amendments proposed for the ESI Funds, it is proposed to introduce specific provisions which allow Member States to quickly put in place the necessary measures for addressing this emergency situation. Similar to what was proposed for the ESI Funds, it is proposed that the expenditure for those FEAD operations that are fostering crisis response capacities to the COVID-19 outbreak should be eligible as of 1 February 2020. Likewise, it is proposed that the amendment of certain elements of the operational programme aimed at addressing the COVID-19 outbreak, does not require approval by Commission decision. Furthermore, the proposal introduces the possibility for authorities to deliver food aid/basic material assistance through electronic vouchers as it reduces the risk of contamination during the delivery of food/basic material assistance.

In addition to these changes, it is also proposed to introduce flexibility regarding the respect of certain legal requirements during this unprecedented period. Exceptionally for this year, it is proposed that the deadline for submitting the Annual Implementation Report is extended and it is clarified that Member States may adjust control and audit procedures during the outbreak. It is also proposed to introduce specific provisions regarding the eligibility of costs incurred by beneficiaries in case the delivery of food/basic material assistance or social assistance is delayed as well as for suspended and not fully implemented operations.

Finally, in order to ensure that all support from the Fund can be mobilised to minimise the effects of the public health crisis on the most deprived, as a temporary and exceptional measure, without prejudice to the rules that should apply under regular circumstances, it is necessary to allow for the temporary possibility of 100% co-financing from the EU budget.

• Consistency with existing policy provisions in the policy area

This proposal is consistent with existing policy provisions in the policy area, in particular with provisions proposed by the Commission for the ESI Funds in response to the COVID-19 outbreak, as part of the CRII and CRII plus.

• Consistency with other Union policies

The proposal is consistent with other proposals and initiatives adopted by the European Commission, in particular with the proposals adopted by the Commission for the ESI Funds in response to the COVID-19 outbreak. It is also part of a second legislative package adopted by the Commission, which includes proposals to amend the Common Provisions Regulation.

2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

• Legal basis

The proposal is based on Article 175(3) of the Treaty on the Functioning of the European Union. It provides for a temporary possibility for a co-financing rate of 100%, as well as clarity on the eligibility of expenditure affected by the measures put in place as a response to the health crisis. It finally alleviates some requirements for Member States where these create administrative burdens that could delay implementation of measures to respond to the crisis. These exceptional changes are without prejudice to the rules that apply under regular circumstances.

• Subsidiarity (for non-exclusive competence)

The proposal complies with the subsidiarity principle.

• Proportionality

The proposal is proportionate and does not include provisions which are not necessary to achieve the objectives of the Treaty. It is limited to the amendments considered necessary for addressing the problems faced by Member States during the COVID-19 crisis in the context of the implementation of the FEAD.

• Choice of the instrument

Proposed instrument: amendment of the current regulation.

The Commission has explored the scope for manoeuvre provided by the legal framework and considers it necessary to propose amendments to Regulation (EU) No 223/2014.

3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS

• Ex-post evaluations/fitness checks of existing legislation

Given the specific circumstances of this proposal, there was no ex-post evaluation/or fitness checks of the existing legislation.

• Stakeholder consultations

Given the specific circumstances of this proposal, there was no consultation of external stakeholders.

• Collection and use of expertise

Use of external expertise has not been necessary.

• Impact assessment

Not applicable.

• Regulatory fitness and simplification

There is not an initiative within the Regulatory Fitness Programme (REFIT)

• Fundamental rights

The proposal has no consequences for the protection of fundamental rights.

4. BUDGETARY IMPLICATIONS

The proposed modification does not imply any changes in the Multiannual Financial Framework annual ceilings for commitments and payments as per Regulation (EU) No 223/2014. The total annual breakdown of commitment appropriations for the Fund for European Aid to the Most Deprived remains unchanged.    

The proposal will facilitate an acceleration of programme implementation and result in a frontloading of payment appropriations.

The Commission will carefully monitor the impact of the proposed modification on payment appropriations in 2020 taking into account both the implementation of the budget and revised Member States forecasts.

5. OTHER ELEMENTS

• Implementation plans and monitoring, evaluation and reporting arrangements

The implementation of the measures will be monitored and reported upon in the framework of the general reporting mechanisms established in Regulation (EU) No 223/2014.

• Explanatory documents (for directives)

N/A