Commission to recover €414 million of CAP expenditure from Member States

Brussels, 27-2-2013 — /europawire.eu/ — A total of €414 million of EU agricultural policy funds unduly spent by Member States is being claimed back by the European Commission today under the so-called 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 €393 million.

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 impact¹ : €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 impact² : €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.

For details on how the clearance of annual accounts system works, see MEMO/12/109 and the factsheet “Managing the agriculture budget wisely”, available on the internet at: http://ec.europa.eu/agriculture/fin/clearance/factsheet_en.pdf.

Details of the individual corrections, by Member State and by sector, are given in the tables attached (annexes I and II).

Contacts: Fanny Dabertrand (+32 2 299 06 25)

Roger Waite (+32 2 296 14 04)

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 correction³
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 correction⁴

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

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