Republic of Latvia Cabinet Regulation No. 34 Adopted 9 January 2024

Regulations Regarding the Implementation of Investment 2.2.1.3.i "Aid for the Introduction of New Products and Services into Entrepreneurship" of Reform and Investment Direction 2.2 "Digital Transformation and Innovations of Enterprises" of the Plan for Recovery and Resilience Facility of Latvia

Issued pursuant to
Section 19.³, Paragraph two
of the Law on Budget and Financial Management

I. General Provisions

1. The Regulation prescribes the procedures for the implementation and supervision of Investment 2.2.1.3.i "Aid for the Introduction of New Products and Services into Entrepreneurship" (hereinafter - the Investment) of Reform and Investment Direction 2.2 "Digital Transformation and Innovations of Enterprises" of the Plan for Recovery and Resilience Facility of Latvia (hereinafter - the Recovery Fund), including:

1.1. the objectives and the target group of the Investment;

1.2. the funding available for the Investment;

1.3. the requirements for the project applicant and cooperation partner;

1.4. the conditions for the aided activity and for the eligibility of costs;

1.5. the obligations and rights of the involved authorities and the beneficiary.

2. The following terms are used in the Regulation:

2.1. digital development roadmap - an in-depth assessment led and established by an expert of the European Digital Innovation Hub within the scope of the digital maturity assessment of the investments required for the cooperation partner to promote digital transformation;

2.2. European Digital Innovation Hub - a candidate institution selected in the national selection procedure of Latvia which has submitted an application for a call for proposals of the European Commission for the establishment of European Digital Innovation Hubs in accordance with Regulation (EU) 2021/694 of the European Parliament and of the Council of 29 April 2021 establishing the Digital Europe Programme and repealing Decision (EU) 2015/2240, and a legal person selected in accordance with Article 16 of the abovementioned Regulation;

2.3. beneficiary - a project applicant with whom the Central Finance and Contracting Agency (hereinafter - the Agency) has entered into a contract for the project implementation and who has been granted funding from the Recovery Fund for the project implementation in order to promote the achievement of objectives of the long-term strategy for smart specialisation;

2.4. large entrepreneur - an entrepreneur which complies with Article 2(24) of Commission Regulation (EU) No 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty (hereinafter - Commission Regulation No 651/2014);

2.5. second digital maturity assessment - assessment of the existing digital and innovation maturity of the cooperation partner which, after project implementation, may be performed by the cooperation parter independently or in cooperation with the European Digital Innovation Hub, and the opinion of an expert of the European Digital Innovation Hub on the conformity of the project implementation with the digital development roadmap;

2.6. research project - a set of documents submitted to the beneficiary (including a research project application and the research project description (Annex 1)) which has been prepared by the cooperation partner in accordance with the developed conditions for the implementation of the research project and which has been evaluated by the research project evaluation commission, and in respect of which the Agency has taken the decision to grant aid for commercial activity;

2.7. research project evaluation commission - an advisory commission established by the beneficiary to evaluate all research projects submitted in the relevant project application selection;

2.8. research and knowledge-dissemination organisation - an organisation that conforms to the conditions of Article 2(83) of Commission Regulation No 651/2014;

2.9. project applicant - a legal person registered in the Republic of Latvia which submits the project application;

2.10. cooperation partner - an entrepreneur, a branch of a foreign entrepreneur, a recognised agricultural service cooperative society, or a research and knowledge-dissemination organisation that plans to implement a research project within the framework of the beneficiary's project (hereinafter - the project);

2.11. initial digital maturity assessment - an assessment of existing digital and innovation maturity of the cooperation partner which is carried out by the co-operation partner in cooperation with the European Digital Innovation Hub in order to determine the digitisation needs of the cooperation partner and the ability to use digital technologies defined in the digital development roadmap;

2.12. micro, small, and medium-sized entrepreneur - an entrepreneur which complies with Annex I to Commission Regulation No 651/2014;

2.13. long-term strategy for smart specialisation - a document in which entrepreneurs of the relevant sector, non-governmental organisations, scientists, and the management group of the area of the long-term strategy for smart specialisation define, approve, and coordinate the directions and actions for the development of smart specialisation, at least once a year review the competitive advantages that enhance competitiveness, the regulatory and business environment framework, the cooperation between stakeholders in creating new knowledge and introducing new products and technologies. The long-term strategy for smart specialisation shall identify barriers and limitations to the transition to knowledge-intensive activities, and measures to improve laws and regulations, business environment and also education and research systems to remove such barriers.

3. The objective of the Investment is to ensure the availability of funding for the digital transformation of entrepreneurs, including the introduction of modern automation, robotisation, and work control tools in the production facility, attracting private co-funding for the implementation of innovations.

4. The target group of the Investment shall be micro, small, medium-sized, and large entrepreneurs, including State capital companies and research and knowledge-dissemination organisations that develop products, services, and technologies in the fields of smart specialisation.

5. The total available funding from the Recovery Fund within the framework of the Investment shall be EUR 24 300 000.

6. The maximum permissible funding from the Recovery Fund within the framework of one project shall be EUR 3 037 500.

7. The indicators to be achieved within the framework of the Investment:

7.1. the objectives:

7.1.1. 14 research projects have been approved by 30 June 2024;

7.1.2. 43 research projects have been approved by 30 June 2026;

7.1.3. private funding in the amount of EUR 4 860 000 has been attracted by 30 June 2026;

7.2. supervision indicators:

7.2.1. private funding in the amount of EUR 3 888 000 has been attracted by 31 December 2025;

7.2.2. private funding in the amount of EUR 2 430 000 has been attracted by 31 December 2024;

7.2.3. 28 research projects have been approved by 30 June 2025;

7.3. total indicators:

7.3.1. entrepreneurs which receive aid for the development or introduction of digital products, services, and applications:

7.3.1.1. entrepreneurs aided in order to develop digital technologies and solutions;

7.3.1.2. entrepreneurs aided in order to adopt digital solutions to transform their services, products, or processes;

7.3.2. aided entrepreneurs (micro, small, medium-sized, and large).

8. Within the scope of this Regulation, data on the following national indicators in respect of the area of smart specialisation shall be entered into the Cohesion Policy Funds Management Information System (hereinafter - the Management Information System) that are to be achieved by 30 June 2026:

8.1. public funding and private investments that supplement aid for commercial activity for innovation or research projects (EUR):

8.1.1. amount of research and development expenditure - public funding (EUR);

8.1.2. amount of research and development expenditure - private investments (EUR);

8.2. number of newly created products, services, and technologies in entrepreneurs after receipt of aid:

8.2.1. newly created products (number);

8.2.2. newly created technologies (number);

8.2.3. newly created services (number);

8.3. research projects that involve cooperation between entrepreneurs and research and knowledge-dissemination organisations (number);

8.4. new workplaces created through the implementation of research projects (number);

8.5. amount of remuneration in the newly created workplaces within the framework of the project (EUR);

8.6. additional investments by entrepreneurs (EUR) in research and development beyond the implementation of the research project;

8.7. foreign funding attracted (EUR) (from international research programmes or foreign partners) for research in the sector of entrepreneurship;

8.8. licensing contracts (number) entered into by the entrepreneur for the commercialisation of intellectual property created as a result of the implementation of the research project;

8.9. net turnover of the entrepreneur (EUR) from the introduction of the result of the research project in economic activity or from the commercialisation thereof;

8.10. number of doctoral students and post-doctoral graduates involved in research projects:

8.10.1. scientific staff (number):

8.10.1.1. scientific staff - young scientists (number);

8.10.1.2. scientific staff - master's students (number);

8.10.1.3. scientific staff - doctoral students and doctoral degree candidates (number);

8.10.2. scientific staff (full-time equivalent):

8.10.2.1. scientific staff - young scientists (full-time equivalent);

8.10.2.2. scientific staff - master's students (full-time equivalent);

8.10.2.3. scientific staff - doctoral students and doctoral degree candidates (full-time equivalent);

8.10.3. scientific technical staff (number):

8.10.3.1. scientific technical staff - young scientists (number);

8.10.3.2. scientific technical staff - master's students (number);

8.10.3.3. scientific technical staff - doctoral students and doctoral degree candidates (number);

8.10.4. scientific technical staff (full-time equivalent):

8.10.4.1. scientific technical staff - young scientists (full-time equivalent);

8.10.4.2. scientific technical staff - master's students (full-time equivalent);

8.10.4.3. scientific technical staff - doctoral students and doctoral degree candidates (full-time equivalent);

8.11. number of scientific publications;

8.12. net turnover of newly created products, services, or technologies (EUR) within the framework of the project compared to the first year of the project implementation;

8.13. export of newly created products, services, or technologies (EUR) within the framework of the project compared to the first year of the project implementation;

8.14. external expenditure for research work ordered at other institutions, enterprises, organisations (amount of research and development expenditure, EUR);

8.15. capital expenditure - buildings, equipment, intellectual property rights, computer software (amount of research and development expenditure, EUR);

8.16. created industrial property objects (number):

8.16.1. created industrial property objects - patent and patent applications (number);

8.16.2. created industrial property objects - plant varieties (number);

8.16.3. created industrial property objects - registered designs (number);

8.16.4. created industrial property objects - semiconductor product or application thereof (number);

8.16.5. created industrial property objects - trademark (including collective marks) and certification mark (number).

9. The objectives referred to in Sub-paragraphs 7.1.1 and 7.1.2 of this Regulation shall be achieved if the Ministry of Economics (hereinafter - the sectoral ministry) separately develops a summary document for each objective that includes the justification for how the objective was achieved, with references to websites where the documents supporting the objective are available.

10. The following shall be added to the summary document referred to in Paragraph 9 of this Regulation:

10.1. the list of aided projects which indicates the amount of the contracts for the project implementation;

10.2. copies of decisions of the Agency approving projects, granting funding, and ensuring conformity with the principle "do no significant harm" in accordance with Article 2(6) of Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February2021 establishing the Recovery and Resilience Facility(hereinafter - Regulation 2021/241), and granting a grant to a cooperation partner in the amount of not more than EUR 1 000 000;

10.3. a declaration that the beneficiary has not provided aid for the purchase of facilities for the European Union Emissions Trading System. The declaration shall include the following additional information:

10.3.1. equipment ID or aircraft operator ID in the European Union Transaction Log (EUTL) created by Article 6 of Commission Regulation (EU) No 389/2013 of 2 May 2013 establishing a Union Registry pursuant to Directive 2003/87/EC of the European Parliament and of the Council, Decisions No 280/2004/EC and No 406/2009/EC of the European Parliament and of the Council and repealing Commission Regulations (EU) No 920/2010 and No 1193/2011;

10.3.2. the projected level of greenhouse gas emissions per unit of product in the granted projects which include measures that correspond to the European Union Emissions Trading System;

10.3.3. a brief description of the project and the technologies used.

11. The objective referred to in Sub-paragraph 7.1.3 of this Regulation is achieved if the sectoral ministry draws up a summary document not later than by 30 June 2026 which includes the justification of how the objective was achieved, together with references to the websites where the documents justifying the objective are available.

12. The following shall be added to the summary document referred to in Paragraph 11 of this Regulation:

12.1. the list of the contracts for the project implementation concluded between the Agency and the beneficiary with indicated private investments made in the project;

12.2. the list and description of completed projects.

13. Aid within the framework of the Investment shall be provided in the form of a grant.

14. The sectoral ministry and the Agency shall ensure the implementation of the Investment in accordance with the laws and regulations regarding the implementation of the Recovery Fund plan according to their competence.

15. The sectoral ministry within the framework of the Investment shall be responsible for the achievement of the indicators referred to in Paragraph 7 of this Regulation. The beneficiary shall be responsible for the achievement of the indicators specified within the framework of the project in accordance with Paragraph 7 of this Regulation.

16. The place of the implementation of the project and research project of the beneficiary shall be the Republic of Latvia.

II. Criteria for the Evaluation of the Project Application and Selection Procedures

17. The method of implementing the Investment shall be an open selection of project applications.

18. The Agency shall announce the project application selection by publishing information on the announcement, extension, suspension, or termination of the project application selection in the official gazette Latvijas Vēstnesis and on the website www.cfla.gov.lv. The deadline for the submission of project applications to the Agency shall be set not shorter than one month.

19. The project applicant may submit one project application within the framework of one open project application selection process.

20. The project applicant shall submit the project application in the Management Information System accompanied by the following documents and information:

20.1. the project activity plan which has been developed by taking into account the objectives and research directions defined in the long-term strategy for smart specialisation in accordance with Annex 2 to this Regulation;

20.2. the criteria for the evaluation of the research project in accordance with Sub-paragraph 82.2.16 of this Regulation;

20.3. a printout of the form "Form Regarding Information to be Provided for Accounting and Granting of de minimis Aid" prepared in the de minimis aid accounting system (applicable if the project application does not specify the identification number of the form created and approved in the de minimis aid accounting system);

20.4. a declaration that the project applicant has developed an internal control system for the prevention of fraud, corruption, and a conflict of interest;

20.5. a declaration that the activities envisaged in the project are not aimed at the activities referred to in Paragraphs 34, 48, and 50 of this Regulation;

20.6. a list of shareholders or members of the project applicant, indicating the name, registration number, and financial indicators if it is used to justify the financial indicators referred to in Sub-paragraphs 31.2 and 31.3 of this Regulation;

20.7. an itemised list of the cost estimate indicated in the budget of the project which justifies the amount of the planned costs (information on the market surveys conducted, statistical data, experience in similar projects).

21. For the evaluation of project applications, the Agency shall establish a project application evaluation commission composed of representatives of the Agency and at least one representative from the sectoral ministry.

22. After expiry of the deadline for the submission of project applications, the project application evaluation commission shall evaluate and rank the received project applications according to the criteria for the evaluation of project applications referred to in Annex 3 to this Regulation, taking into account the following:

22.1. exclusion criteria in accordance with the requirements laid down in Paragraph 33 of this Regulation. If it is established that at least one of the exclusion criteria applies to the project applicant, the project application shall not be evaluated further;

22.2. eligibility criteria in accordance with the requirements laid down in Paragraph 31 of this Regulation that include general and specific eligibility criteria of projects to ascertain that the project application meets the conditions for qualifying for funding within the framework of the Investment and corresponding to the "do no significant harm" principle;

22.3. that the quality criteria shall include the minimum quality requirements for the project application in accordance with Sub-paragraphs 31.2 and 31.3 of this Regulation and the following additional requirements:

22.3.1. experience of the project manager in the management of innovation projects over the last 10 years;

22.3.2. experience of the project applicant in Latvian or international (implemented with the involvement of a foreign partner) innovation projects over the last 10 years;

22.3.3. quality criteria regarding horizontal priorities;

22.4. that the project applications meeting the quality criteria shall be ranked according to the highest total number of points obtained in the quality criteria and priority shall be given to the project application with the highest total number of points;

22.5. that in the case of equal number of total points, priority shall be given to the project application with the highest overall amounts (EUR) in the following criteria:

22.5.1. the amount of export in the last closed financial year of the project applicant and shareholders or members thereof (unrelated micro, small, medium-sized, and large entrepreneurs), excluding research and knowledge-dissemination organisations and local governments, or the total amount of export in the last closed financial year until the submission of the project application for the sectoral association which unites performers of economic activity in the sector, excluding research and knowledge-dissemination organisations and local governments, and has provided a comfort letter in respect of the relevance of the project to the development of the sector;

22.5.2. the amount of turnover in the last closed financial year of the project applicant and shareholders or members thereof (unrelated micro, small, medium-sized, and large entrepreneurs), excluding research and knowledge-dissemination organisations and local governments, or the total amount of turnover in the last closed financial year until the submission of the project application for the sectoral association which unites performers of economic activity in the sector, excluding research and knowledge-dissemination organisations and local governments, and has provided a comfort letter in respect of the relevance of the project to the development of the sector;

22.6. that, if the project application cannot be supported in the amount of the requested funding, the Agency shall offer to implement the project with reduced funding from the Recovery Fund. If the project applicant fails to confirm its readiness to become engaged in the project with reduced funding from the Recovery Fund within five working days from the notification of the decision, it shall lose the right to qualify for participation in the respective project application selection;

22.7. that, if the project applicant refuses to implement the project with reduced funding from the Recovery Fund in accordance with Sub-paragraph 22.6 of this Regulation, the remaining funding shall be granted to support the project application with the next highest evaluation according to the quality criteria in accordance with Sub-paragraph 22.4 of this Regulation.

23. When evaluating project applications, at least one project application that has received the highest number of points shall be initially approved in each area of smart specialisation. If a larger number of projects are submitted in any area of smart specialisation, after the approval of the first project in the area of smart specialisation it shall be possible to approve another project in the area of smart specialisation that has obtained the highest number of points. If there is remaining undivided funding from the Recovery Fund after the project selection, the project with the highest number of points shall be approved for the remaining funding, irrespective of the area of smart specialisation.

24. The Agency shall, on the basis of the opinion provided by the project application evaluation commission, take the decision on approval, conditional approval, or rejection of the project application.

25. The Agency shall take the decision on the approval of the project application if:

25.1. the project application conforms to the criteria for the evaluation of project applications;

25.2. when ranking the project applications in the order referred to in Sub-paragraph 22.4 of this Regulation, funding is available for the project implementation within the framework of the selection.

26. The Agency shall take the decision on the approval of the project application conditionally if the project application has deficiencies that the project applicant should rectify for the project application to fully conform to the criteria for the evaluation of project applications and for the proper project implementation. If the respective conditions are complied with within the deadline and in accordance with the procedures laid down in the decision, the Agency shall provide an opinion on the fulfilment of the conditions specified in the decision and include in the opinion on the fulfilment of the conditions also information on the need to commence the contract process. The deadline for providing the opinion may be extended by not more than one month. If the respective conditions are not complied with within the deadline and in accordance with the procedures laid down in the decision, the Agency shall cancel the decision taken and reject the project application.

27. The Agency shall take the decision on the rejection of the project application if at least one of the following conditions is present:

27.1. the project application does not conform to any of the non-specified evaluation criteria or does not receive the minimum required number of points specified in the quality criteria contained in Annex 3 to this Regulation;

27.2. the funding is not available for the project implementation within the framework of the project application selection;

27.3. the project applicant does not conform to the conditions for granting the aid for commercial activity referred to in Paragraph 31 of this Regulation;

27.4. the project applicant refuses to implement the project with reduced funding.

28. After taking the decision on the approval, conditional approval, or rejection of the project application, the Agency shall notify the project applicant in writing of the decision taken.

29. The contract process shall be commenced not later than within 30 working days after the opinion on the fulfilment of the conditions contained in the decision or taking of the decision on approval of the project application.

30. If the funding referred to in Paragraph 5 of this Regulation is not allocated within the framework of the open project application selection referred to in Paragraph 17 of this Regulation, the sectoral ministry shall, within the framework of this Investment, upon evaluating the remaining funding, propose organising a new open project application selection in accordance with the procedures laid down in Paragraph 18 of this Regulation.

III. Requirements for the Project Applicant and the Cooperation Partner

31. The project applicant shall conform to the following conditions within the framework of the Investment:

31.1. it is a legal person registered in the Commercial Register of the Republic of Latvia, or an association registered in the Register of Associations and Foundations;

31.2. its shareholders or members include at least one sectoral association or at least five mutually unrelated entrepreneurs of the sector or recognised agricultural service cooperative societies whose total turnover in the last closed reporting year amounts to at least EUR 150 million, or the project applicant submits a comfort letter in respect of the relevance of the project to the development of the sector from a sectoral association which unites performers of economic activity in the sector whose total turnover in the last closed reporting year amounts to at least EUR 150 million. When determining the total turnover in the last closed reporting year, it shall not include the turnover of research and knowledge-dissemination organisations and local governments;

31.3. its shareholders or members include at least one sectoral association or at least five mutually unrelated entrepreneurs of the sector or recognised agricultural service cooperative societies whose total amount of export in the last closed reporting year amounts to at least EUR 75 million, or the project applicant submits a comfort letter in respect of the relevance of the project to the development of the sector from a sectoral association which unites performers of economic activity in the sector whose total amount of export in the last closed reporting year amounts to at least EUR 75 million. When determining the total amount of export in the last closed reporting year, it shall not include the export indicators of research and knowledge-dissemination organisations and local governments;

31.4. more than 51 per cent of its equity capital or right to vote are owned by entrepreneurs of the sector or recognised agricultural service cooperative societies, or associations and members thereof which unite entrepreneurs of the sector or recognised agricultural service cooperative societies;

31.5. according to the latest available information in the database of the State Revenue Service, the project applicant does not have any debt of taxes administered by the State Revenue Service, including debts of mandatory State social insurance contributions the total amount of which exceeds EUR 150, except for tax payments for which, on the day of submission of the project, the payment term has been extended, divided in instalments, deferred, or divided in instalments repeatedly in accordance with Section 24, Paragraphs one, 1.³, and 1.⁷ of the law On Taxes and Fees, or in respect of which a settlement agreement is in force on the specified day of submission of the project in accordance with Section 41 of the law On Taxes and Fees;

31.6. it conforms to the conditions for the aid for commercial activity and the conditions for de minimis aid in accordance with Commission Regulation (EU) 2023/2831 of 13 December 2023 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid (Official Journal of the European Union, 13.12.2023, L 2023/2831) (hereinafter - Commission Regulation No 2023/2831);

31.7. no signs are established indicating a conflict of interest, corruption, fraud, or a situation of double funding.

[2 April 2024]

32. The Agency shall ensure at the time of the approval of the project application that the project applicant conforms to the conditions for the aid for commercial activity.

33. The Agency shall reject the project application or amendments to the contract for the project implementation if any of the following exclusion criteria are applicable to the project applicant or cooperation partner:

33.1. the project applicant, the cooperation partner, or a person who is a member of the executive board or commission, or a general representative of the project applicant, or a person who is authorised to represent the project applicant in activities related to the branch, has been found guilty of any of the following criminal offences by such public prosecutor's penal order or court judgement that has entered into effect and has become non-appealable:

33.1.1. formation, directing, or involvement in a criminal organisation or an organised group contained therein, or any another criminal formation, or participation in the criminal offences committed by such an organisation;

33.1.2. acceptance of a bribe, giving of a bribe, misappropriation of a bribe, intermediation in bribery, unauthorised acceptance of benefits, or commercial bribery, unlawful requesting, acceptance, or giving of benefits, trading with influence;

33.1.3. fraud, fraud in an automated data processing system, insurance fraud, misappropriation, or laundering of the proceeds from crime;

33.1.4. evasion of tax payments and payments equivalent thereto;

33.1.5. terrorism, financing of terrorism, formation or organisation of a terrorist group, travelling for terrorism purposes, justification of terrorism, incitement to terrorism, threats of terrorism, or recruitment, training of a person, and training for terrorism;

33.1.6. trafficking in human beings;

33.1.7. movement of such goods and substances the circulation of which is prohibited or specially regulated across the State border of the Republic of Latvia;

33.1.8. unlawful participation in property transactions;

33.2. it has been found guilty by the decision on punishment by a competent authority in the relevant sector or a court judgement that has entered into effect and has become non-appealable, and has been punished for a violation manifested as employment of one or more persons who do not hold the necessary work permits or who are not entitled to stay in a European Union Member State, or for employing a person without a written employment contract;

33.3. it has been found guilty by a decision of a competent authority in the relevant sector or a court judgement which has entered into effect and has become non-appealable, of a violation of competition law manifested as a vertical agreement aimed at restricting the ability of a purchaser to determine the resale price, or horizontal cartel agreement, except for the case where the relevant authority, upon establishing the violation of competition law, has released the project applicant from the fine or reduced the fine for its cooperation under the leniency programme;

33.4. its insolvency proceedings have been declared, a case of legal protection proceedings has been initiated, or legal protection proceedings are being implemented, its economic activity has been suspended or discontinued, or it is being liquidated;

33.5. it has been found guilty by a decision of a competent authority in the relevant sector or a court judgement that has entered into effect and has become non-appealable, and has been punished for the violation manifested as failure to submit an informative declaration on employees which is to be submitted, within the term specified in laws and regulations, in respect of the persons who commence work;

33.6. it corresponds to the characteristics specified in Section 11.², Paragraph one of the Law on International Sanctions and National Sanctions of the Republic of Latvia;

33.7. it is subject to the recovery order referred to in Article 1(4)(a) of Commission Regulation No 651/2014.

34. In order to ensure that the Investment corresponds to the "do no significant harm" principle in accordance with Article 2(6) of Regulation 2021/241, the funding from the Recovery Fund shall not be granted for the following activities within the framework of the Investment:

34.1. activities related to fossil fuel, including its derived use, except for the projects in the production of electricity or heat, and also related transmission and distribution infrastructure using natural gas in conformity with the conditions laid down in Annex III to the Commission Notice Technical guidance on the application of "do no significant harm" under the Recovery and Resilience Facility Regulation (Official Journal of the European Union, 18.2.2021, C 58/1);

34.2. [2 April 2024];

34.3. activities related to landfills of waste, waste incineration facilities (except for the activities intended only for non-recyclable hazardous waste treatment facilities and activities intended for the existing facilities to increase energy efficiency, capture exhaust gases for storage or use, or recover materials from ash resulting from the operation of incineration facilities, provided that such activities, under this Investment, do not increase the waste processing capacity of the facilities or extend the service life of the facilities, for which evidence is provided at the level of the facilities at the end of the research project), and mechanical-biological treatment facilities (except for the activities intended for the existing facilities to increase energy efficiency or modernise separate waste processing operations, converting waste into compost biowaste, and performing anaerobic digestion of biowaste, provided that such activities do not increase the waste processing capacity of the facilities or extend the service life of the facilities, for which evidence is provided at the level of the facilities at the end of the research project);

34.4. activities related to long-term disposal of waste that may cause harm to the environment;

34.5. activities detrimental to the good condition or ecological potential of water bodies, including surface water, groundwater, or the good environmental condition of maritime waters;

34.6. activities detrimental to the circular economy, including the waste prevention and recycling, causing a significant lack of effectiveness in the use of materials or in such direct or indirect use of natural resources as non-renewable energy resources, raw materials, water and land in one or more stages of the product cycle, including in terms of product durability, repairability, upgradeability, reusability, or recyclability;

34.7. activities detrimental to the prevention and control of environmental pollution;

34.8. activities detrimental to the protection and restoration of biological diversity and ecosystems if the respective activity causes harm to the good condition and resilience of ecosystems, or causes harm to the conservation status of habitats and species, including habitats and species of European Union importance;

34.9. the activities within the framework of the European Union Emissions Trading System which achieve the projected level of greenhouse gas emissions which is not lower than the relevant benchmarks.

[2 April 2024]

35. The beneficiary has the right to involve cooperation partners in the project implementation. The cooperation partner must conform to the requirements referred to in Paragraph 103 of this Regulation.

36. After the submission of the project application, the project applicant shall organise an open project application selection to involve cooperation partners, publishing information on the announcement, extension, suspension, or termination of the research project application selection in the official gazette Latvijas Vēstnesis and on the website of the project applicant, including a link to the criteria for the evaluation of the research projects. The project applicant shall set a deadline for the submission of research project applications that is not shorter than one month.

37. Along with the submission of research projects, the cooperation partner may submit the beneficiary an initial digital maturity assessment prepared by the European Digital Innovation Hub and also a digital development roadmap which ensures priority in receiving aid.

38. The cooperation partner shall participate in the implementation of the research project with the property, intellectual property owned or held by it, funding, or human resources. As a result of such contributions, no legal relationship can arise between the beneficiary and the cooperation partner that would indicate that this transaction corresponds to the characteristics of a public procurement contract in accordance with the Public Procurement Law or the Law on the Procurements of Public Service Providers, or that the transaction is subject to the laws and regulations regarding the procurement procedure and the procedures for the application thereof to the projects financed by the contracting authority.

39. The private co-funding required for the implementation of the research project cannot be provided in kind.

40. After signing the contract for the project implementation, the beneficiary shall use the data input forms available in the Management Information System for data exchange in accordance with the type of document to be submitted.

41. The cooperation partner may involve in the implementation of the research project other entrepreneurs or research and knowledge-dissemination organisations that participate in the implementation of the research project with scientists, or outsourcing service providers, i.e. research and knowledge-dissemination organisations or other legal persons employing scientists. In such case, the research project application shall indicate from where the scientists will be involved.

42. For the cooperation partner to receive funding, it must submit a description of the research project to the beneficiary. When submitting the research project application, the cooperation partner shall submit a declaration of conformity with the condition of Article 2(18)(c) of Commission Regulation No 651/2014. The research project shall be evaluated in accordance with the criteria for the evaluation of the research project developed by the beneficiary. The criteria for the selection of the research projects shall determine that a higher evaluation in points shall be given to the research project application that has received the Seal of Excellence within the Horizon Europe, the European Union's research and innovation programme.

43. The maximum permissible total funding from the Recovery Fund per one cooperation partner and such a group of related persons of cooperation partners as defined in Annex I to Commission Regulation No 651/2014, in the implementation of research projects shall be not more than EUR 1 000 000.

IV. Aided Activities

44. The following activities shall be considered to be aided activities within the framework of this Investment and the funding from the Recovery Fund shall be granted to the following activities:

44.1. activities performed by cooperation partners within the framework of the research project in order to develop new or improve the existing products, services, and technologies in the fields of smart specialisation, including the introduction of digitisation, automation, robotisation, and work control solutions in production and service development processes, and also for support of the introduction of personalised e-commerce solutions conforming to the following conditions:

44.1.1. industrial research evaluated by the research project evaluation commission in accordance with Article 2(85) of Commission Regulation No 651/2014 in respect of which the decision on conformity with the conditions for the aid for commercial activity has been received from the Agency;

44.1.2. experimental development evaluated by the research project evaluation commission in accordance with Article 2(86) of Commission Regulation No 651/2014 in respect of which the decision on conformity with the conditions for the aid for commercial activity has been received from the Agency;

44.1.3. feasibility study for research projects whose total value exceeds EUR 250 000 evaluated by the research project evaluation commission in accordance with Article 2(87) of Commission Regulation No 651/2014 in respect of which the decision on conformity with the conditions for the aid for commercial activity has been received from the Agency;

44.2. coordination of research projects organised by the beneficiary, including promotion of cooperation, sharing of information and knowledge, and also covering project management costs. The Agency shall provide the funding within the framework of the Investment for the activities referred to in this Sub-paragraph in accordance with Commission Regulation No 2023/2831.

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45. Aid for commercial activity shall be provided for such research project activities that have been commenced after submission of the research project application in the Management Information System. In the case of combining the aid referred to in Paragraphs 132 and 133 of this Regulation, the research project may be commenced if the project application has been submitted for all the planned aid programmes. If the research project has been commenced but the project application has not been submitted for any of the aid programmes, aid shall not be provided for the research project.

46. The following activities shall not be considered to be aided activities within the framework of this Investment and the funding from the Recovery Fund shall not be granted for the following activities:

46.1. development of software and information system to be used for commercial activity if known methods or existing software tools are used therein;

46.2. aid for the existing software and information systems;

46.3. conversion and translation of computer languages;

46.4. supplementation of the existing programs with a new functionality for users;

46.5. for debugging of the existing systems;

46.6. purchase of equipment for the European Union Emissions Trading System;

46.7. preparation of the existing software;

46.8. preparation of the user documentation;

46.9. development of websites;

46.10. development of web application programs;

46.11. development of program platforms that cannot be separated from pre-developed software;

46.12. activities that have been commenced before the submission of the project application or the list of research projects in the Management Information System.

47. The activities referred to in Paragraph 46 of this Regulation (except for Sub-paragraph 46.12) shall be recognised as eligible for aid within the framework of the research project if one of the following conditions is present:

47.1. activities are related to the respective research project and are performed in cooperation with research and knowledge-dissemination organisations or by purchasing outsourced services from research and knowledge-dissemination organisations;

47.2. post-doctoral graduates and doctoral students are employed within the framework of the research project;

47.3. research results are published in scientific journals, scientific conferences are organised, or there is engagement in scientific research.

48. Aid shall not be granted to the project applicant for the sectors and activities specified in Article 1(1) of Commission Regulation No 2023/2831.

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49. Aid to the cooperation parter shall not be granted for the following sectors and activities:

49.1. sectors and activities not to be aided that are specified in Article 1(2)(c) and (d) of Commission Regulation No 651/2014;

49.2. sectors and activities not to be aided that are specified in Article 1(3) of Commission Regulation No 651/2014.

50. Aid to the project applicant and cooperation partner shall not granted for the following sectors and activities:

50.1. trade in weapons and ammunition (Nomenclature of Economic Activities in the European Communities Revision 2 (hereinafter - NACE Rev. 2), Class 47.78 "Other retail sale of new goods in specialised stores");

50.2. gambling and betting activities (Division 92 "Gambling and betting activities" of NACE Rev. 2);

50.3. manufacture and sale of tobacco products (Division 12 "Manufacture of tobacco products", Class 46.35 "Wholesale of tobacco products" and Class 47.26 "Retail sale of tobacco products in specialised stores" of NACE Rev. 2);

50.4. sale of alcohol (Class 46.34 "Wholesale of beverages" and Class 47.25 "Retail sale of beverages in specialised stores" of NACE Rev. 2);

50.5. activities with real estate (Section L "Real estate activities", Class 68.1 "Buying and selling of own real estate" and Class 68.31 "Real estate agencies" of NACE Rev. 2);

50.6. collection, treatment, and disposal of waste, processing of materials (Class 38.21 "Treatment and disposal of non-hazardous waste" and Class 38.22 "Treatment and disposal of hazardous waste" of NACE Rev. 2).

51. Aid for commercial activity may only be granted if the activities and financial flows in the sectors to be aided are clearly separated, ensuring that activities in the sectors not to be aided do not benefit from the aid granted within the framework of the activity in the following cases:

51.1. if the project applicant operates in any of the sectors not to be aided in accordance with Paragraph 48 of this Regulation in conformity with the conditions laid down in Article 1(2) of Commission Regulation No 2023/2831, and Paragraph 50 of this Regulation;

51.2. if the cooperation partner operates in any of the sectors not to be aided in accordance with Paragraph 49 of this Regulation in conformity with the conditions laid down in the last paragraph of Article 1(3) of Commission Regulation No 651/2014, and Paragraph 50 of this Regulation.

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V. Eligible Costs and Costs Not Covered from the Funds of the Recovery Fund

52. Within the framework of the Investment, the following costs shall be eligible, provided they are measurable, proportionate, reasonable, and conform to the principles of sound financial management in accordance with the conditions laid down in Article 33 of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012 (hereinafter - Regulation 2018/1046):

52.1. costs of the cooperation partner in respect of the specific research project:

52.1.1. remuneration within the meaning of Section 59 of the Labour Law for the performance of the tasks referred to in Paragraph 83 of this Regulation. Consideration for the performance of work shall be determined by taking into account the volume and specific nature of the work and the direct personnel costs of the involved specialists in accordance with Article 25(3)(a) of Commission Regulation No 651/2014;

52.1.2. mandatory State social insurance contributions related to the remuneration in accordance with Article 25(3)(a) of Commission Regulation No 651/2014;

52.1.3. costs of an official travel (work trip) in accordance with the laws and regulations regarding the procedures for reimbursing the expenses related to official travels in accordance with Article 25(3)(a) of Commission Regulation No 651/2014;

52.1.4. costs of public utility services and communication services, insofar as they are used for research or feasibility study activities in accordance with Article 25(3)(e) of Commission Regulation No 651/2014;

52.1.5. lease payment for premises in accordance with Article 25(3)(c) of Commission Regulation No 651/2014 and lease payment for instruments, facilities, and equipment thereof, insofar as they are used for research or feasibility study activities in accordance with Article 25(3)(b) of Commission Regulation No 651/2014, not exceeding the market price. The eligible monthly lease payment for instruments, facilities, and equipment thereof shall be aligned to depreciation costs, as they would be if the instruments, facilities, and equipment thereof were owned by the cooperation partner. The same method for the calculation of depreciation shall be applied to the costs as to fixed assets owned by the lessee. Cooperation partners shall submit the relevant documents confirming the market value of the leased instruments, facilities and equipment thereof;

52.1.6. planned costs of the acquisition of physical, biological, chemical, and other materials, and also trial animals, reagents, chemicals, wares for laboratory, medicinal products, scientific literature, and low-value inventory, including delivery costs thereof, insofar as they are used for research or feasibility study activities in accordance with Article 25(3)(b) of Commission Regulation No 651/2014;

52.1.7. costs of contractual research and patents, insofar as they are related to the implementation of a specific research project in accordance with Article 25(3)(d) of Commission Regulation No 651/2014;

52.1.8. costs of instruments, facilities, and equipment thereof owned by the cooperation partner, depreciation costs of facilities acquired through financial leasing, insofar as they are used in the research project in accordance with Article 25(3)(b) of Commission Regulation No 651/2014, and depreciation costs of patents and licenses, insofar as they are used in the research project in accordance with Article 25(3)(d) of Commission Regulation No 651/2014, and depreciation costs of buildings owned by the cooperation partner, and costs of commercial transfer of land or actual capital costs in accordance with Article 25(3)(c) of Commission Regulation No 651/2014. Costs of buildings may be eligible for a specific part. The same method for the calculation of depreciation shall be applied to the depreciation of facilities as to fixed assets owned by the lessee. Depreciation costs of facilities acquired through financial leasing may not exceed the amount of the lease payment made for the acquisition of fixed asset. Depreciation costs of premises, instruments, facilities and equipment thereof, patents, and licenses shall not be covered if the aid for commercial activity has already been received from the State, local government, the European Union, or other public funds for the acquisition or creation thereof within the framework of this or another aid activity or project. Depreciation costs of patents and licenses may only be eligible if they have been acquired after submission of the research project application in the Management Information System. If the time during which premises, instruments, facilities, patents, and licenses are used for research does not cover the entire useful life of the respective premises, instruments, facilities, patents, and licenses, only such depreciation costs that correspond to the duration of the research project shall be considered eligible costs;

52.1.9. insurance costs, i.e. health, life, vehicle, property, facilities, civil liability insurance, and other insurance costs, for the time of the implementation of the research project, without creation of reserves and inclusion thereof in the contract, in accordance with Article 25(3)(e) of Commission Regulation No 651/2014. If the research project does not include the entire term of validity of the relevant insurance, such part of the insurance costs shall be included in the eligible costs which corresponds to the duration of the research project;

52.1.10. costs of external services, i.e. legal, accounting, testing and development, project management, record-keeping, and translation services purchased by the cooperation partner from third parties if the relevant services are only used for research or feasibility study activities in accordance with Article 25(3)(e) of Commission Regulation No 651/2014;

52.1.11. data acquisition costs in accordance with Article 25(3)(d) of Commission Regulation No 651/2014 and subscription costs in accordance with Article 25(3)(e) of Commission Regulation No 651/2014, insofar as they are related to research or feasibility study activities;

52.2. eligible costs of the project for the beneficiary. Funding for the activities referred to in this Sub-paragraph shall be provided in accordance with Commission Regulation No 2023/2831:

52.2.1. costs of the performance of the tasks referred to in Paragraph 82 of this Regulation in accordance with the laws and regulations regarding the procedures for reimbursing the expenses related to official travels (the beneficiary's participation fee for the involvement in international research and development programmes, platforms, and initiatives, participation fee for networking and mobility events, costs of the preparation of international projects for the involvement in international consortia (for example, Horizon Europe projects), and other costs that ensure cooperation and involvement in international research projects);

52.2.2. project management costs, i.e. consideration costs of the project management personnel for planning, coordination, and control of the activities to be performed within the framework of the project, including also costs for ensuring the project documentation in accordance with the requirements laid down in the legal acts of the European Union and national level, costs of organisation and control of project procurements;

52.2.3. purchase of outsourced services, i.e. project management, legal, accounting, record-keeping, independent auditor, internal auditor, and translation services required for the provision of activity;

52.2.4. communication costs related to publicity measures within the framework of a strategically important project in accordance with Sub-paragraph 82.1.3 of this Regulation.

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53. The costs referred to in Sub-paragraph 52.1.3 of this Regulation shall not exceed 10 per cent of the total amount of the eligible costs of the research project.

54. The costs referred to in Sub-paragraph 52.2 of this Regulation shall not exceed 10 per cent of the total funding granted for the project from the Recovery Fund.

55. The costs referred to in Paragraph 52 of this Regulation shall be eligible, provided that they have incurred starting from the day when the project application is submitted in the Management Information System. If the start of works of the project is the moment in accordance with Article 2(23) of Commission Regulation No 651/2014 and it has occurred before submission of the project application in the Management Information System, all the costs incurred during the project shall not be eligible.

56. Unforeseen expenses shall be considered additional expenses or price increase that has occurred during the project implementation, and the beneficiary and cooperation partner shall cover them using funds free of aid for commercial activity.

57. The costs referred to in Sub-paragraph 52.1 of this Regulation shall be eligible within the framework of the research project, provided that they have incurred after submission of the research project application in the Management Information System. The incentive effect requirements referred to in Article 6(2) of Commission Regulation No 651/2014 shall be ensured within the framework of the project. Additional costs that are not covered from the funds of the Recovery Fund shall be indicated as part of private co-funding, and the Agency shall not verify them.

58. Facilities that will be transferred for financial leasing and in respect of which depreciation costs are calculated in accordance with Sub-paragraph 52.1.8 of this Regulation shall remain in the ownership of the cooperation partner after expiry of the lease contract.

59. The cost price of the services provided by the cooperation partner shall be calculated in accordance with the conditions of the Law on Annual Statements and Consolidated Annual Statements.

60. The entrepreneur and research and knowledge-dissemination organisations, if they become involved in the project as cooperation partners, shall be compensated for costs in accordance with the conditions for eligible costs laid down in this Regulation, and they shall ensure separate accounting records of revenues and expenses from economic transactions related to the project implementation, and also separation of activities and financial flows related to the implementation thereof.

61. When purchasing services from public research and knowledge-dissemination organisations, the cooperation partner has the obligation to obtain a declaration from the service provider that the public research and knowledge-dissemination organisation has incorporated principles for determining the value, i.e. market price, of scientific services into its accounting policy.

62. Eligibility conditions for the costs referred to in Sub-paragraph 52.1.1 of this Regulation shall be as follows:

62.1. if a scientific worker involved in the implementation of research or feasibility study receives consideration within the framework of the research project upon entering into an employment contract, working time recording tables shall indicate how many hours are dedicated to work in the research project (indicating separately the workload for industrial research, experimental development, and feasibility study) and how many hours are dedicated to work not related to the research project;

62.2. if the scientific worker works on the research project and performs other functions for which he or she receives a consideration under another employment or work-performance contract, the work on the research project shall not be carried out during the time when the person performs tasks not related to the research project under the contract entered into. If the work within the framework of the research project is performed during hours of the main job, the workload of the main job shall be reduced by the corresponding number of hours;

62.3. the cooperation partner shall ascertain that the tasks to be performed that are specified in the main job or other contracts do not overlap with the tasks to be performed in the research project.

63. The following costs shall not be financed from the funds of the Recovery Fund within the framework of the Investment:

63.1. costs not related to the research or feasibility study specified within the framework of the research project;

63.2. costs related to the preparation of the project application, including consultancy services;

63.3. value added tax, customs duties, fees and penalty payments which the beneficiary and cooperation partner cover from private co-funding, ensuring separate accounting and separation of project costs (including value added tax costs) for all the costs referred to in this Sub-paragraph;

63.4. payment for the examination, arrangement, and reservation of a loan or leasing, interest payments, contractual penalty, late payment interest, fee for financial transactions, and commission;

63.5. costs related to the amounts of export of an entrepreneur or recognised agricultural service cooperative society, i.e. formation and operation of a distribution network for goods, and also the current expenses of export operations of the entrepreneur or recognised agricultural service cooperative society;

63.6. costs related to the construction design, reconstruction, construction, and adaptation of premises;

63.7. any other costs not specified as eligible in Paragraph 52 of this Regulation.

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64. The beneficiary has the right, within the framework of the Investment, to invite an independent auditor or auditor to confirm the achievement of the objectives referred to in the interim or final report of the research project and the justification of costs.

65. The eligible costs of the beneficiary shall include costs only for those activities of the research project that will be completed on the day of submission of the final report of the project. The eligible costs in the interim and final reports shall include the actual expenses incurred in accordance with the project application.

66. Green public procurements and socially responsible public procurements shall be eligible within the framework of the investment in accordance with the laws and regulations in the field of public procurements.

67. Participation fee in international initiatives shall only be eligible if the participation of the beneficiary in them will help to achieve the defined results, objectives, or promote involvement in new international projects, or if new performance indicators are established for the beneficiary in relation to the participation in the respective international initiatives.

68. The maximum permissible funding intensity in accordance with Article 25(5)(b), (c) and (d), 6(a) and (7) of Commission Regulation No 651/2014 (as a percentage of the total eligible costs of the research project) shall be as follows:

68.1. for industrial research:

68.1.1. 70 per cent - for micro and small entrepreneurs;

68.1.2. 60 per cent - for medium-sized entrepreneurs;

68.1.3. 50 per cent - for large entrepreneurs;

68.2. for experimental development:

68.2.1. 45 per cent - for micro and small entrepreneurs;

68.2.2. 35 per cent - for medium-sized entrepreneurs;

68.2.3. 25 per cent - for large entrepreneurs;

68.3. for feasibility study:

68.3.1. 70 per cent - for micro and small entrepreneurs;

68.3.2. 60 per cent - for medium-sized entrepreneurs;

68.3.3. 50 per cent - for large entrepreneurs.

69. The maximum permissible funding intensity for the activities referred to in Sub-paragraph 44.2 of this Regulation shall be 100 per cent.

70. The funding intensity referred to in Sub-paragraph 68.1.1 of this Regulation may be increased by 10 per cent, but by 15 per cent for the intensity referred to in Sub-paragraphs 68.1.2, 68.1.3, and 68.2 of this Regulation in accordance with Article 25(6)(b) of Commission Regulation No 651/2014 if the cooperation partner has envisaged it initially in the research project application and any of the following conditions has been fulfilled:

70.1. there is effective cooperation within the framework of the research project, within the meaning of Article 2(90) of Commission Regulation No 651/2014, with at least one micro, small, or medium-sized entrepreneur, and one entrepreneur does not cover more than 70 per cent of the total eligible costs;

70.2. there is effective cooperation within the framework of the research project, within the meaning of Article 2(90) of Commission Regulation No 651/2014, with at least one research and knowledge-dissemination organisation, and the research and knowledge-dissemination organisation covers at least 10 per cent of the total eligible costs, and it has the right to publish results of its research project;

70.3. the results of the research project have been accepted for publication in at least two scientific articles indexed in the Web of Science, SCOPUS, ERIH (A or B), ScienceDirect, or Elsevier databases, or have been disseminated at a technical or scientific conference whose collection of articles are indexed in the Web of Science, SCOPUS, ERIH (A or B), DBLP, ScienceDirect, or Elsevier databases, and the author of the publication is a researcher of the entrepreneur or a recognised agricultural service cooperative society, or the publication is a co-publication of researchers of the entrepreneur or recognised agricultural service cooperative society and the research and knowledge-dissemination organisation.

71. Funding for additional intensity in the cases referred to in Paragraph 70 of this Regulation shall be paid after one of the following conditions has been fulfilled:

71.1. the publication or conference materials include information on the methods employed or results of research projects. If possible, a reference is provided to a website where all the results of the research projects are posted, including those results that will be achieved or clarified after the publication is made;

71.2. if multiple related research projects are carried out, the funding intensity shall be increased for those research projects that are included in the publication or conference materials referred to in Sub-paragraph 70.3 of this Regulation;

71.3. the results of the research project have been accepted for publication in such editions that will be indexed in the Web of Science, SCOPUS, ERIH (A or B), ScienceDirect, or Elsevier databases, or have been disseminated at a technical or scientific conference whose collection of articles are indexed in the Web of Science, SCOPUS, ERIH (A or B), DBLP, ScienceDirect, or Elsevier databases.

72. In the cases referred to in Paragraphs 70 and 71 of this Regulation, the total funding intensity for industrial research and experimental development shall not exceed 80 per cent.

73. The project applicant shall envisage in the project application that at least 25 per cent of the total eligible costs will be used for experimental development.

74. The cooperation partner shall ensure and the beneficiary shall ascertain that the costs of the co-funded goods and services correspond to the market prices and there is no conflict of interest in the selection of the supplier or service provider. When implementing the research project and the project, the cooperation partner or beneficiary shall select the supplier of goods or service provider in accordance with the laws and regulations regarding procurement procedure and procedures for the application thereof for projects funded by the contracting authority, or the laws and regulations in the field of public procurements, implementing an open, transparent, non-discriminatory, and competitive procedure.

75. Costs of individual activities included in the research project shall be eligible following the principles of economy, efficiency, and effectiveness within the meaning of Article 33 of Regulation No 2018/1046, if the activity has been fully completed in accordance with the research project application and the terms of the contract entered into. Costs may only be eligible and included in the progress report in respect of those interim stages that have been completed at the time of the interruption of the research project.

VI. Conditions for the Implementation of the Project and Receipt of the Funding

76. The sectoral ministry has the following obligations:

76.1. to participate in the meetings of the research project evaluation commission, ensuring and supervising that the decisions of the research project evaluation commission are taken in conformity with the requirements for the prevention of a conflict of interest in accordance with Article 61 of Regulation 2018/1046;

76.2. to provide opinions on the correspondence of research projects to the areas of the long-term strategy for smart specialisation;

76.3. to monitor the achievement of indicators specified within the framework of the project, including the fulfilment of research project indicators and the achievement of the beneficiary's indicators;

76.4. to verify whether no research or experimental development is implemented that essentially duplicate activities, results, and target markets of results, and verify whether any signs can be established in the implementation of the research project within the framework of the funding from the Recovery Fund that indicate to a situation of double funding in respect of the European Union's Cohesion Policy Programme for 2021-2027 and the Operational Programme "Growth and Employment" of the European Union Structural Funds and the Cohesion Fund for the 2014-2020 Programming Period (including to verify demarcation also among other sources of public funding), and also the European Union's Technical Support Instrument programme;

76.5. to analyse the long-term impact of this Regulation on the national economy of Latvia within the framework of monitoring;

76.6. to develop the methodology for applying the criteria for the evaluation of research projects which is used by the beneficiary to prepare the criteria for the evaluation of research projects, and publish it on its website not later than one month after coming into force of this Regulation;

76.7. to conduct an analysis of the fields of smart specialisation and prepare monitoring reports;

76.8. to ensure supervision of the Investment and national indicators;

76.9. to organise regular meetings to identify problems and seek possible solutions;

76.10. to use the following documents in order to prepare a semi-annual progress report on the implementation of the Recovery Fund plan:

76.10.1. a list of cooperation partners, indicating the name and registration number of the cooperation partner, the name of the research project, and a brief description of the research project;

76.10.2. a copy of the contract confirming the approved funding from the Recovery Fund for research projects, using the information available in the Management Information System that is provided by the beneficiary;

76.11. to examine the submission of the cooperation partner referred to in Paragraph 84 of this Regulation and to provide an opinion on the conformity of the research project with the criteria for the evaluation of the research project within one calendar month after receipt of the submission;

76.12. to ensure that data related to the record-keeping of the indicators referred to in Paragraphs 7 and 8 of this Regulation are entered into the Management Information System in a timely manner, but not less than once every six months, taking into account the following:

76.12.1. information on the funding granted from the Recovery Fund that has been entered into by the beneficiary in accordance with Sub-paragraph 82.2.7 of this Regulation;

76.12.2. information that has been entered into by the beneficiary in accordance with Sub-paragraph 82.2.8 of this Regulation;

76.13. to develop the methodology for applying the criteria for the evaluation of project applications by the commencement of drafting the project application selection regulations;

76.14. to ascertain that research projects are implemented in accordance with Annex 1 to this Regulation.

77. In addition to the obligations referred to in Paragraphs 2 and 9 of Cabinet Regulation No 621 of 7 September 2021, Procedures for the Implementation and Supervision of the Plan for the European Recovery and Resilience Facility, the Agency has the following obligations:

77.1. to ascertain that there is no conflict of interest, corruption, fraud, and double funding and take the decision on the conformity of the project with the conditions for the aid for commercial activity in the following cases:

77.1.1. after receipt of the project application in the Management Information System, insofar as it is provided for by the criteria for the evaluation of project applications referred to in Annex 3 to this Regulation;

77.1.2. prior to approving such amendments to the contract for the project implementation that provide for the addition of cooperation partners, before approval of progress reports, and in the case where changes are to be made in the composition of the research project evaluation commission;

77.2. to verify the documentation supporting the objectives and supervision indicators, including a data reliability check;

77.3. to evaluate the research project in accordance with the procedures laid down in Paragraph 103 of this Regulation and include the evaluated research projects in the beneficiary's project through amendments to the contract for the project implementation;

77.4. to examine and agree on the internal control system of the beneficiary;

77.5. to ascertain that the beneficiary in accordance with Sub-paragraph 20.5 of this Regulation and the cooperation partner in accordance with Sub-paragraph 83.10 of this Regulation have submitted a declaration of conformity with the principle "do no significant harm";

77.6. to provide an opinion in accordance with Sub-paragraph 82.2.22 of this Regulation.

78. The Agency has the following rights:

78.1. to involve the sectoral ministry at the stage of project supervision and the stage of evaluation of progress reports of research projects if it is necessary to confirm or agree on the achievable indicators;

78.2. to invite experts to verify whether research costs are reasonable and economically justified.

79. If the Agency establishes failure to conform to the conditions referred to in Sub-paragraph 77.1 of this Regulation, it shall not include the research project in the contract for the project implementation entered into, and send the research project to the beneficiary for the rectification of violations established by the Agency and for the re-evaluation of the research project. Amendments shall not be made to the contract for the project implementation until the violations established by the Agency are rectified and the research project is re-evaluated.

80. The contract for the project implementation shall include at least the following information:

80.1. the beneficiary's details;

80.2. the beneficiary's rights and obligations, including in respect of the supervision of cooperation partners and their implemented research projects;

80.3. the procedures for submitting a schedule for the submission of planned progress reports, the procedures for submitting the procurement plan, the procedures for submitting interim reports and final report;

80.4. the planning of the funding related to the implementation of the project;

80.5. the period for the retention of documents related to the project implementation;

80.6. the duration of the contract for the project implementation, the procedures for amending and terminating it;

80.7. the dispute settlement procedures that shall include the condition that disputes arising during the project implementation after signing the contract for the project implementation shall be resolved in civil proceedings, stipulating additionally that the beneficiary shall first submit a claim to the Agency, and if the dispute cannot be resolved through negotiation, the beneficiary may bring an action against the Agency before a court of general jurisdiction;

80.8. the regularity of and responsibility for the entry of data in the Management Information System;

80.9. the procedures in the case of force majeure or exceptional circumstances;

80.10. the condition that activities in conflict with the "do no significant harm" principle shall not be supported.

81. Costs can be eligible within the framework of the Investment until 31 December 2027. If the beneficiary and cooperation partners incur costs after 31 December 2027, they shall be covered from their own resources.

82. The beneficiary has the following obligations and rights:

82.1. obligations related to the project management and implementation:

82.1.1. to manage the beneficiary's project and ensure the achievement of the objectives set therein, including coordinate implementation of all research projects included in the beneficiary's project;

82.1.2. to document, prepare, and store all documentation related to the evaluation of research projects, including to document the work of the research project evaluation commission;

82.1.3. to implement the approved project as a strategically important project, posting up-to-date information on the project implementation on its website at least every six months and ensuring information and publicity measures in accordance with Article 34 of Regulation 2021/241 and Article 10 of the Recovery and Resilience Facility Financing Agreement between the Commission and the Republic of Latvia, ensuring at least one informative measure (conference, seminar, or other types of informative measures);

82.1.4. to submit a communication plan to the sectoral ministry within one calendar month after signing the contract for the project implementation;

82.1.5. to supervise that the specified indicators of interim and final results are fulfilled in the research projects in accordance with Annex 1 to this Regulation;

82.1.6. to ensure that the indicators specified within the framework of the project are achieved by 30 June 2026;

82.1.7. if necessary, prior to submitting the final report of the research project to the Agency, to involve external experts in order to ascertain that the investments made have been useful and justified in achieving the results of the research project;

82.1.8. to ascertain that there is no conflict of interest, fraud, or corruption risk, or double funding during the evaluation and approval processes of research projects, carrying out the necessary activities to eliminate them, ensuring objectivity and equal treatment for all cooperation partners;

82.1.9. to adhere to the principles of the prevention of a conflict of interest in accordance with Article 61 of Regulation 2018/1046 and also to the principles of transparency and equality, and prevent corruption, fraud, and double funding, taking appropriate corrective measures, if necessary;

82.1.10. to provide proposals for improving the long-term strategy for smart specialisation and clarifying the activity plan;

82.1.11. to submit a summary of results of the research project to the Agency after completion of the research project;

82.1.12. to evaluate the sustainability of the project, the co-funding required for the project implementation, the sufficiency of collateral, the current and future financial situation, the conformity of knowledge and experience to successful implementation of the activities envisaged in the project, and also the possibility of introducing eco-innovative products, services, and technologies;

82.1.13. to submit a final payment request for the remaining amount in the Management Information System if the indicators specified within the framework of the project are achieved;

82.1.14. to ensure within the framework of the project that the principle of gender equality and equal opportunities is adhered to during the evaluation process of research projects, and also the "do no significant harm" principle is adhered to;

82.1.15. to repay to the Agency the funding from the Recovery Fund not invested;

82.2. obligations related to the selection of research projects:

82.2.1. to ascertain that the expenses of the cooperation partner's research project are necessary for the achievement of the research results and that this connection is clearly understandable and provable with documents supporting expenses, the expenses are commensurate, and the principles of economy, efficiency, and effectiveness are followed in respect of them;

82.2.2. to document, prepare, and store all documentation related to the evaluation of research projects, including to document the work of the research project evaluation commission;

82.2.3. to submit progress reports to the Agency in accordance with Paragraph 89 of this Regulation, including only such expenses of the cooperation partner's research project that have actually been incurred in the research project and that have been evaluated by the beneficiary and the research project evaluation commission;

82.2.4. after submission of the cooperation partner's research project application, to establish a research project evaluation commission, selecting the participants referred to in Paragraph 107 of this Regulation in an open call or conducting market research if procurement is performed and a work-performance contract is entered into, and to ascertain that there is no conflict of interest, corruption, or fraud;

82.2.5. to ensure that research projects are evaluated according to the developed criteria for the evaluation of research projects that have been agreed with the sectoral ministry prior to entering into the contract for the project implementation and making amendments to the contract for the project implementation;

82.2.6. within 15 working days from the day of holding the meeting of the research project evaluation commission, to inform cooperation partners in writing of the supported or rejected research project, providing an explanation of the reasons for rejection and submission of claims;

82.2.7. to submit a copy of the contract for the project implementation entered into between the beneficiary and the cooperation partner in the Management Information System, together with amendments to the contract for the project implementation;

82.2.8. to provide a list of cooperation partners to the sectoral ministry upon request, indicating the name and registration number of the cooperation partner, the name of the research project, a brief description of the research project, and the amount of the funding;

82.2.9. to verify and prevent any conflict of interest, corruption, and fraud in the evaluation of research projects. For the entire duration of the project implementation, to ensure documentation of verifications and to ensure that members of the research project evaluation commission, experts, and the beneficiary's employees sign a declaration of objectivity, confidentiality, and absence of a conflict of interest included in Annex 4 to this Regulation before a meeting of the research project evaluation commission and evaluation of interim and final deliverables, eliminating or correcting the identified risks or established conflict of interest, if necessary;

82.2.10. to verify whether there is no double funding prior to approving the research project, and if the research project is approved, for the entire duration of the implementation thereof, ensuring documentation of verifications;

82.2.11. to verify the documentation supporting the indicators to be achieved that are specified in the project, including check the reliability of data, prior to submission thereof to the sectoral ministry and the Agency;

82.2.12. to enter into the contract for the project implementation with the cooperation partner, including stipulating the procedures by which the cooperation partner shall ensure repayment of the funding granted from the Recovery Fund for the implementation of the research project in the case of violations;

82.2.13. once information on the time of the announcement of procurement becomes known, to submit a procurement plan in the Management Information System for all planned procurements for the implementation of the Investment, the organisation of which is subject to the Public Procurement Law, the Law on the Procurements of Public Service Providers, or the laws and regulations regarding the procurement procedure and the procedures for the application thereof for projects financed by the contracting authority;

82.2.14. to collect and, upon request of the Agency, to submit to the Agency the data on the rejected research projects and the reasons for rejection thereof;

82.2.15. within one month after signing the contract for the project implementation, but not later than by the submission of the first progress report, to submit to the Agency a description of the internal control system for the prevention of the risks of corruption and a conflict of interest, including the following therein:

82.2.15.1. a description of how measures will be taken to control the risk of a conflict of interest in accordance with Article 61 of Regulation 2018/1046;

82.2.15.2. a description of measures for the risk control of a prohibited agreement;

82.2.15.3. description of measures for the prevention of fraud and corruption risks;

82.2.15.4. a description of the procedure for the prevention and identification of a situation of double funding in respect of other financial instruments;

82.2.15.5. a description of the circulation of the internal information and communication measures regarding prevention of the risks of a conflict of interest, fraud, and corruption;

82.2.15.6. a code of ethics;

82.2.15.7. a reporting mechanism for the competent authorities on potential administrative or criminal offences;

82.2.15.8. procedures by which employees should act if they wish to report potential violations;

82.2.16. to develop the criteria for the evaluation of research projects;

82.2.17. to register all received research project applications and to inform the applicant in writing by sending an electronic confirmation of the receipt of the research project application;

82.2.18. to conduct a pre-evaluation of the conditions for the aid for commercial activity in accordance with the requirements referred to in Paragraph 103 of this Regulation;

82.2.19. to submit the documentation supporting the pre-evaluation upon request of the Agency;

82.2.20. to collect and to list data to determine the progress of the achievement of project indicators;

82.2.21. to submit information on the conducted pre-evaluation of research projects to the research project evaluation commission for the performance of the tasks referred to in Paragraph 110 of this Regulation;

82.2.22. to submit the list of research projects and the planned composition of the research project evaluation commission to the Agency for the verification of data in order to ensure the establishment of the research project evaluation commission referred to in Sub-paragraph 82.2.4 of this Regulation;

82.3. rights:

82.3.1. to access the original documents that justify the costs related to the implementation of the research projects and visit the place of the implementation of the research project in order to ascertain the conformity of the research project submitted by the cooperation partner;

82.3.2. to receive interim and final payments in accordance with Paragraph 88 of this Regulation;

82.3.3. to organise several calls for the involvement of cooperation partners, establishing a separate research project evaluation commission for each open call in accordance with Sub-paragraph 82.2.4 of this Regulation.

83. The cooperation partner has the following obligations:

83.1. to submit the research project application and a description of the research project to the beneficiary in accordance with Annex 1 to this Regulation, and also an estimate and a time schedule for activities;

83.2. if the cooperation partner, who has submitted the research project application to the beneficiary, cannot prove that it is capable of performing research and development work on its own (for example, it does not have a research and development department, all employees are already occupied, it does not have the appropriate scientific infrastructure, high-level engineers, or industry specialists who are capable of conducting scientific research at a level required for the needs of the sector, or it lacks a strong knowledge base in production or provision of services), it has the obligation to ensure cooperation with a research and knowledge-dissemination organisation or another entrepreneur that employs scientists (post-doctoral graduates) working in the relevant scientific area and whose economic activity is related to the provision of such services;

83.3. to ensure that there is no conflict of interest, corruption, or fraud throughout the entire implementation of the research project and also to prevent double funding;

83.4. to implement the approved research project in respect of which the decision to grant the aid for commercial activity has been received from the Agency;

83.5. to submit to the beneficiary all necessary documentation for the submission of interim and final reports to the Agency, including in order to prove that the expenses of the research project are necessary for achieving the results of the research project, and this connection is clearly understandable and provable, and the research expenses have incurred in conformity with the principles of economy, efficiency, and effectiveness;

83.6. to ensure that the authorities administering the investments of the Recovery Fund and the institutions referred to in the Recovery and Resilience Facility Financing Agreement between the Commission and the Republic of Latvia have access to the original documents of the beneficiary and its cooperation partners and, if necessary, to the place of the implementation of the research project;

83.7. at least every six months, to publish up-to-date information on the progress of the implementation of the research project on its website and, if possible, on the beneficiary's website, ensuring information and publicity measures in accordance with Article 34 of Regulation 2021/241 and Article 10 of the Recovery and Resilience Facility Financing Agreement between the Commission and the Republic of Latvia;

83.8. prior to examining the research projects, to sign the declaration of objectivity, confidentiality, and absence of a conflict of interest included in Annex 4 to this Regulation;

83.9. before submitting the research project application, a prepared initial digital maturity assessment and a digital development roadmap may be attached thereto. The existence of a roadmap shall ensure priority in receiving support. After the research project implementation, the cooperation partner may submit a second digital maturity assessment;

83.10. to submit a declaration to the beneficiary that the activities envisaged within the framework of the research project are not aimed at the activities referred to in Paragraph 34 of this Regulation.

84. The cooperation partner has the right to submit to the beneficiary a written submission for the review of the evaluation of the research project within one calendar month after receipt of the evaluation of the research project. If the beneficiary does not examine the submission of the cooperation partner or if the cooperation partner disagrees with the response provided by the beneficiary, the cooperation partner may submit a written submission to the sectoral ministry within one calendar month from the day the response of the beneficiary is received. The sectoral ministry shall examine the submission in accordance with Sub-paragraph 76.11 of this Regulation.

85. After approval of the project application, the sectoral ministry or the Agency may request to supplement the internal control system referred to in Sub-paragraph 82.2.15 of this Regulation if it is established that additions or clarifications are required.

86. The beneficiary may organise the first meeting of the research project evaluation commission after the day the project application is submitted in the Management Information System and after the initial open call of the cooperation partner.

87. The Agency shall, for the purpose of providing aid, and the Agency and the sectoral ministry shall, for the purpose of ensuring supervision within the framework of this Regulation, request and receive information from the Punishment Register of the Ministry of the Interior. In order to ensure access to the data, the Agency or the sectoral ministry shall, if necessary, enter into an agreement with the manager of the Punishment Register of the Ministry of the Interior.

88. The beneficiary shall ensure the project implementation and pre-finance the planned costs of the project from its own funds. During the project implementation, the beneficiary may request an interim payment for completed activities. The final payment may be requested when the total interim payments reach 90 per cent of the funding available for the project.

89. The beneficiary shall, within 10 working days after signing the contract for the project implementation, submit to the Agency the schedule for the submission of planned progress reports, divided according to the indicators specified within the framework of the project.

90. The beneficiary shall prepare a progress report every three months and submit it to the Agency for examination. After examination of the progress report, the Agency shall make a payment to the beneficiary for achieving the indicators specified within the framework of the project.

91. During the project implementation, the beneficiary may receive a faster payment of up to 75 per cent of the payment request submitted to the Agency without the Treasury or bank guarantee, before the Agency has completed the examination of the corresponding progress report. The Agency shall determine the amount of the faster payment by evaluating the project risk, including taking into account the statistics on what part of the beneficiary's progress reports submitted previously was recognised as conforming after the examinations conducted by the Agency and the payment was made correspondingly.

92. If the period for the introduction of the research project exceeds six months, it shall be divided into stages, and results to be achieved shall be determined for each stage, and evaluated by the research project evaluation commission. Stages shall be determined for each research project individually.

93. In order to achieve the overall indicators planned within the framework of the project and fully invest the funding, the beneficiary may organise several open research project application selections.

94. The beneficiary may not earn beneficial interest from the funding received within the framework of the project. If beneficial interest is generated, the beneficiary shall repay it to the Agency, and the sectoral ministry shall decide on the reallocation of the funding in accordance with Paragraph 105 of this Regulation.

95. The beneficiary shall involve a manager of scientific direction in the evaluation of the interim and final results of the research projects in order to provide a scientific evaluation of the progress of the implementation of the research project.

96. The beneficiary shall send to the Agency a copy of the description of the research project and a signed copy of the minutes of the research project evaluation commission, together with the request for amendments to the contract for the project implementation, not later than within 30 working days after signing the minutes of the research project evaluation commission that include a list of the supported research projects, together with the research project applications and supporting documents, and the opinion on the research project provided by the representative of the sectoral ministry in the research project evaluation commission.

97. After receipt of the research project applications from the cooperation partners, the beneficiary shall evaluate the cost estimate of the received research projects and the justification and relevance of the costs thereof to the respective research project and submit the research project applications to the research project evaluation commission. The research project evaluation commission shall evaluate the conformity of the submitted research project application of the cooperation partner to the requirements of this Regulation and also evaluate the form of the description of the research project. The beneficiary shall evaluate the declaration regarding the conformity of the commercial company to the small (micro), medium-sized, or large commercial company.

98. The cooperation partner shall assume the risk of covering all incurred costs from its own funds if the Agency takes the decision not to grant the aid for commercial activity or establishes non-conformity in the process of the research project evaluation.

99. Premature termination of the research project shall be supported if it is established during the progress of the implementation of the research project that it will not be possible to achieve the objectives identified within the research project. The beneficiary shall evaluate the results and costs of the research project and conformity thereof with the objective and planned activities of the research project, and report this to the research project evaluation commission. The beneficiary shall submit a copy of the evaluation regarding the terminated research project to the Agency within five working days after receipt of the evaluation from the research project evaluation commission.

100. The beneficiary shall, at least once every six months, post on its website or, if there is no such website, on the website of the sectoral association the up-to-date information on the progress of the implementation of the research project included in the beneficiary's project and information on the made research project calls and results. The cooperation partner shall, at least once every six months, post on its website, if any, the up-to-date information on the progress of the implementation of the research project.

101. The sectoral ministry shall, within 30 days after signing the contract for the project implementation, post on its website the beneficiary's contact information and specify the beneficiary's research directions.

102. The Agency has the right to unilaterally withdraw from the contract for the project implementation in any of the following cases:

102.1. the beneficiary does not fulfil the conditions of the contract for the project implementation, including failure to conform to the deadlines specified in the project or other circumstances have occurred which negatively affect or may affect the investments or achievement of the specified indicators;

102.2. the beneficiary has intentionally provided false information to the Agency during the project implementation;

102.3. it is provided for in the contract for the project implementation.

103. After the beneficiary has submitted the compiled list of the aided research projects in the Management Information System for the Agency to grant the aid for commercial activity to the cooperation partner, the Agency shall evaluate the following for each research project:

103.1. risks of a conflict of interest, corruption, and fraud, and the absence of double funding, and verify the conformity of the cooperation partner with the conditions for the aid for commercial activity;

103.2. whether, at the time of taking the decision to grant the aid, according to the latest available information in the database of the State Revenue Service, the cooperation partner does not have any debt of taxes administered by the State Revenue Service, including debts of the mandatory State social insurance contributions the total amount of which exceeds EUR 150, except for tax payments for which the payment term has been extended, divided in instalments, deferred, or divided in instalments repeatedly in accordance with Section 24, Paragraphs one, 1.³, and 1.⁷ of the law On Taxes and Fees, or in respect of which a settlement agreement has been entered into in accordance with Section 41 of the law On Taxes and Fees;

103.3. the conformity of the cooperation partner to the exclusion criteria referred to in Paragraph 33 of this Regulation;

103.4. at the time of granting the aid for commercial activity:

103.4.1. the conformity of the cooperation partner with the status of an entrepreneur in difficulty in accordance with the definition of Article 2(18) of Commission Regulation No 651/2014;

103.4.2. the conformity of the cooperation partner which is a commercial company to the small (micro), medium-sized, or large commercial company.

104. The beneficiary shall give priority funding to such cooperation partners whose research projects have been approved in the "GovTech" programme of the "Digital Europe" programme, ensuring the absence of double funding.

105. The sectoral ministry shall prepare a report on the implementation of the Investment for examination by the Cabinet that includes information on further supervision of the Investment after 31 August 2026, including the use of funding, providing proposals for reallocation of the funding to the aid measures of the sectoral ministry during the programming period of the European Union's Cohesion Policy Programme for 2021-2027.

106. If the indicators referred to in Paragraph 7 of this Regulation have been achieved within the framework of the Investment, but the funding allocated to the Investment has not been fully invested by 31 December 2027, the sectoral ministry shall include information on the use of funding not invested in the report referred to in Paragraph 105 of this Regulation.

VII. Research Project Evaluation Commission

107. In the research project evaluation commission, the beneficiary:

107.1. shall include the following participants:

107.1.1. at least one representative of the entrepreneur of the sector or of the recognised agricultural service cooperative society who has obtained higher education in the relevant sector or has higher education and at least five years of work experience in the relevant sector;

107.1.2. a representative of the sectoral ministry;

107.2. may include the following participants:

107.2.1. representatives of research and knowledge-dissemination organisations who have obtained a master's or doctoral degree in the relevant sector;

107.2.2. representatives of other sectoral competence centres, cooperation networks, associations, or other organisations;

107.2.3. managers of scientific direction.

108. The beneficiary shall involve the participants referred to in Paragraph 107 of this Regulation by evaluating the absence of a conflict of interest in the research project evaluation commission.

109. International or local experts shall be involved in the evaluation of research projects upon proposal of the sectoral ministry. The beneficiary shall decide on the involvement of an expert in the evaluation of the research project. The expert evaluation shall be added to the evaluations conducted by the research project evaluation commission, the beneficiary shall submit the evaluations of the research project to the Agency, and the Agency shall take the decision on granting the aid for commercial activity.

110. The research project evaluation commission has the following tasks:

110.1. to ascertain that the research project application indicates and analyses the relevance and justification of the planned or already made investments, and also the commercialisation potential;

110.2. to ascertain that the research project application indicates the conformity of the research project with the project activity plan, taking into account the directions and objectives specified in the long-term strategy for smart specialisation;

110.3. to evaluate the research project application and the interim and final reports, voting on approval or rejection thereof;

110.4. to supervise that the performance indicators specified in the research project are achieved;

110.5. to ascertain that the beneficiary has conducted a proper pre-evaluation ensuring that there is no conflict of interest, fraud, or corruption risk, or double funding during the evaluation and approval processes of research projects, carrying out the necessary activities to eliminate and rectify them, and ensuring objectivity and equal treatment for all cooperation partners;

110.6. to ensure the documentation of the evaluation of research projects and transparency of the evaluation process;

110.7. to ensure that the principle of gender equality and equal opportunities is adhered to during the evaluation process of research projects;

110.8. to ensure adherence to the "do no significant harm" principle in the approval of research projects, so that the included activity has an insignificant impact or no foreseeable impact on all environmental objectives, evaluating both direct and primary indirect effects throughout the lifecycle in accordance with Article 2(6) of Regulation 2021/241;

110.9. based on the cost evaluation conducted by the beneficiary, to ensure that the expenses of the cooperation partner's research project are necessary for the achievement of the research results;

110.10. to complete an individual evaluation of the conformity of the research project with the specified criteria before the meeting of the research project evaluation commission and evaluation of interim and final deliverables by signing the declaration of objectivity, confidentiality, and absence of a conflict of interest included in Annex 4 to this Regulation. The declaration shall be provided by all participants with the right to vote who participate in the operation of the research project evaluation commission;

110.11. to provide proposals for improving the long-term strategy for smart specialisation and clarifying the action plan;

110.12. to recommend the beneficiary the involvement of an external expert in the evaluation of research projects and final reports, if necessary.

111. When participating in the operation of the research project evaluation commission, the representative of the sectoral ministry shall ascertain that:

111.1. decisions are taken at meetings of the research project evaluation commission, adhering to the principles of the prevention of a conflict of interest, transparency, and equality, and also eliminating and correcting the risks of double funding, fraud, and corruption;

111.2. no potential cases of a conflict of interest, fraud, corruption, or double funding were identified during the meeting, and the funding for research projects is planned for the implementation of the specified objectives and activities, and shall confirm conformity with the conditions referred to in this Sub-paragraph by signing the minutes of the meeting of the research project evaluation commission;

111.3. the research project indicates and analyses the relevance and justification of the planned or already made investments, and also the commercialisation potential;

111.4. the conformity of the research project to the project activity plan developed by the beneficiary has been indicated;

111.5. the cooperation partner does not conduct or has not conducted the same research project within the framework of this Investment or other programmes for the aid for commercial activity within the framework of the measures financed by the European Union Structural Funds and the Cohesion Fund for the 2014-2020 Programming Period, the Recovery Fund, or the European Union's Cohesion Policy Programme for 2021-2027 in order to ensure that all research projects supported by the beneficiary do not overlap;

111.6. the cooperation partners demonstrate an understanding of and vision for the potential application of knowledge and impact thereof, and the demonstrated scope, impact, and benefits exceed the expected costs of the research project;

111.7. the research project indicates the interim stages of the research project, after completion of which the usefulness of continuing the research project is reassessed;

111.8. the research project provides for and allows to verify the real financial participation of the cooperation partner in the amount that corresponds to the funding intensity for the research project;

111.9. the cooperation partner and the beneficiary have evaluated, if envisaged, the interim results of the research project, and the evaluations regarding the continuation or termination of the research project are documented and supported by facts;

111.10. the expenses included in the interim progress reports within the framework of the research project are related to the achievement of the project results, and this connection is clearly understandable and justified by the cooperation partner, adhering to the principles of economy, efficiency, and effectiveness.

112. The representative of the sectoral ministry has the right to vote in the research project evaluation commission and he or she shall vote on the interim evaluation of the research project but shall not evaluate the scientific section of the research project and shall not complete the individual sheet for the evaluation of the research project.

113. The entrepreneur of the sector or representatives of recognised agricultural service cooperative societies, the representative of the research and knowledge-dissemination organisation, and the representative of the sectoral ministry have the right to vote at the research project evaluation commission. Proposals of other members of the research project evaluation commission shall be of recommendatory nature.

114. If the representative of the sectoral ministry, establishes, within the framework of the evaluation process conducted by the research project evaluation commission, that the evaluation process of the research project application, interim or final report is not sufficiently justified, and the research project evaluation commission rejects the involvement of an independent expert, the representative of the sectoral ministry shall not sign the minutes, and the list of the supported research projects shall not be directed to the Agency.

115. The entrepreneur of the sector, the manager of scientific direction, the representative of the research and knowledge-dissemination organisation, or the representative of the recognised agricultural service cooperative society may not participate in the research project evaluation commission if a research project has been submitted from the same department of the institution they represent. A member of the research project evaluation commission may not participate in the evaluation of a research project submitted by another member of the commission.

116. The beneficiary shall evaluate the need to grant the right to vote to other members of the research project evaluation commission referred to in Sub-paragraph 107.2.2 of this Regulation, in addition to that specified in Paragraph 113 of this Regulation.

VIII. Procedures for Establishing and Rectifying Violations

117. If the beneficiary or the Agency establishes that a member of the research project evaluation commission is in a conflict of interest, or the principles of objectivity, transparency, or equality are not adhered to, or if fraud or corruption is established, or there is a risk of such violations, the beneficiary shall exclude this member from the composition of the research project evaluation commission and, if necessary, replace him or her with another member to ensure a quorum.

118. It shall be considered that a member of the research project evaluation commission is in a conflict of interest or the principles of objectivity, transparency, or equality are not adhered to if at least one of the following conditions is present:

118.1. a research project of the entrepreneur or institution represented by the member, or a research project planned with the participation of the relevant member or the entrepreneur or institution represented by the member has been submitted;

118.2. a member of the research project evaluation commission evaluates the research project of another member of the research project evaluation commission;

118.3. the member of the research project evaluation commission is a representative of the holder of capital shares of the beneficiary that evaluates a research project of another holder of capital shares of the beneficiary;

118.4. other objectively justified conditions that are attributable in accordance with Article 61 of Regulation 2018/1046.

119. If the Agency establishes a conflict of interest during the initial examination of the progress report, it may conduct a repeated examination of the available documents of the beneficiary, and if the Agency establishes that a conflict of interest has occurred, it shall make a financial correction by requiring the beneficiary to repay the funding of the Recovery Fund for the specific research project.

120. A conflict of interest with the holders of capital shares or members of the beneficiary shall not be established in the following cases:

120.1. the research project is submitted by the holder of capital shares of the beneficiary, including a research and knowledge-dissemination organisation, that controls not more than 15 per cent of the beneficiary's capital shares;

120.2. the research project is submitted by the holder of capital shares of the beneficiary that is the sectoral association;

120.3. one representative of the holder of capital shares, including a research and knowledge-dissemination organisation, that holds not more than 15 per cent of the beneficiary's capital shares or right to vote, evaluates a research project submitted by another holder of capital shares.

121. A representative of the research and knowledge-dissemination organisation may be involved in the research project evaluation commission and evaluate a research project submitted by another department of the institution he or she represents, ensuring that there is no conflict of interest. In this case, procedures shall be developed in the research and knowledge-dissemination organisation to ensure the separation of interests and competences of units.

122. In case of establishing any risks related to the funding not invested or the planned activities not implemented in the achievement of project results, the research project evaluation commission shall evaluate the need and recommend to beneficiaries the involvement of external experts in order to evaluate the results of research projects prior to making the final payment in research projects and to ascertain that the investments made have been useful and justified. A copy of the expert evaluation shall also be sent to the Agency. If the expert evaluation is negative or contains recommendations, the opinion prepared by the experts shall be sent to the cooperation partner. The cooperation partner shall prepare and submit to the beneficiary an explanation about the non-conformity issues indicated in the opinion within five working days after receipt of the written request from the beneficiary. If the explanation is not received within five working days or if the repeated expert evaluation is negative after becoming acquainted with the explanation, the Agency shall request the beneficiary to repay the total amount of the public funding invested in the research project.

123. The availability of information and the document storage shall be ensured in accordance with the following procedures:

123.1. the beneficiary shall ensure the availability of information and the document storage for 10 years, starting from the day the last aid for commercial activity was granted to the cooperation partner;

123.2. the cooperation partner shall ensure the availability of information and the document storage for 10 years, starting from the moment the aid for commercial activity is granted;

123.3. the Agency shall ensure the availability of information and the document storage for 10 years, starting from the day the last aid for commercial activity is granted according to the programme for the aid for commercial activity;

123.4. the sectoral ministry shall ensure the availability of information and the document storage for 10 years, starting from the day the last aid for commercial activity is granted according to the programme for the aid for commercial activity.

[2 April 2024]

IX. Conditions Related to Receipt of Aid for Commercial Activity

124. The date when the Agency has taken the decision to grant the aid for commercial activity to the beneficiary and the date when the Agency has taken the decision to grant the aid for commercial activity to the cooperation partner shall be considered the date of granting the aid for commercial activity.

125. The decisions of the Agency on granting the aid for commercial activity:

125.1. to the beneficiary may be taken by the deadline specified in Article 7(3) of Commission Regulation No 2023/2831;

125.2. to the cooperation partner may be taken by the deadline specified in Article 58(4) of Commission Regulation No 651/2014.

[2 April 2024]

126. The Agency shall approve the maximum possible amount of the aid for commercial activity for the approved research projects.

127. The project applicant and the beneficiary (in the case of amendments to the contract for the project implementation) may contest the decision of the Agency on the conditions for the aid for commercial activity to the Ministry of Finance, and the decision taken by the Ministry of Finance may be appealed to the District Administrative Court.

128. The cooperation partner may, in respect of the decision taken by the beneficiary on the approval or rejection of the research project, turn to the sectoral ministry with a request to review the justification of the points received in the evaluation within one month from the day of entry into force of the decision.

129. The Agency shall ensure the publicity measures specified in Article 9(1)(c) and (4) of Commission Regulation No 651/2014 in accordance with the law or regulation regarding the procedures for the publication of information on the provided aid for commercial activity and for granting and cancelling the right to use the electronic system.

130. If the research project is implemented in accordance with Sub-paragraph 70.1 of this Regulation, appropriate intensity shall be applied to the costs incurred by each cooperation partner, taking into account the conformity of the partner to the micro, small, medium-sized, or large entrepreneur.

131. If the cooperation partner indicates in the research project application that it is planned to conduct effective cooperation within the framework of the research project, indicating a research and knowledge-dissemination organisation as a partner, to receive the funding for additional intensity in accordance with Sub-paragraphs 70.1 and 70.2 of this Regulation, then the beneficiary shall not include a representative of the research and knowledge-dissemination organisation in the composition of the commission referred to in Paragraph 107 of this Regulation in order to prevent the risk of a conflict of interest.

132. The aid for commercial activity provided within the framework of the Investment in accordance with Article 25 of Commission Regulation No 651/2014 may be combined with the aid provided under another programme for the aid for commercial activity or individual aid project for different determined eligible costs or the same eligible costs in accordance with Article 8 of Commission Regulation No 651/2014, this also includes combining with de minimis aid provided under another programme for the aid for commercial activity or individual aid project, without exceeding the maximum permissible aid funding intensity in accordance with Article 25(5)(b), (c), and (d), (6)(a), and (7) of Commission Regulation No 651/2014. The project may be commenced after the project application is submitted in the Management Information System.

133. Within the framework of this Regulation, beneficiaries may combine the received de minimis aid with other de minimis aid in accordance with Article 5 of Commission Regulation No 2023/2831, including for the same eligible costs, provided that after combining the aids, the maximum aid intensity for an aid unit or cost item does not exceed 100 per cent, and also the maximum amount of de minimis aid specified in Article 3(2) of Commission Regulation No 2023/2831 is not exceeded.

[2 April 2024]

134. The beneficiary shall, within the framework of Paragraphs 132 and 133 of this Regulation, submit to the sectoral ministry and the Agency all information, including on the planned and granted aid for commercial activity, including for the same eligible costs, indicating the date of granting the aid, the aid grantor, the aid measure, and the planned or granted amount of aid and intensity of aid if it is planned to combine several aids prior to the incorporation of costs.

135. Prior to providing the aid for commercial activity in accordance with Commission Regulation No 2023/2831, the Agency shall ascertain that the total amount of de minimis aid for the beneficiary over the last three years, counting from the day of granting de minimis aid, together with the planned de minimis aid, does not exceed the de minimis aid ceiling specified in Article 3(2) of the respective Regulation. The funding limit for one beneficiary shall be assessed at the level of one single entrepreneur in accordance with Article 2(2) of Commission Regulation No 2023/2831. In providing aid to the cooperation partner, the restrictions specified in Article 1(2)(c) and (d), Article 4(a) and Article 4(1)(i) of Commission Regulation No 651/2014 shall be complied with.

[2 April 2024]

136. The sectoral ministry shall compile and publish on its website the information on the freely available funding from the Recovery Fund.

137. The beneficiary and cooperation partners may not, within the framework of the project, use research equipment procured within the framework of other projects not related to the economic activity, except for the cases where the beneficiary or cooperation partner conducts research projects not related to the economic activity. Research projects not related to the economic activity shall be such projects in which effective cooperation shall be ensured and intellectual property rights arising from the activity carried out by the research and knowledge-dissemination organisation within the framework of the project shall be fully granted to the research and knowledge-dissemination organisation.

138. If the conditions of Commission Regulation No 2023/2831 are violated, the beneficiary has the obligation to repay to the Agency the unlawful de minimis aid received within the framework of the project, together with interest using funds free of aid for commercial activity, in accordance with the conditions of Chapter IV or V of the Law on Control of Aid for Commercial Activity.

[2 April 2024]

139. If the conditions of Commission Regulation No 651/2014 are violated in respect of the aid granted to the cooperation partner, the beneficiary has the obligation to repay to the Agency the unlawful aid for commercial activity received within the framework of the project, together with interest using funds free of aid for commercial activity, in accordance with the conditions of Chapter IV or V of the Law on Control of Aid for Commercial Activity. The beneficiary has the right to receive compensation from the cooperation partner in the amount of the repaid unlawful aid for commercial activity (together with interest).

Prime Minister E. Siliņa

Minister for Economics V. Valainis

 

Annex 1
Cabinet Regulation No. 34
9 January 2024

Description of the Research Project

1. Name of the research project (assigned by the beneficiary)

2. Name of the research project

3. Classification of the research project (mark the appropriate type of research)
Sectoral research	Interdisciplinary research	International research

4. Information on the implementer of the research project (if the research is implemented in cooperation, provide information on each cooperation partner)
Name	Registration number	Principal activity code of NACE Rev. 2	Status of the enterprise (micro, small, medium-sized, large entrepreneur)

5. Brief description of the research project (provide a brief summary, indicating the objective, main activities, and planned result that would be possible to publish)

6. Period of the implementation of the research project
Start date of the research project	End date of the research project

7. Place of the implementation of the research project
Address
CATTU code (in accordance with the Classifier of Administrative Territories and Territorial Units used by the Central Statistical Bureau that is available at http://www.csb.gov.lv/node/29893/list)

8. Costs and intensity of the research project (if there are several cooperation partners, indicate separately each implementer of the research project)
Total eligible costs of the research project, EUR	including co-funding from the Recovery and Resilience Facility, EUR	Funding intensity, %	Type of aid
			grant

9. Full description of the research project (indicate justification of the need to implement the research project, the planned activities by separate types of the research project, a description of the commercialisation potential, an explanation that the knowledge to be gained and envisaged in the research project is not available elsewhere or is protected, thus the acquisition of such knowledge increases the amount of knowledge of the industry)

10. Detailed costs and intensity of the research project (indicate detailed costs of the research project or attach a detailed estimate of the research project as an annex)

11. Combination of activities and costs planned within the framework of the research project (if applicable1)

12. Result of the research project (if the research project lasts for more than six months, the interim results to be achieved which will be supervised by the research project evaluation commission shall be specified, indicating a reference to the performance of the indicators specified in Cabinet Regulation No. 34 of 9 January 2024, Regulations Regarding the Implementation of Investment 2.2.1.3.i "Aid for the Introduction of New Products and Services into Entrepreneurship" of Reform and Investment Direction 2.2 "Digital Transformation and Innovations of Enterprises" of the Plan of Recovery and Resilience Facility of Latvia)
1st interim result
2nd interim result
..
Final result

13. Type of the research project (if the research project consists of several different stages, information shall be provided for each stage separately)
Industrial research, experimental development, or feasibility study (complete the appropriate columns; if not applicable to the research, indicate "n/a")	Industrial research	Experimental development	Feasibility study
Technology Readiness Level (TRL) at the start of the research project (according to the international standard ISO 16290:2013)
Technology Readiness Level (TRL) level at the end of the research project
Classification of the knowledge areas of the research project according to the OECD FOS classification
Is effective cooperation planned within the framework of the research project?
Is publication of research results planned within the framework of the research project?

14. Capacity of the implementer of the research project to perform research and development work on its own
The implementer of the research project shall indicate what percentage of the research project is planned to be carried out on its own (%)
If the implementer of the research project is not able or does not plan to perform research and development work on its own, indicate:
- whether cooperation with a research and knowledge-dissemination organisation will be ensured?
- whether cooperation with another entrepreneur which employs scientists (post-doctoral graduates) working in the relevant scientific area will be ensured?

Annexes.

1.

2.

..

Declaration

I,		,
	(given name, surname)
working for the research project applicant
	(name of the research project applicant)
as a responsible official		,
	(name of the position)

hereby declare that at the time of submitting the research project application:

1) the research project applicant does not comply with the provisions referred to in Article 2(18) of Commission Regulation (EU) No 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty;

2) the research project applicant has sufficient and stable financial resources at its disposal (not applicable to State budget institutions);

3) the information provided in the research project application and annexes thereto is true, and the funding requested from the Recovery and Resilience Facility of Latvia (hereinafter - the Recovery Fund) for the implementation of the research project will be used according to the research project application;

4) there are no known reasons why this research project could not be implemented or implementation thereof could be delayed, and I confirm that the commitments specified in the research project can be fulfilled within the deadlines stipulated in the laws and regulations regarding the implementation of the relevant objective of the Recovery Fund or measure thereof;

5) the activities included in the research project are not implemented in other projects co-funded by the Recovery Fund or European Union funds.

I acknowledge that the research project may not be approved for co-funding from the Recovery Fund if the research project application and description of the research project are not fully and qualitatively completed, and also if the funding from the Recovery Fund (for the current year/planning period) planned in the laws and regulations regarding the implementation of the relevant objective of the Recovery Fund or measure thereof is used at the time of the approval of the research project.

I acknowledge that in the case of providing false information in the declaration, sanctions of administrative nature may be initiated against both myself and the respective legal person, i.e. the research project applicant.

I acknowledge that in the case of an increase in costs of the research project, the research project applicant shall cover all costs that may arise as a result of cost fluctuations.

I declare that the enterprise does not conform to the criteria specified in Section 57 of the Insolvency Law to be subject to insolvency proceedings upon request of creditors.

I declare that I have become acquainted with the conditions of the relevant objective of the Recovery Fund or measure thereof, and the requirements laid down in the selection regulations.

I declare that the copies attached to the research project application correspond to the original documents at my disposal, and the copies and electronic version of the research project application correspond to the original submitted research project application.

I acknowledge that the research project should be implemented in accordance with the activities provided for in the research project application, and the results should be maintained in accordance with the research project application.

Signature2:
Date:
	(dd/mm/yyyy)

Notes.

¹ The cooperation partner shall indicate that the activities included in the research project are not implemented within the framework of the European Union's Cohesion Policy Programme for 2021-2027, the Operational Programme "Growth and Employment" of the European Union Structural Funds and the Cohesion Fund for the 2014-2020 Programming Period, the European Union's Technical Support Instrument programme, and other programmes financed by the European Union or other public funding sources, including co-funding from the State budget or local governments. It shall also provide information on whether it is planned to combine costs in the research project.

² If the research project application has been prepared electronically and signed with a secure electronic signature, the signature section need not be completed.

 

Annex 2
Cabinet Regulation No. 34
9 January 2024

Project Activity Plan

For submission within the framework of Cabinet Regulation No. 34 of 9 January 2024, Regulations Regarding the Implementation of Investment 2.2.1.3.i "Aid for the Introduction of New Products and Services into Entrepreneurship" of Reform and Investment Direction 2.2 "Digital Transformation and Innovations of Enterprises" of the Plan for Recovery and Resilience Facility of Latvia (hereinafter - the Cabinet Regulation).

Objectives of the planned activity (the beneficiary shall indicate its objectives and indicators to be achieved, including also linkage to the long-term strategy for smart specialisation. It shall describe how it will help to achieve the objectives and reference points of the long-term strategy for smart specialisation).

Description of the planned activity (the beneficiary shall briefly describe its planned activity, identifying the research directions towards which the research activity is directed, and the cooperation activities according to the research directions. If necessary, the research directions can also be detailed more within the framework of objectives of the long-term strategy for smart specialisation. It shall describe how it will fulfil the tasks included in the activity plan of the long-term strategy for smart specialisation).

The activity plan shall include at least the following sections:

1. Institutional structure (management scheme, activity area, sub-area, mechanism for introducing new representatives of the area, description of involved participants and their export capacity, development and adaptation possibilities of performers of economic activity to the global market, experience of managers (experience in years and total project value), experience of the manager of research direction. Additionally, briefly describe the prior experience of the beneficiary and participants in the development of innovative projects and the activity carried out within the framework thereof).

2. Research project evaluation commission (conformity of the composition with the research direction and its role, operational procedures, conformity with the regulations, involvement of experts).

3. Planned area of the long-term strategy for smart specialisation (describe the selected area of the long-term strategy for smart specialisation and its sub-areas, envisaging the implementation of interdisciplinary projects).

4. Research directions (describe the planned research directions, provide a brief summary, the main activities, the planned results).

5. Development of the ecosystem (characterise cooperation with other beneficiaries and authorities in respect of the development of the area of the long-term strategy for smart specialisation).

6. Planned period of the research implementation (indicate the start and end dates (in the format dd/mm/yyyy)).

7. Ensuring of cooperation with cooperation partners within the framework of the project (briefly describe how it is planned to involve cooperation partners. Formation of new cooperation, key selection factors thereof, the planned activities to promote cooperation with representatives of the area of the long-term strategy for smart specialisation).).

8. Planned results (identify the planned results in accordance with Cabinet regulations and describe how it is planned to achieve the results).

9. Sustainability (describe the sustainability vision for future development after the end of the planning period, explaining the following aspects: involvement in the development of laws and regulations, attraction of private funding, involvement in other European Union fund projects).

 

Annex 3
Cabinet Regulation No. 34
9 January 2024

[2 April 2024]

Criteria for the Evaluation of Project Applications

Name of the operational programme		Plan for Recovery and Resilience Facility of Latvia
Reform and investment direction	2.2.	Digital Transformation and Innovations of Enterprises
Reform	2.2.1.r.	Establishment of Full Cycle Support for Digital Transformation of Entrepreneurship with Regional Scope
Investment	2.2.1.3.i.	Aid for the introduction of New Products and Services into Entrepreneurship
Funding		EUR 24 300 000
Type of project selection		Open project application selection
Responsible institution		Ministry of Economics

Within the framework of Cabinet Regulation No. 34 of 9 January 2024, Regulations Regarding the Implementation of Investment 2.2.1.3.i "Aid for the Introduction of New Products and Services into Entrepreneurship" of Reform and Investment Direction 2.2 "Digital Transformation and Innovations of Enterprises" of the Plan for Recovery and Resilience Facility of Latvia (hereinafter - the Cabinet Regulation), the project applications shall be evaluated according to exclusion criteria and general criteria, including non-clarified ones (hereinafter - N) which the project applicant cannot clarify, and clarified ones (hereinafter - P) which the project applicant can clarify (if the criterion is not met, the Agency shall take the decision on approval of the project application with the condition that the project applicant ensures full conformity with the criterion within the specified period and in accordance with the established procedures).

Quality criteria shall be evaluated with points.

I. EXCLUSION CRITERIA

Criterion		Impact of the criterion on decision-taking (N1)
At the time of submission of the project and granting of aid, the project applicant is in the following exclusion situation2:
1.1.	conforms to any of the exclusion criteria referred to in Paragraph 33 of the Cabinet Regulation	N

II. ELIGIBILITY CRITERIA

2.1. GENERAL ELIGIBILITY CRITERIA		Impact of the criterion on decision-taking (P3)
2.1.1.	The project applicant has submitted one project application and received a comfort letter from the sectoral association in respect of the relevance of the project to the development of the sector (hereinafter - the comfort letter), if applicable	P
2.1.2.	The project applicant has no debt of taxes4 in the Republic of Latvia administered by the State Revenue Service, including debts of the mandatory State social insurance contributions, the total amount of which exceeds EUR 1505	P
2.1.3.	The project applicant has provided information on its financial capacity to implement the project, including information on securing private co-funding and administration and implementation capacity	P
2.1.4.	The objective of the project conforms to the objective specified in the Cabinet Regulation, and the value of the objective of the project is accurately defined, justified, measurable, and contributes to achieving the objectives specified in the Cabinet Regulation	P
2.1.5.	Financial calculation in the project application is arithmetically correct, and the project application conforms to all requirements for the completion of the project application form	P
2.1.6.	The funding indicated in the project application does not exceed the maximum funding available for one beneficiary within the framework of the project, including at least 25 per cent of the total eligible costs of the project will be used for experimental development	P
2.1.7.	The planned activities of the project applicant do not conform to the activities referred to in Paragraphs 34, 48, and 50 of the Cabinet Regulation	P

2.2. SPECIFIC ELIGIBILITY CRITERIA OF THE PROJECT			Impact of the criterion on decision-taking (P; N)
2.2.1.	The project applicant has described in the project application how the area of smart specialisation, in which the project applicant intends to implement the project, will be developed: • knowledge-intensive bioeconomy; • biomedicine, medical technologies, pharmacy; • photonics and smart materials, technologies and engineering systems; • smart power industry and mobility; • information and communication technologies		P6
2.2.2.	The expected results and supervision indicators planned in the project application are defined, justified, and measurable, and contribute to achieving the indicators specified in the Cabinet Regulation		P
2.2.3.	The project application identifies, describes, and evaluates project risks, assesses their impact and probability of occurrence, and also determines risk mitigation measures		P
2.2.4.	The project applicant conforms to the following requirements referred to in Paragraph 31 of the Cabinet Regulation:		P
	2.2.4.1.	it is a legal person that unites entrepreneurs
	2.2.4.2.	its shareholders or members include at least one sectoral association or at least five mutually unrelated entrepreneurs of the sector or recognised agricultural service cooperative societies whose total turnover in the last closed reporting year amounts to at least EUR 150 million, or the project applicant submits a comfort letter from a sectoral association which unites performers of economic activity in the sector whose total turnover in the last closed reporting year amounts to at least EUR 150 million. When determining the total turnover in the last closed reporting year, it shall not include the turnover of research and knowledge-dissemination organisations and local governments
	2.2.4.3.	its shareholders or members include at least one sectoral association or at least five mutually unrelated entrepreneurs of the sector or recognised agricultural service cooperative societies whose total amount of export in the last closed reporting year amounts to at least EUR 75 million, or the project applicant submits a comfort letter from a sectoral association which unites performers of economic activity in the sector whose total amount of export in the last closed reporting year amounts to at least EUR 75 million. When determining the total amount of export in the last closed reporting year, it shall not include the export indicators of research and knowledge-dissemination organisations and local governments
	2.2.4.4.	more than 51 per cent of the project applicant's equity capital or right to vote are owned by performers of economic activity or associations and members thereof which unite performers of economic activity
	2.2.4.5.	it conforms to the conditions for the aid for commercial activity and the conditions for de minimis aid in accordance with Commission Regulation No 2023/2831
	2.2.4.6.	no signs are established indicating a conflict of interest, corruption, fraud, or a situation of double funding
2.2.5.	Aided activities and eligible costs planned in the project are accurately defined and measurable		P
2.2.6.	The project applicant has developed a project activity plan which describes the following:		P
	2.2.6.1.	the institutional structure of the project applicant
	2.2.6.2.	the research project evaluation commission
	2.2.6.3.	the planned area of smart specialisation
	2.2.6.4.	justification of the selected research direction and conformity thereof with the areas of smart specialisation and sectoral development trends
	2.2.6.5.	development of the ecosystem
	2.2.6.6.	period of the research implementation
	2.2.6.7.	ensuring of cooperation with cooperation partners within the framework of the project
	2.2.6.8.	planned results
	2.2.6.9.	sustainability
2.2.7.	The project applicant has prepared and characterised the criteria for the evaluation of the research projects eligible for aid in accordance with the methodology for applying the criteria for the evaluation of research projects developed by the Ministry of Economics, including the provision of horizontal principles in the criteria for the evaluation of research projects		P
2.2.8.	The project application describes how adherence to the principle of gender equality and equal opportunities will be ensured		P

III. QUALITY CRITERIA

Criteria			Evaluation system - scale of points
3.1.	The total amount of export in the last closed financial year of the project applicant and shareholders or members thereof (unrelated micro, small, medium-sized, and large entrepreneurs), excluding research and knowledge-dissemination organisations and local governments, or the total amount of export in the last closed financial year until the submission of the project application for the sectoral association which unites performers of economic activity in the sector, excluding research and knowledge-dissemination organisations and local governments, and has provided a comfort letter:		The minimum number of points in the sub-criterion - 5 points
	3.1.1.	The total amount of export in the last closed reporting year of the project applicant and shareholders or members thereof, excluding research and knowledge-dissemination organisations and local governments, amounts to at least EUR 600 million, or the project applicant provides a comfort letter from the sectoral association which unites performers of economic activity in the sector, excluding research and knowledge-dissemination organisations and local governments, the total amount of export in the last closed reporting year amounts to at least EUR 600 million	15
	3.1.2.	The total amount of export in the last closed reporting year of the project applicant and shareholders or members thereof, excluding research and knowledge-dissemination organisations and local governments, amounts to at least EUR 330 million, or the project applicant provides a comfort letter from the sectoral association which unites performers of economic activity in the sector, excluding research and knowledge-dissemination organisations and local governments, the total amount of export in the last closed reporting year amounts to at least EUR 330 million	10
	3.1.3.	The total amount of export in the last closed reporting year of the project applicant and shareholders or members thereof, excluding research and knowledge-dissemination organisations and local governments, amounts to at least EUR 75 million, or the project applicant provides a comfort letter from the sectoral association which unites performers of economic activity in the sector, excluding research and knowledge-dissemination organisations and local governments, the total amount of export in the last closed reporting year amounts to at least EUR 75 million	5
3.2.	The total turnover in the last closed financial year of the project applicant and shareholders or members thereof (unrelated micro, small, medium-sized, and large entrepreneurs), excluding research and knowledge-dissemination organisations and local governments, or the total turnover in the last closed financial year until the submission of the project application for the sectoral association which unites performers of economic activity in the sector, excluding research and knowledge-dissemination organisations and local governments, and has provided a comfort letter:		The minimum number of points in the sub-criterion - 5 points
	3.2.1.	The total turnover in the last closed reporting year of the project applicant and shareholders or members thereof, excluding research and knowledge-dissemination organisations and local governments, amounts to at least EUR 1 billion, or the project applicant provides a comfort letter from the sectoral association which unites performers of economic activity in the sector, excluding research and knowledge-dissemination organisations and local governments, the total turnover in the last closed reporting year amounts to at least EUR 1 billion	15
	3.2.2.	The total turnover in the last closed reporting year of the project applicant and shareholders or members thereof, excluding research and knowledge-dissemination organisations and local governments, amounts to at least EUR 550 million, or the project applicant provides a comfort letter from the sectoral association which unites performers of economic activity in the sector, excluding research and knowledge-dissemination organisations and local governments, the total turnover in the last closed reporting year amounts to at least EUR 550 million	10
	3.2.3.	The total turnover in the last closed reporting year of the project applicant and shareholders or members thereof, excluding research and knowledge-dissemination organisations and local governments, amounts to at least EUR 150 million, or the project applicant provides a comfort letter from the sectoral association which unites performers of economic activity in the sector, excluding research and knowledge-dissemination organisations and local governments, the total turnover in the last closed reporting year amounts to at least EUR 150 million	5
3.3.	Experience of the project manager in the management of innovation projects over the last 10 years:		The maximum number of points in the sub-criterion - 5 points
	3.3.1.	The total value of the implemented projects is at least EUR 7 million	5
	3.3.2.	The total value of the implemented projects is at least EUR 5 million	3
	3.3.3.	The total value of the implemented projects is at least EUR 2.5 million	1
	3.3.4.	The total value of the implemented projects is less than EUR 2.5 million	0
3.4.	Experience of the project applicant in Latvian or international (implemented with the involvement of a foreign partner) innovation projects over the last 10 years:		The maximum number of points in the sub-criterion - 5 points
	3.4.1.	The project applicant has implemented a project in one of the European Union's innovation support programmes or other innovation support programmes with a total project funding of at least EUR 7 million	5
	3.4.2.	The project applicant has implemented a project in one of the European Union's innovation support programmes or other innovation support programmes with a total project funding of at least EUR 5 million	3
	3.4.3.	The project applicant has implemented a project in one of the European Union's innovation support programmes or other innovation support programmes with a total project funding of at least EUR 2.5 million	1
	3.4.4.	The project applicant has implemented a project in one of the European Union's innovation support programmes or other innovation support programmes with a total project funding of less than EUR 2.5 million	0
3.5.	Quality criteria regarding horizontal priorities
	3.5.1.	Implementation of the project will reduce the environmental pollution or preserve the current state, and activities have been determined to prevent or mitigate negative impact on the environment:	The maximum number of points in the sub-criterion - 4 points
	3.5.1.1.	as a result of the project activities, technologies will be developed to ensure efficient and effective use of natural resources in the introduction of a cleaner production process, reducing the consumption of raw materials and energy, emissions and waste volume	4
	3.5.1.2.	as a result of the project implementation, technologies will not be developed to ensure efficient and effective use of natural resources in the introduction of a cleaner production process, reducing the consumption of raw materials and energy, emissions and waste volume	0
	3.5.2.	Implementation of the project envisages application of the green procurement principles in the procurement:	The maximum number of points in the sub-criterion - 4 points
	3.5.2.1.	it is planned to implement the green procurement principles within the framework of the project	4
	3.5.2.2.	it is not planned to implement the green procurement principles within the framework of the project	0
The maximum number of points - 48 The minimum number of points in the criteria - 14 Project applicants who have obtained the highest number of points shall be eligible for aid. If the same number of points is obtained, the conditions referred to in Sub-paragraph 22.5 of the Cabinet Regulation shall be complied with. The project applicant may not indicate several areas of smart specialisation in the project application. When evaluating project applications, at least one project application that has received the highest number of points shall be initially approved in each area of smart specialisation. If a larger number of projects are submitted in any area of smart specialisation, after the approval of the first project in the area of smart specialisation it shall be possible to approve another project in the area of smart specialisation that has obtained the highest number of points. If there is remaining undivided funding from the Recovery and Resilience Facility of Latvia after the project selection, the project with the highest number of points shall be approved for the remaining funding, irrespective of the area of smart specialisation

Notes.

¹ The project application shall be rejected if the evaluation in the criterion is "Yes".

² Conformity to the criterion shall be verified:

1) as at the day the project application is submitted;

2) as at the day of taking the decision on approval of the project application or the day of providing the opinion on conformity with the conditions if the decision on conditional approval of the project application was taken previously.

³ If the project application does not conform to the criterion, the Central Finance and Contracting Agency shall take the decision on conditional approval of the project application.

⁴ Information on the project applicants' debts of taxes shall be verified using the database of debtors of taxes (fees) administered by the State Revenue Service (https://www.vid.gov.lv/lv/nodoklu-paradnieki):

1) as at the day the project application is submitted;

2) as at the day the clarifications are submitted.

⁵ Except for tax payments for which the payment term has been extended, divided in instalments, deferred, or divided in instalments repeatedly in accordance with Section 24, Paragraphs one, 1.³, and 1.⁷ of the law On Taxes and Fees, or in respect of which a settlement agreement has been entered into in accordance with Section 41 of the law On Taxes and Fees.

⁶ The project application shall be rejected if it does not conform to the area of smart specialisation.

 

Annex 4
Cabinet Regulation No. 34
9 January 2024

[2 April 2024]

Declaration of Impartiality, Confidentiality, and Absence of a Conflict of Interest

I, (given name, surname), hereby declare that I agree to participate in the evaluation of research projects (hereinafter - the research project) of Investment 2.2.1.3.i "Aid for the Introduction of New Products and Services into Entrepreneurship" Reform and Investment Direction 2.2 "Digital Transformation and Innovations of Enterprises" of the Plan of Recovery and Resilience Facility of Latvia (hereinafter - the Recovery Fund), including interim evaluation.

I declare that I am not linked to the research project within the meaning of the law On Prevention of Conflict of Interest in Activities of Public Officials and within the meaning of Article 61 of Regulation (EU) No 2018/1046^[1], and I have not participated in the preparation of the research projects to be evaluated, and also there are no circumstances that could cause me to violate the restrictions laid down in laws and regulations for the person involved in the management, implementation, and supervision of the Recovery Fund, and that could constitute a reason to believe that I am interested in the approval or refusal of any specific research project. I declare the absence of a conflict of interest with my signature.

There are no reasons, including those related to family, emotional ties, political or national affiliation, economic interests, or any other direct or indirect personal interests, that could cast doubt on my independence and impartiality in the decision-making process.

I will immediately inform the chairperson or deputy chairperson of the research project evaluation commission if any circumstances arise that could question my impartiality and independence in decision-making.

When reviewing the received research projects, I will perform my duties responsibly and professionally, and also provide impartial opinions.

I undertake not to disclose to third persons any information that has become known or available to me during the evaluation of the research projects, and also I undertake to use the available information and documents only for the evaluation of the research projects and for decision-making regarding them. I undertake not to retain and not to hand over any written or electronic information on the research project and evaluation thereof to third persons.

I am fully aware that if I violate the conditions of this declaration, I will be excluded from the research project evaluation commission and I will be held liable in accordance with applicable laws and regulations.

Date

Signature

Given name, surname

^[1] Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012.

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