The Mutual Insurance Mechanism (MIM) is similar to an insurance scheme for all beneficiaries by providing security against certain defaults in payment. The beneficiaries' liability towards the EU Commission/Funding Agency is limited to their own debts. The settlement of financial claims between beneficiaries requires an internal solution within the consortium.
Five to eight percent of the maximum EU grant is deducted from the pre-financing payment at the start of the project and paid into the MIM (the exact rate is found in point 4.2 in the Data Sheet of the Grant Agreement (GA)). This amount will be transferred to the coordinator at the end of the action.
MIM interventions in the event of open claims by the EU Commission/Funding Agency
The MIM will intervene during an ongoing action if a beneficiary withdraws from the action and does not or is not able to repay the excess amount received.
After the end of the action the MIM will intervene if the EU Commission/Funding Agency issues a recovery order at the final payment, because the total amount paid to the consortium exceeds the agreed amount. If the recovery order fails, the MIM will intervene and transfer the amount owed to the EU Commission/Funding Agency.
No MIM interventions
The MIM will not intervene in the event of open claims within the consortium. This is primarily the case during the action when one beneficiary breaches the agreement and does not respond to claims for repayment of pre-financing, without, however, withdrawing from the project.
The coordinator may also be required to reclaim money from individual beneficiaries after the end of the action and distribute it among the other beneficiaries without the EU Commission having an open claim against the beneficiaries. These are also cases where the MIM will not intervene and an internal solution within the consortium will need to be found.
More information can be found ...
- in the Annotated Grant Agreement (AGA), Article 22
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