A total of 414 million of EU agricultural policy funds unduly spent by EU Member States is being claimed back by the European Commission under the ‘clearance of accounts procedure’. Member States are responsible for paying out and checking expenditure under the Common Agricultural Policy (CAP), and the Commission is required to ensure that Member States have made correct use of the funds. This money returns to the EU budget because of non-compliance with EU rules or inadequate control procedures on agricultural expenditure. Formally speaking, because some of these amounts have already been recovered from the Member States the net financial impact of today’s decision will be some EUR 393 million.
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Main financial corrections
Under this latest decision, funds will be recovered from 22 Member States: Belgium, Bulgaria, Czech Republic, Denmark, Germany, Ireland, Greece, Spain, France, Italy, Cyprus, Lithuania, Hungary, Malta, the Netherlands, Poland, Romania, Slovenia, Slovakia, Finland, Sweden and the United Kingdom. The most significant individual corrections are:
111.7 million (net financial impact (1) : 99.4 million) charged to UK – England for weaknesses in the Land Parcel Identification and Geographic Information Systems (LPIS-GIS), in the processing of applications, in administrative cross checks and in on-the-spot controls with regard to area aid;
48.3 million (net financial impact1 : 48.1 million) charged to Italy for infringements in cross compliance: poor control of several statutory management requirements (SMRs), three undefined good agricultural and environmental conditions (GAECs) and incorrect application of sanctions;
40.6 million charged to Spain for shortcomings in the management and control of export refunds: deficient ex-ante checks on beef, weaknesses in execution of physical checks, inadequate checks on production and stock of sugar, advance notice of physical checks given to the exporters;
34.4 million charged to Poland for weaknesses in the management of the early retirement scheme under the European Agricultural Fund for Rural development (EAFRD);
29 million charged to France for deficiencies in the on-the-spot controls in Natural Handicaps and Agri-environment measures under the EAFRD;
17.9 million charged to Italy for a gravely deficient control system and fraud in the citrus processing sector;
17.7 million (net financial impact (2) : 15.7 million) charged to UK Northern Ireland for weaknesses in LPIS-GIS, on-the-spot checks, payments and sanctions with regard to area aid;
16 million charged to Spain for deficiencies in the allocation of entitlements to beneficiaries for area aid;
12.5 million charged to Romania for weaknesses in the controls of beneficiaries’ eligibility and expenses as well as for deficiencies in the application of sanctions in the “Modernisation of agricultural holdings” measure under the EAFRD.
Background
Member States are responsible for managing most CAP payments, mainly via their paying agencies. They are also in charge of controls, for example verifying farmer’s claims for direct payments. The Commission carries out over 100 audits every year, verifying that Member State controls and responses to shortcomings are sufficient. The Commission has the power to claw back funds in arrears if audits show that Member State management and control is not good enough to guarantee that EU funds have been spent properly.
Annex I : Conformity clearance of accounts of EAGF and EAFRD
Decision 40: Corrections by Member state (In Million )
|
Sector and reason for correction |
Amount of correction |
Amount of net financial impact of the correction (3) |
|
Belgium |
|
|
|
Cross compliance – correction proposed for not implementing GAEC and partial on-the-spot controls |
2.477 |
2.477 |
|
Bulgaria |
|
|
|
Rural development – correction proposed for deficiencies in timing of the on-the-spot checks and sample selection |
0.023 |
0.023 |
|
Cyprus |
|
|
|
Rural development – correction proposed for late administrative checks and inappropriate timing of on-the-spot checks |
0.100 |
0.100 |
|
Other corrections – correction proposed for exceeding of ceilings |
0.001 |
0.000 |
|
Czech Republic |
|
|
|
Cross compliance – correction proposed for undefined GAEC and weaknesses in evaluation of non- compliances |
6.558 |
6.558 |
|
Rural development – correction proposed for lack of on-the-spot checks on livestock density |
4.477 |
4.455 |
|
Germany |
|
|
|
Rural development – correction proposed for weaknesses in selection among eligible applications and ineligible VAT included in payments |
3.739 |
3.739 |
|
Denmark |
|
|
|
Other corrections – correction proposed for deficiencies in debt recovery |
0.019 |
0.019 |
|
Spain |
|
|
|
Export refunds – correction proposed for deficient ex-ante checks on beef, weaknesses in execution of physical checks, inadequate checks on production and stock of sugar, advance notice of physical checks given to the exporters |
40.596 |
40.596 |
|
Area aid – correction proposed for deficiencies in the allocation of the entitlements |
16.030 |
16.030 |
|
Cross-compliance – correction proposed for one missing GAEC and for weaknesses in effectiveness of controls and in application of reduction |
6.486 |
6.485 |
|
Rural development – correction proposed for weaknesses in the on-the-spot controls and lack of traceability |
0.379 |
0.379 |
|
Other corrections – reimbursement due to rectification of the Annex III table for financial year 2006 (recovery of irregularities) |
Reimbursement 1.785 |
Reimbursement 1.785 |
|
Finland |
|
|
|
Other corrections – correction proposed for errors detected during the financial clearance exercise for 2009 |
0.067 |
0.067 |
|
France |
|
|
|
Livestock premiums – correction proposed for deficiencies in the holding register and non-compliance of the computer database |
4.474 |
4.465 |
|
Rural development – correction proposed for non-exhaustive administrative control of the preferential loans invoices and late audits in banks |
6.453 |
6.453 |
|
Rural development – correction proposed for deficiencies in the on-the-spot controls for Natural Handicaps and Agri-environment measures |
28.956 |
28.956 |
|
Late payments – correction proposed for late payments |
1.372 |
0.000 |
|
Other corrections – correction proposed for ineligible expenditure identified during the financial clearance exercise for 2008 |
0.108 |
0.108 |
|
UK |
||
|
Area aid – correction proposed for England for weaknesses in LPIS-GIS, in processing of applications, in administrative cross checks and in on-the-spot controls |
111.678 |
99.430 |
|
Area aid – correction proposed for Northern Ireland for weaknesses in LPIS-GIS, on-the-spot checks, payments and sanctions |
17.687 |
15.733 |
|
Cross-compliance – correction proposed for lenient sanctioning system and for not adequately controlled minimum requirements on fertilisers, plant protection product use and one SMR |
2.476 |
2.476 |
|
Rural development – correction proposed for deficiencies in the Agri-environment measures |
4.353 |
4.331 |
|
Other corrections – correction proposed for deficiencies in debt recovery |
1.829 |
1.829 |
|
Greece |
|
|||||||
|
Intervention storage – correction proposed for overpaid public storage costs |
0.428 |
0.428 |
||||||
|
Livestock premiums – correction proposed for weaknesses in timing of controls, in determination of the eligibility criteria, in risk analysis and in on-the-spot checks, lack of quality supervision for the delegated controls |
3.686 |
3.686 |
||||||
|
Other corrections – correction proposed for late payments and exceeding of ceilings |
5.209 |
4.822 |
||||||
|
Hungary |
|
|||||||
|
Cross-compliance – correction proposed for 8 undefined GAECs |
9.362 |
9.291 |
||||||
|
Ireland |
|
|||||||
|
Rural development correction proposed for weaknesses in the Early Retirement scheme and the Young Farmers scheme |
0.397 |
0.397 |
||||||
|
Late payments – correction proposed for late payments |
0.013 |
0.000 |
||||||
|
Other corrections – correction proposed for “known errors” found during the financial clearance for 2010 |
0.198 |
0.198 |
||||||
|
Other corrections – correction proposed for non-reporting of interest on debts |
0.030 |
0.030 |
||||||
|
Italy |
|
|
|
Fruit and Vegetables – correction proposed for a gravely deficient control system and fraud in the citrus processing sector |
17.914 |
17.914 |
|
Cross-compliance – correction proposed for several badly controlled SMRs, 3 undefined GAECs and incorrect application of sanctions |
48.302 |
48.095 |
|
Rural development – correction proposed for absence of cross-checks with the animal database and delayed on-the-spot checks |
1.246 |
1.246 |
|
Other corrections – correction proposed for late payments |
2.294 |
0.000 |
|
Other corrections – correction proposed for deficiencies in the accreditation criteria |
6.354 |
6.354 |
|
Lithuania |
||
|
Cross-compliance – correction proposed for missing GAECs, badly controlled GAECs and deficiencies in the application of sanctions |
1.462 |
1.461 |
|
Rural development – correction proposed for weak control system on eligibility of beneficiaries |
3.033 |
3.033 |
|
Malta |
||
|
Cross-compliance – correction proposed for lenient sanctioning system |
0.069 |
0.069 |
|
The Netherlands |
||
|
Other corrections – correction proposed for “known errors” found during the financial clearance of accounts for 2010 |
0.689 |
0.689 |
|
Poland |
||
|
Fruit and Vegetables – correction proposed for late payments and for weaknesses in the physical, administrative and accounting checks |
0.661 |
0.659 |
|
Rural development – correction proposed for weakness in management of the early retirement scheme |
34.452 |
34.452 |
|
Romania |
||
|
Rural development – correction proposed for weaknesses in the controls of eligibility of the beneficiary and expenses and for deficiencies in the application of sanctions in the Modernisation of agricultural holdings measure |
12.501 |
12.501 |
|
Rural development – correction proposed for incomplete checks on parcels and on logbooks |
5.199 |
2.960 |
|
Late payments – correction proposed for late payments |
0.083 |
0.000 |
|
Sweden |
||
|
Other corrections – correction proposed for exceeding of ceiling |
0.003 |
0.000 |
|
Slovenia |
||
|
Livestock premiums – correction proposed for failure to achieve the minimum rate of on-the-spot checks for ovine animals and for non-application of sanctions in case of late tagging of bovines |
0.098 |
0.098 |
|
Area aid – correction proposed for deficiencies in calculation of entitlements |
0.188 |
0.188 |
|
Slovakia |
||
|
Cross-compliance – correction proposed for undefined GAEC and weaknesses in on-the-spot controls |
1.558 |
1.558 |
|
Late payments – correction proposed for late payments |
0.346 |
0.000 |
|
TOTAL |
414.327 |
393.050 |
Annex II : Clearance of accounts of EAGF and EAFRD
Decision 40: Corrections by Sector (In Million )
|
Sector |
Amount of correction |
Amount of financial impact of the correction(4) |
||
|
|
|
|
||
|
Export refunds |
40,596 |
40,596 |
||
|
|
||||
|
Fruit and Vegetables |
18,575 |
18,573 |
||
|
|
||||
|
Intervention storage and other market measures |
0,428 |
0,428 |
||
|
|
||||
|
Livestock premiums |
8,259 |
8,249 |
||
|
Area aid |
145,583 |
131,380 |
||
|
Cross-compliance |
78,750 |
78,470 |
||
|
Rural development |
105,307 |
103,023 |
||
|
Late payments |
1,814 |
0,000 |
||
|
|
||||
|
Other corrections |
15,015 |
12,331 |
||
|
|
|
|
||
|
TOTAL |
414,327 |
393,050 |
||
Notes
1: The financial impact is lower due to amounts already recovered from or paid back by the Member State.
2: The financial impact is lower due to amounts already recovered from or paid back by the Member State.
3: The net financial impact of the correction is taking into account the previous overlapping corrections and amounts already recovered by the European Commission
4: Financial impact of the correction is taking into account the previous overlapping corrections and amounts already recovered by the European Commission
