PART TWOCOMMON PROVISIONS

TITLE VIIPROJECTS

CHAPTER 3 Eligibility of expenditure

Article 49Non-eligible costs

1.

The following costs relating to the implementation of the project shall not be considered eligible:

(a)

debts and debt service charges (interest);

(b)

provisions for losses or liabilities;

(c)

costs declared by the beneficiary and already financed by the Union budget;

(d)

purchases of land or buildings for an amount exceeding 10 % of the eligible expenditure of the project concerned;

(e)

exchange-rate losses;

(f)

duties, taxes and charges, including VAT, except where non-recoverable under the relevant national tax legislation, unless otherwise provided in appropriate provisions negotiated with CBC partner countries;

(g)

loans to third parties;

(h)

fines, financial penalties and expenses of litigation;

(i)

contributions in kind as defined in Article 14(1).

2.

Pursuant to Article 4 a programme may declare other categories of costs as ineligible.