EUROPEAN COMMISSION - PRESS RELEASE Commission to recover 54.3 million of CAP expenditure from the Member States Brussels, 16 February 2012 A total of 115.2 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. As some of these amounts have already been recovered from the Member States, the financial impact is somewhat lower at 54.3 million. This money returns to the EU budget because of non-compliance with EU rules or inadequate control procedures on agricultural expenditure. 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. Main financial corrections Under this latest decision, funds will be recovered from Belgium, the Czech Republic, Denmark, Germany, Estonia, Ireland, Greece, Spain, France, Italy, Cyprus, Lithuania, Hungary, Malta, the Netherlands, Poland, Portugal, Finland, Sweden and the United Kingdom. The most significant individual corrections are: - 29.8 million (financial impact*: 29.5 million) charged to UK for weaknesses in their sanctioning system and for inadequately implemented Statutory Management Requirements (SMRs) and Good Agricultural and Environment Conditions (GAEC) with regard to cross-compliance; - 27.3 million (financial impact*: 0) charged to Italy with regard to late payments to farmers; - 21.5 million charged to Italy for the weaknesses in the controls of mills and compatibility of yields for olive oil; - 14.6 million (financial impact * : 14.5 million) charged to the Netherlands for a deficient sanctioning system and lack of control of certain Statutory Management Requirements (SMRs) and Good Agricultural and Environment Conditions (GAEC) with regard to cross-compliance. Member States are responsible for managing most CAP payments, mainly via their paying agencies. They are also in charge of controls, for example verifying the 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, and has the power to claw back funds in arrears if the audits show that Member State responses are not good enough to guarantee that EU funds have been spent properly. * The financial impact is lower due to amounts already withheld; IP/12/142
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). Annex I : Clearance of accounts of EAGF and EAFRD Decision 37: Corrections by Member state (In Million ) Belgium Sector and reason for correction Rural Development - correction proposed for financial years 2008-2010 with regard to deficiencies in controls of Agri-environment and Natural Handicaps measures Late Payments - correction proposed for financial year 2009 with regard and for ineligible expenditure Cyprus Cross-compliance - correction proposed for financial years 2006-2009 for non-defined Good Agricultural and Environment Conditions and for on-the-spot control weaknesses the financial year 2010 Czech Republic the financial year 2010 Denmark the financial year 2010 Estonia Finland Rural Development - correction proposed for financial years 2007-2008 with regard to ineligible expenditure Amount of correction Amount of financial impact of the correction * 2.762 2.762 0.370 0 0.118 0.103 0.024 0 0.011 0 0.001 0 0.010 0 0.045 0.045 0.011 0 France * Financial impact of the correction is taking into account the previous overlapping corrections and amounts already recovered by the European Commission 2
Rural Development - correction proposed for financial years 2007-2009 with regard to weaknesses in controls of the following measures: Modernisation of agricultural holdings, Conservation and upgrading of the rural heritage Correction proposed with regard to most likely error and known error in the framework of financial clearance 2008 Germany to the reduction in accordance with the financial clearance decision Other corrections - correction proposed for the total error exceeding the level of materiality in the EAGF Annex III population in the framework of financial clearance 2008 Greece Late payments - correction proposed for financial year 2009 with regard to the non-compliance with payment deadlines and overshooting of financial ceilings the financial year 2009 Judgement of Court of Justice in case T-344/05 - the Court partially annulled decision 2055/555/EC by its judgment of 9 September 2011 Hungary Area Aid - correction proposed for deficiencies in LPIS-GIS in respect of financial years 2007-2008 and weaknesses related to administrative cross-checks and on-the-spot checks Ireland Intervention storage - correction proposed for financial years 2005-2006 for not meeting the regulatory minimum control level in the public storage of sugar and cereals Rural Development - correction proposed for financial years 2002-2005 with regard to the misapplication of agricultural funds Late Payments - correction proposed for financial year 2010 due Italy Olive oil and other oils and fats - correction proposed for weaknesses in the controls of mills and compatibility of yields in respect of financial years 2005-2006 Late payments - correction proposed for financial year 2007 with regard reimbursement of 34.531 0.764 0.764 0.046 0.046 7.108 0 0.036 0.036 8.672 reimbursement of 0.142 0.190 0.190 reimbursement of 34.531 5.243 5.243 0.022 0 0.004 0.004 0.137 0.137 0.095 0 21.456 21.456 27.293 0 Late payments - correction proposed for financial year 2009 with regard, overshooting of financial ceilings and temporary sugar restructuring 8.483 0 Lithuania 3
Area Aid - correction proposed for financial years 2006-2008 with regard to weaknesses in the LPIS-GIS, ineffectiveness of the risk analysis and timing of on-the-spot checks, including area-based Rural Development measures 8.563 8.563 Malta Cross-compliance - correction proposed for financial years 2006 and 2007 with regard to Statutory Management Requirements 7-8 for non-achievement of the minimum control rate and for ineffective checking of Good Agricultural and Environment Conditions The Netherlands Livestock premiums - correction proposed for financial years 2007-2008 with regard to non application of sanctions in the case of potentially eligible animals Cross-compliance - correction proposed for financial years 2006-2009 with regard to the deficient sanctioning system, lack of control of certain Statutory Management Requirements and Good Agricultural and Environment Conditions Rural Development - correction proposed for financial years 2007-2009 with regard to deficiencies in administrative checks of livestock density for Agri-Environment commitments, verification of Agri-Environment commitments & amount of fertilizers, notifications in advance of on-the-spot checks, traceability of onthe-spot check measurement and checks on livestock density and weaknesses in the sanction system Poland Financial clearance 2008: correction proposed with regard to nonrefunded recoveries in the EAGF population Portugal Fruits & Vegetables - correction proposed for financial year 2006-2008 for deficiencies in the environmental management of packaging and incorrect calculation of the value of the market production Spain Fruits & Vegetables - correction proposed for financial years 2006-2007 with regard to interest incorrectly charged to the EU budget following non-respect of payment deadlines to exceeding of the financial ceiling, late payments and recovery of milk levy Financial correction proposed for Systematic errors discovered in the EAGF non-iacs population in the framework of financial clearance 2007 Correction proposed for material and known errors in the accounts and/or debtors in the framework of financial clearance 2008 Correction proposed for overshooting of the financial ceiling and ineligible expenditure for financial year 2008 0.001 0.001 1.548 1.548 14.598 14.485 2.040 2.018 0.281 0.281 0.038 0.038 0.378 0.378 6.576 0 0.126 0.126 0.028 0.028 0.933 0.933 4
Sweden Livestock premiums - correction proposed for financial years 2007-2008 with regard to non application of sanctions regarding potentially eligible bovine animals and exceeding of the financial ceiling The United Kingdom Cross-compliance - correction proposed for financial years 2007-2010 with regard to weaknesses in the sanctioning system and for inadequately implemented Statutory Management Requirements and Good Agricultural and Environment Conditions Rural Development - correction proposed for financial year 2008-2010 with regard to weaknesses in the verification of the reasonableness of the cost and exceeding of the financial ceiling 0.108 0.108 0.044 0 29.846 29.547 0.250 0.157 1.466 0 TOTAL 115.222 54.324 5
Annex II : Clearance of accounts of EAGF and EAFRD Decision 37: Corrections by Sector (In Million ) Sector Amount of correction Amount of financial impact of the correction * Fruit & vegetables 0.416 0.416 Intervention storage 0.004 0.004 Livestock premiums (including a reimbursement following the judgement of the Court of Justice in case T-344/05) -32.875-32.875 Area Aid 13.807 13.807 Cross-compliance 44.563 44.136 Olive oil and other oils and fats 21.456 21.456 Rural Development 5.997 5.883 Late payments 60.151-0.142 Other corrections 1.676 1.639 TOTAL 115.222 54.324 Contact : Roger Waite (+32 2 296 14 04) * Financial impact of the correction is taking into account the previous overlapping corrections and amounts already recovered by the European Commission 6