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1. Unless specified otherwise in Part Two, the contributions of private members shall consist of financial contributions and of any of the following:

(a) in-kind contributions to operational activities;

(b) in-kind contributions to additional activities, approved by the governing board in accordance with Article 17(2), point (n).

2. Unless specified otherwise in Part Two, the private members shall report by 31 May each year at the latest to their respective governing board on the value of the contributions referred to in paragraph 1, point (b), made in each of the previous financial years. For the purpose of valuing these contributions, the costs shall be determined in accordance with the usual cost accounting practices of the entities concerned, to the applicable accounting standards of the country where the entity is established, and to the applicable International Accounting Standards and International Financial Reporting Standards. The costs shall be certified by an independent audit body appointed by the entity concerned and shall not be audited by the joint undertaking concerned or any Union body. The valuation method may be verified by the joint undertaking concerned should there be any uncertainty arising from the certification. In duly specified cases, the governing board may authorise the use of lump sums or unit costs for valuing those contributions.

3. The contributions from participating states shall consist of financial contributions. The participating states shall report by 31 January of each year to the governing board on the financial contributions made in the previous financial year.

4. The contributions from international organisations shall consist of financial contributions and in-kind contributions to operational activities, unless specified otherwise in Part Two.

5. The contributions from contributing partners shall correspond to the amounts they have committed in the letter of endorsement when becoming a contributing partner and shall consist of financial contributions and in-kind contributions to operational activities.

6. The Commission may terminate, proportionally reduce or suspend the Union financial contribution to a joint undertaking or trigger the winding-up procedure referred to in Article 45 in any of the following cases:

(a) where the joint undertaking concerned fails to meet the conditions for the entrustment of the Union contribution;

(b) where the members other than the Union or their constituent or affiliated entities fail to contribute, contribute only partially, do not respect the time limits set out in paragraph 2 with regard to the contribution referred to in paragraphs 1, 4 and 5 of this Article;

(c) as a result of the evaluations referred to in Article 171(2).

7. The Commission’s decision to terminate, proportionally reduce or suspend the Union financial contribution shall not hinder the reimbursement of eligible costs already incurred by the members other than the Union before the decision is notified to the joint undertaking.

8. Following the procedure set out in Article 28(6), any member of the joint undertaking other than the Union that fails to meet their commitments concerning the contributions referred to in this Regulation shall be disqualified from voting in the governing board until their obligations have been met. Where any such member fails to meet their obligations upon expiry of an additional six-month period, their membership shall be revoked, unless the governing board decides otherwise in duly justified cases. The entity concerned shall not participate in the vote of the governing board.