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Financial guarantee

If the financial capacity is not considered satisfactory, the National or Executive Agency may require any beneficiary which has been awarded a grant exceeding 60 000 EUR to lodge a guarantee in advance in order to limit the financial risks connected with the pre-financing payment. This guarantee can be requested for up to the same amount of the pre-financing payment(s).

The purpose of such guarantee is to make a bank or financial institution stand as irrevocable collateral security or first-call guarantor of the beneficiary’s obligations deriving from the grant agreement or grant decision.

This financial guarantee, in euro, shall be provided by an approved bank or financial institution established in an EU Member State. When the beneficiary is established in a non-EU country, the National or Executive Agency may agree that a bank or financial institution established in such country provides the guarantee, if it considers that the bank or financial institution offers equivalent financial security and characteristics as those offered in an EU Member State.

The guarantee may be replaced by a joint third-party guarantee, or from several third-party guarantees from the participating organisations who are parties to the same grant agreement.

The guarantee will be released after the pre-financing is gradually cleared against an interim payment or payment of the balance to the beneficiary, in accordance with the conditions laid down in the grant agreement or grant decision. In case the payment of the balance takes the form of a recovery, the guarantee will be released after the beneficiary is notified.