Reductions and Sanctions on Payment Claims related to Investment Measures
Where payment claims contain ineligible expenditure, reductions and sanctions are to be applied in accordance with Article 63 of Regulation (EU) No 809/2014, unless the beneficiary can provide a justification for the ineligible expenditure claimed.
In this regard the Agency will make the necessary deductions in line with the European Commission’s Guidelines for determining financial corrections to be made to expenditure financed by the Union under shared management, for non-compliance with the rules on public procurement.
Exclusion and Blacklisting
The procurement of works, services and supplies to be reimbursed through EU funding must follow the principles of the Public Procurement Regulations. In this regard private beneficaries are also required to follow the ‘spirit’ of these Regulations with a high standard of diligence and in a manner that ensures a fair and transparent process with equal treatment for economic operators and which ensures best market value for the EU funds disbursed. 
The Public Procurement Regulations in particular require that no economic operator or sub-contractor can be awarded a public contract if s/he is subject to any of the exclusion or blacklisting grounds mentioned under Part VI of the Public Procurement Regulations. Regulation 192 of the Public Procurement Regulations sets out grounds for exclusion of economic operators from procurement procedures.
An economic operator may be excluded from a procedure where the authority responsible has established or is otherwise made aware that such an economic operator has been the subject of a conviction by final judgement as follows:

  • ​Participation in a criminal organisation
  • Corruption
  • Fraud
  • Money laundering
  • Terrorist offences/financing
  • Child labour and other forms of human trafficking

A blacklist for companies that breach the Public Procurement Regulations or employment laws has also been created  in terms of Article 192 of Legal Notice 352 of 2016 and as published from time to time by the Department of Contracts. Blacklisting assists in the curbing of precarious work and also allows for the exclusion of companies or individuals convicted of corruption, fraud, money laundering, tax evasion, evasion of employee’s social security contribution, organised crime, employment of minors, unprofessional behaviour and distortion of competition.
In accordance with the foregoing, expenditure relating to economic operators convicted of a criminal offence are considered ineligible for funding and such expenditure will not be reimbursed by the Agency. It is the beneficiary’s own responsibility not to incur expenditure intended for re-imbursement from public funds from any such operators, including but not limited to the following list of economic operators for which expenditure is considered ineligible for reimbursement from EAGF or EAFRD, updated as at 26th February 2019:

It should be clarified that expenditure related to entities in which these individuals or companies are involved is also deemed to be ineligible.