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European Commission
IP/04/945
Brussels, 16 July 2004
Commission claws back EUR 143.86 million of CAP expenditure from the Member
States
EUR 143.86 million of EU farm money misspent by Member States will be
claimed back, following a decision adopted by the European Commission
today. The money is to be recovered because of inadequate control
procedures or non-compliance with EU rules on agricultural
expenditure. While Member States are responsible for paying out and
checking virtually all expenditure under the Common Agricultural
Policy (CAP), the Commission is required to ensure that Member States
have made correct use of the funds.
Commenting on the decision, Franz Fischler, Commissioner for
Agriculture, Rural Development and Fisheries said "The audit procedure
is essential to control the spending of EU farm subsidies in the
Member States. As today's decision shows, the Commission does not
hesitate to recover misspent funds from the Member States."
This audit procedure is a vital instrument for controlling CAP
expenditure, permitting the recovery of sums paid out without
sufficient guarantees as to the legitimacy of the payments made or the
reliability of the control and verification system in the Member State
concerned.
Main financial corrections
Under the present decision, funds are recovered from Belgium, Germany,
Greece, Spain, Finland, France, Ireland, Italy, Luxembourg,
Netherlands, Portugal and United Kingdom. The most significant
individual recoveries are:
* EUR 28,13 million charged to France mainly for shortcomings in
on-the-spot checks in the view of not fully operational data base
for bovine in Animal Premiums sector ;
* EUR 22,64 million charged to France mainly for correction of total
expenditure in Haute-Corse for bovine in Animal Premiums sector ;
* EUR 21,10 million charged to Italy mainly for ineffective key
controls, not fully operational I&R database, lack or deficiency
in control and administration of the scheme and on-the-spot checks
in Animal Premiums sector ;
* EUR 15,62 million charged to Greece mainly for absence of key
control : non-operational status of the I&R database and
deficiency in on-the-spot checks in Animal Premiums sector.
Background : How the system works
Member States responsible for payments and recoveries
The Member States are responsible for making practically all the
payments, charging all the levies and recovering all undue payments
within the framework of the EAGGF (European Agricultural Guidance and
Guarantee Fund) Guarantee Section.
The clearance of accounts procedure requires the Commission to ensure,
primarily by means of on-the-spot inspections, that the Member States
have made correct use of the funds placed at their disposal by the
EAGGF. The Commission carries out over 200 inspections in the Member
States each year.
Use of aerial and satellite photography and data bases
The Commission works with the Member States to ensure that the paying
agencies thoroughly check all claims before they are paid and that the
paying agencies' accounts and procedures are audited each year in
accordance with internationally recognised standards. The Commission
also actively assists all the Member States to put in place an
integrated control system using the most advanced techniques to check
fields by aerial or satellite photography and to cross-check claims in
computer data bases.
Recovery of funds
Where, despite these efforts, the Commission finds that the control
procedures in a Member State are wanting or do not conform to the EU
rules, it recovers the amount misspent from the Member State
concerned. If the systems put in place by a Member State prove
unsatisfactory, the Commission refuses to finance all or part of the
expenditure involved.
1995 reform of the system for recovering misspent sums
The system was overhauled in 1995 with the aim of making it more
efficient. It is now based on two separate procedures.
The first is purely financial, focusing on audits by Commission staff
(based on the certification of accounts proposed by independent
bodies) relating to the correctness and completeness of the accounts
and the paying agencies' compliance with the European Union's
standards. This procedure must be completed by 30 April each year.
The second relates to inspections by the Commission and involves the
recovery of all or part of the expenditure claimed for the previous 24
months if it is found that payments do not conform to the EU rules.
Amounts may be recovered in specific cases where anomalies or
systematic failings are found. If the losses for the Community cannot
be calculated precisely, the recovery may be set at 2%, 5%, 10% or 25%
of the expenditure in question, or even more. There is thus a strong
incentive for the Member States to improve the quality of their
monitoring and audit systems.
Member States' right of reply and the Conciliation Body
The Member States have the right of reply and the right to a fair
hearing. There is first an exchange of information between the Member
States and the Commission, followed by a discussion and an informal
bilateral meeting. Before the clearance decision is taken, the
procedure provides for all the significant corrections to be examined
by a panel of independent experts ensuring that the Member States'
arguments are heard. Finally, the Member States have the right to
appeal to the European Court of Justice.
If the requisite improvements have not been made, the Commission uses
all the means at its disposal to bring the Member States to comply
with the EU rules and, in flagrant cases, refuses to finance in full
the monthly advances declared by the Member States.
Full details of the recoveries for each of the decisions, by Member
State and by sector are given in the tables attached (annexes I-II).
Annex I
Clearance of accounts of EAGGF - Guarantee
Decision 17: Principle corrections by Member state
amount in
mio EURO
Belgium
Financial Audit, non respect of payment deadlines
0,01
Germany
Financial Audit, non respect of payment deadlines
2,20
Greece
Fruit & Vegetable, refusal of the expenditure : non compliance with
Regulation (EC) 2201/96 and (EC) 504/97 - non respect of the minimum
price, insufficient reimbursement of transport costs - processing of
the peaches
13,67
Fruit & Vegetables, ad-hoc correction - direct payments for producers
and shortcomings in key controls : processing of tomatoes
11,33
Fruit & Vegetables, shortcomings in key controls : processing of
tomatoes delivered by PO G.
0,37
Animal Premiums, absence of key control : non operational status of
the I&R database and deficiency in on-the-spot checks
15,62
Animal Premiums, financial impact of the correction imposed for the
financial years 1999-2000 (Commission decision n° 2003/536/EC) on the
expenditure declared in financial year 2002
0,04
Animal Premiums, over-declaration of expenditure to the EAGGF,
ineligible inclusion of VAT - production and marketing of honey
0,08
Spain
Animal Premiums, shortcomings in key and ancillary controls
0,89
Financial Audit, non respect of payment deadlines
11,49
Finland
Financial Audit, non respect of payment deadlines
0,06
France
Animal Premiums, correction of total expenditure (Haute-Corse) in
bovine premium
22,64
Animal Premiums, shortcomings in on-the-spot checks in the view of not
fully operational data base in bovine premium
28,13
Animal Premiums, shortcomings in on-the-spot checks
1,93
Animal Premiums, shortcomings in key controls (Haute-Corse) in ovine
premium
0,39
Financial Audit, non respect of payment deadlines
10,30
Ireland
Financial Audit, non respect of payment deadlines
0,05
amount in
mio EURO
Italy
Animal Premiums, flat rate correction 10% for ineffective key
controls, not fully operational I&R database, flat rate correction 5%
and 2% for lack or deficiency in control and administration of the
scheme and on-the-spot checks
21,10
Rural Develop. , correction - corrigendum ad-hoc decision 15
0,04
Luxembourg
Financial Audit, non respect of payment deadlines
0,13
Netherlands
Export Refunds, failure to implement and shortcomings in key controls
- non respect of Directive 91/628/EEC and Regulation 615/98 provisions
- export refunds for live cattle
1,06
Financial Audit, non respect of payment deadlines
0,47
Portugal
Financial Audit, non respect of payment deadlines
0,04
United Kingdom
Financial Audit, non respect of payment deadlines
1,80
TOTAL
143,86
Annex II
Clearance of accounts of EAGFL
Decision 17: Principle corrections by Sector
In Mio. EUR
LIVESTOCK PREMIUMS
90,82
EXPORT REFUNDS
1,06
FRUIT & VEGETABLES
25,37
RURAL DEVELOPMENT
0,04
FINANCIAL AUDIT
26,55
TOTAL
143,86
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