Brexit Adjustment Reserve (BAR)

Brexit Adjustment Reserve (BAR)

Brexit Adjustment Reserve - NEWS

Brexit Adjustment Reserve: Commission approves almost €627 million pre-financing...

16 June 2022

Brexit Adjustment Reserve: Commission approves €2 billion of pre-financing...

14 March 2022

Brexit Adjustment Reserve: Commission approves €116 million pre-financing for...

09 December 2021

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The withdrawal of a Member State from the EU is an unprecedented situation both for the EU as a whole and for its Member States. BREXIT will affect all Member States but in different ways. Some Member States, regions, sectors or local communities will be more affected than others. This is why the proposal is designed to support all Member States while ensuring a strong concentration on those most affected. The design of the Brexit Adjustment Reserve acknowledges these particular circumstances: it does not ask for advance programming or planning of measures and provides for flexibility in the implementation and in line with the subsidiarity principle.

The Regulation entered into force in October.

Next steps

Notification - In order to receive the pre-financing we call on remaining Member States to notify the Commission pursuant to Article 14(1)d of the BAR Regulation. The Commission will swiftly process the adoption of financing decision(s) to ensure that Member States can promptly receive the support.

How much money is available?

The maximum amount available for the Reserve will be EUR 5.4 billion. All amounts on this page are expressed in “current prices” (i.e. including the indexation of annual amounts over the period). A special temporary instrument outside the EU budget ceilings of the Multiannual Financial Framework 2021-2027 was set up for this purpose.

How will the resources be distributed?

The maximum amount was provisionally allocated among Member States and will be disbursed in two allocation rounds. The first round (80%) will be activated in the form of pre-financing, paid in three instalments of around EUR 1.7 billion in 2021, and EUR 1.3 billion by April 2022 and EUR 1.3 billion by April 2023; the remaining amount of EUR 1.1 billion – will be paid in 2025 to reimburse eligible costs actually incurred and paid by Member States in implementing measures eligible for support.

The financial contribution from the reserve to a Member State will be implemented under shared management, with the contribution used.

Allocation of the resources

According to Regulation, three factors will be used to calculate how much money each EU country will receive from the Reserve:

• The factor linked to fish caught in the UK EEZ is used to allocate EUR 656 million
• The factor linked to trade is used to allocate EUR 4.5 billion
• The factor linked to maritime border regions with the UK is used to allocate EUR 274 million

Member states that depend significantly on fisheries will have to direct a specific percentage of their national allocation to small-scale coastal fisheries and local and regional communities dependent on fishing activities

What types of measures will the Reserve finance and over what period of time?

The Reserve will support measures specifically set up in relation to the withdrawal of the UK from the Union. They can include the following:

• support to economic sectors, business and local communities, and organisations, including small-scale coastal fisheries, dependent on fishing activities in the UK waters;
• support to job creation and protection, including through short-time work schemes, re-skilling and training;
• measures aimed at the re-integration of Union citizens as well as persons having the right to reside on the territory of the Union who left the United Kingdom, as a result of the withdrawal of the United Kingdom from the Union
• ensuring the functioning of border, customs, sanitary and phytosanitary and security controls, fisheries control, certification and authorisation regimes
• measures for communication, information and awareness raising of citizens and businesses about changes to their rights and obligations stemming from the withdrawal of the United Kingdom from the Union.

The reference period for the expenditure starts with retroactivity on 1 January 2020 to 31 December 2023. The expenditure is eligible for a financial contribution from the Reserve also for measures carried over before the reference period but incurred and paid by authorities in the Member States, at national, regional or local level during the reference period.

Will the fisheries sector receive an earmarked support from the Reserve?

The withdrawal of the UK from the EU poses specific risks to the fisheries sector in terms of less favourable access to the UK waters and of other changes ensuing from Brexit. Therefore, a part of the contribution from the reserve will be earmarked for the most concerned Member States (above 10 million of contribution from the fishery criteria in the allocation method). At least 50% of this amount or 7% of their provisionally allocated amount, whichever is lower, should be spent on measures to support local and regional coastal communities, including the fisheries sector in particular the small scale coastal fisheries sector dependent on fishing activities. The scope will concern measures to support regional and local communities and organisations, including the small scale coastal fisheries, dependent on fishing activities in the United Kingdom waters in the waters of its territories with special status or in the waters covered by fisheries agreements with coastal states where fishing opportunities for EU fleets have been reduced as a result of the United Kingdom’s withdrawal from the Union. If the earmarking threshold is not completely met, 50% of the earmarked amount which is unused shall be deducted in the calculation of the total accepted amount.

Legal basis

• Full text of the BAR regulation on Eur-Lex : 8/10/2021
• BAR Statement on further measures to protect the EU budget and Next Generation EU resources (NGEU) against fraud and irregularities by requiring an obligatory use of a single data-mining tool provided by the Commission: 8/10/2021
• Commission Implementing Decision on provisional amounts allocated per Member State: 8/10/2021

Background

• Commission Proposal on the Brexit Adjustment Reserve: 26/12/2020
• Press release and related documents: 25/12/2020
• Council endorsement: 17/06/2021
• EP REGI endorsement: 13/07/2021

Key Documents

Annual breakdown of the pre-financing per Member State from the Brexit Adjustment Reserve Download 

BAR - generic examples Download 

Q&A on audit related matters Download 

Seminar to Member States (Q&A) - Presentation Download 

BAR – Summary of notifications/payments disbursed Download 

Contacts

European Commission
DG Regional and Urban Policy
REGIO-E1-BAR@ec.europa.eu
B-1049 Brussels Belgium

Stefan APPEL
(Head of Unit)
Stefan.Appel@ec.europa.eu
 

Dominika CHROSZCZ-KOCZERGA
Dominika.CHROSZCZ@ec.europa.eu
phone: +32 229-69869

What is the Brexit Adjustment Reserve

The Brexit Adjustment Reserve will provide support to Member States, regions and sectors, in particular those that are worst affected by the adverse consequences of the withdrawal of the UK from the Union, mitigating thus its impact on economic, social and territorial cohesion. It will contribute to specific measures set up by the Member States to help businesses and economic sectors, workers, regions and local communities suffering from the impact of the end of transition period.

Why is a Brexit Adjustement Reserve needed?

Even with the new EU-UK Trade and Cooperation Agreement in place, there will be big changes on 1 January 2021. On that date, the UK will leave the EU Single Market and Customs Union, as well as all EU policies and international agreements. It will put an end to the free movement of persons, goods, services and capital with the EU.

The EU and the UK will form two separate markets; two distinct regulatory and legal spaces. This will recreate barriers to trade in goods and services and to cross-border mobility and exchanges that have not existed for decades – in both directions, affecting public administrations, businesses, citizens and stakeholders on both sides.

Will it cover all Member States?

The Reserve will cover all Member States. Its allocation method, architecture and functioning are designed in order to allow the concentration on those that are worst affected.

How much money will it make available?

The maximum amount available will be €5 billion (in 2018/constant prices; EUR 5.37 billion in current prices). It will be set up as a special instrument outside of the EU budget ceilings of the Multiannual Financial Framework 2021-2027.

How will the resources be distributed?

The support will be disbursed in two allocation rounds. The first, more substantial one will be activated in 2021 in the form of pre-financing, whereby an amount per Member State will be determined based on an allocation key taking into account the relative degree of economic integration with the UK, including trade in goods and services. An additional amount will be allocated to reflect the losses that some Member States will suffer from the limitations in accessing the UK waters for fishing activities.

The second payment round will be disbursed in 2024 in the form of additional contribution based on the expenditure incurred and declared to the Commission, taking into account the use of the pre-financing. If this expenditure exceeds both the amount of the pre-financing and 0.06% of the nominal GNI of 2021, the Member States will receive an additional amount from the Reserve.

What types of measures will the Reserve finance and over what period of time?

The Reserve will support measures specifically set up in relation to the withdrawal of the UK from the Union. They can include the following:

• support to economic sectors, business and local communities, including those dependent on fishing activities in the UK waters;
• support to employment and reintegration in the labour market of citizens returning from the UK, including through short-time work schemes, re-skilling and training;
• ensuring the functioning of border, customs, sanitary and phytosanitary and security controls, fisheries control, certification and authorisation regimes, communication,information and awareness raising for citizens and businesses.

The eligibility period for the expenditure starts on 1 July 2020 and will run for 30 months in order to give the possibility and the flexibility to the Member States to design and implement the necessary measures aimed at stemming the immediate impact of the withdrawal.

Will the fisheries sector receive support from the Reserve?

It is clear that the withdrawal of the UK from the EU poses specific risks to the fisheries sector in terms of less favourable access to the UK waters. The proposal reflects this reality in the way the resources of the first disbursement are allocated among Member States. It is up to Member States to design the support measures targeting the sectors and communities most affected.

How will the Commission and the Member States make sure that the resources from the Reserve are spent efficiently and effectively?

The budget allocated to the Reserve will be implemented under shared management with the Member States, guaranteeing full respect of the principles of sound financial management, transparency and non-discrimination and the absence of conflict of interest. The Commission's proposal sets out clearly the responsibilities for the Member States and a set of requirements for the bodies responsible for the management, control and audit of the financial contribution under the Reserve. In doing so, it strikes the right balance between legality and regularity of expenditure on the one hand and simplification on the other, ensuring that the Brexit Adjustment Reserve can be made available as soon as possible to address the immediate consequences of the withdrawal.

In addition, in order to avoid extra financial and administrative burdens on the Member States, Member States could also roll over existing systems already used for the management and control of cohesion policy funding or the European Union Solidarity Fund.