Who has the fiscal responsibility when an informal group participates in a project?
According to Article 7.1.3 of the Programme Implementation Agreement, informal groups can be project partners. They are not eligible to be Project Promoters. As only the Project Promoter signs the project contract, it is the Project Promoter who is fiscally responsible for project as a whole, and by extension also for the informal group (as for any other project partners).
In the relation between the Project Promoter and the informal group as project partner, the informal group must be represented by a single person, with legal residency in the Beneficiary State, who signs the partnership agreement on behalf of the group, pursuant to point (f) of Article 7.1. Depending on the legal context, this person could be viewed as being fiscally responsible for the informal group. The Project Promoter needs to assess this and ensure compliance with national legislation.
Including informal groups in projects can increase the complexity and risk of a project, and we would advise that Fund Operators provide training and capacity building to Project Promoters partnering with informal groups to promote the successful implementation of such projects.