# L_2006124EN.01002101.xml

| 11.5.2006 | EN | Official Journal of the European Union | L 124/21 |
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11.5.2006

EN

Official Journal of the European Union

L 124/21

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COMMISSION DECISION

of 28 April 2006

excluding from Community financing certain expenditure incurred by the Member States under the Guarantee Section of the European Agricultural Guidance and Guarantee Fund (EAGGF)

(notified under document number C(2006) 1702)

(Only the Spanish, German, Greek, English, French, Italian, Dutch, Portuguese, Finnish and Swedish texts are authentic)

(2006/334/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Community,

Having regard to Council Regulation (EEC) No 729/70 of 21 April 1970 on the financing of the common agricultural policy (1), and in particular Article 5(2)(c) thereof,

Having regard to Council Regulation (EC) No 1258/1999 of 17 May 1999 on the financing of the common agricultural policy (2), and in particular Article 7(4) thereof,

Having consulted the Fund Committee,

Whereas:

| (1) | Article 5 of Regulation (EEC) No 729/70, Article 7 of Regulation (EC) No 1258/1999, and Article 8(1) and (2) of Commission Regulation (EC) No 1663/95 of 7 July 1995 laying down detailed rules for the application of Council Regulation (EEC) No 729/70 regarding the procedure for the clearance of the accounts of the EAGGF Guarantee Section (3) provide that the Commission is to make the necessary verifications, inform the Member States of its findings, take account of the Member States' comments, initiate bilateral discussions with a view to reaching agreement with the Member States concerned and then formally communicate its conclusions to them, referring to Commission Decision 94/442/EC of 1 July 1994 setting up a conciliation procedure in the context of the clearance of the accounts of the European Agricultural Guidance and Guarantee Fund (EAGGF) Guarantee Section (4). |
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(1)

Article 5 of Regulation (EEC) No 729/70, Article 7 of Regulation (EC) No 1258/1999, and Article 8(1) and (2) of Commission Regulation (EC) No 1663/95 of 7 July 1995 laying down detailed rules for the application of Council Regulation (EEC) No 729/70 regarding the procedure for the clearance of the accounts of the EAGGF Guarantee Section (3) provide that the Commission is to make the necessary verifications, inform the Member States of its findings, take account of the Member States' comments, initiate bilateral discussions with a view to reaching agreement with the Member States concerned and then formally communicate its conclusions to them, referring to Commission Decision 94/442/EC of 1 July 1994 setting up a conciliation procedure in the context of the clearance of the accounts of the European Agricultural Guidance and Guarantee Fund (EAGGF) Guarantee Section (4).

| (2) | The Member States have had an opportunity to request that a conciliation procedure be initiated. That opportunity has been used in some cases and the report issued on the outcome has been examined by the Commission. |
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(2)

The Member States have had an opportunity to request that a conciliation procedure be initiated. That opportunity has been used in some cases and the report issued on the outcome has been examined by the Commission.

| (3) | Pursuant to Articles 2 and 3 of Regulation (EEC) No 729/70 and Article 2 of Regulation (EC) No 1258/1999, only refunds on exports to third countries and intervention to stabilise agricultural markets, granted and undertaken respectively according to Community rules within the framework of the common organisation of the agricultural markets, may be financed. |
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(3)

Pursuant to Articles 2 and 3 of Regulation (EEC) No 729/70 and Article 2 of Regulation (EC) No 1258/1999, only refunds on exports to third countries and intervention to stabilise agricultural markets, granted and undertaken respectively according to Community rules within the framework of the common organisation of the agricultural markets, may be financed.

| (4) | In the light of the checks carried out, the outcome of the bilateral discussions and the conciliation procedures, part of the expenditure declared by the Member States does not fulfil these requirements and cannot, therefore, be financed under the EAGGF Guarantee Section. |
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(4)

In the light of the checks carried out, the outcome of the bilateral discussions and the conciliation procedures, part of the expenditure declared by the Member States does not fulfil these requirements and cannot, therefore, be financed under the EAGGF Guarantee Section.

| (5) | The amounts that are not recognised as being chargeable to the EAGGF Guarantee Section should be indicated. Those amounts do not relate to expenditure incurred more than twenty-four months before the Commission's written notification of the results of the checks to the Member States. |
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(5)

The amounts that are not recognised as being chargeable to the EAGGF Guarantee Section should be indicated. Those amounts do not relate to expenditure incurred more than twenty-four months before the Commission's written notification of the results of the checks to the Member States.

| (6) | As regards the cases covered by this Decision, the assessment of the amounts to be excluded on grounds of non-compliance with Community rules was notified by the Commission to the Member States in a summary report on the subject. |
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(6)

As regards the cases covered by this Decision, the assessment of the amounts to be excluded on grounds of non-compliance with Community rules was notified by the Commission to the Member States in a summary report on the subject.

| (7) | This Decision is without prejudice to any financial conclusions that the Commission may draw from the judgements of the Court of Justice in cases pending on 25 November 2005 and relating to its content, |
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(7)

This Decision is without prejudice to any financial conclusions that the Commission may draw from the judgements of the Court of Justice in cases pending on 25 November 2005 and relating to its content,

HAS ADOPTED THIS DECISION:

Article 1

The expenditure itemised in the Annex hereto that has been incurred by the Member States' accredited paying agencies and declared under the EAGGF Guarantee Section shall be excluded from Community financing because it does not comply with Community rules.

Article 2

This Decision is addressed to the Kingdom of Belgium, the Federal Republic of Germany, the Kingdom of Spain, the French Republic, the Hellenic Republic, the Italian Republic, the Kingdom of the Netherlands, the Portuguese Republic, the Republic of Finland, the Kingdom of Sweden and the United Kingdom of Great Britain and Northern Ireland.

Done at Brussels, 28 April 2006.

For the Commission

Mariann FISCHER BOEL

Member of the Commission

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(1)  
  OJ L 94, 28.4.1970, p. 13. Regulation as last amended by Commission Regulation (EC) No 1287/95 (OJ L 125, 8.6.1995, p. 1).

1

(2)  
  OJ L 160, 26.6.1999, p. 103.

2

(3)  
  OJ L 158, 8.7.1995, p. 6. Regulation as last amended by Regulation (EC) No 465/2005 (OJ L 77, 23.3.2005, p. 6).

3

(4)  
  OJ L 182, 16.7.1994, p. 45. Decision as last amended by Decision 2001/535/EC (OJ L 193, 17.7.2001, p. 25).

4

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ANNEX

Total corrections

| Sector | Member State | Budget item | Reason | Nat. Currency | Expenditure to exclude from financing | Deductions already made | Financial impact of this decision | Financial year |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Milk and milk products | BE | 2040 | Control deficiencies: 5 % flat-rate correction. Incorrect treatment of result of physical checks: one-off correction | EUR | –5 851 253,86 | 0,00 | –5 851 253,86 | 2001-2003 |
| | Total BE | | | | –5 851 253,86 | 0,00 | –5 851 253,86 | |
| Milk and milk products | DE | 2040 | Non-compliance with the requirement to perform unannounced checks. 10 % flat-rate correction (1 operator) | EUR | – 396 063,56 | 0,00 | – 396 063,56 | 2002-2004 |
| | Total DE | | | | – 396 063,56 | 0,00 | – 396 063,56 | |
| Fruit and vegetables | GR | 1515 | Partial annulment of Commission Decision 2002/881/EC, amount to be reimbursed to Greece. | EUR | 623 385,74 | 0,00 | 623 385,74 | 1998-2000 |
| Public storage | GR | 3231 | Partial annulment of Commission Decision 2003/102/EC, amount to be reimbursed to Greece. | EUR | 9 926 005,21 | 0,00 | 9 926 005,21 | 1999-2001 |
| Irregularities | GR | Miscellaneous | Partial annulment of Commission Decision 2003/481/EC, amount to be reimbursed to Greece. | EUR | 41 884,90 | 0,00 | 41 884,90 | |
| | Total GR | | | | 10 591 275,85 | 0,00 | 10 591 275,85 | |
| Public storage | ES | 2111, 2112, 2113, 2114 | Control deficiencies: 5 % flat-rate correction | EUR | –2 763 696,91 | 0,00 | –2 763 696,91 | 2001-2003 |
| Animal premiums | ES | 2220, 2221, 2222 | Premium paid to farmers not having the minimum quota rights. One-off correction | EUR | –78 720,15 | 0,00 | –78 720,15 | 2003-2004 |
| Rural development | ES | 4000, 4010 | Various shortcomings in the management and control system. 5 % flat-rate correction | EUR | – 135 394,00 | 0,00 | – 135 394,00 | 2002-2003 |
| Financial audit | ES | Miscellaneous | Partial annulment of Commission Decision 2002/461/EC, amount to be reimbursed to Spain. | EUR | 451 482,55 | 0,00 | 451 482,55 | 2001 |
| | Total ES | | | | –2 526 328,51 | 0,00 | –2 526 328,51 | |
| Milk and milk products | FI | 2040 | Control w eakness. 5 % flat-rate correction (1 operator) | EUR | –65 903,93 | 0,00 | –65 903,93 | 2002-2003 |
| Ceiling overshoot | FI | 2128 | Overshoot of financial ceilings | EUR | –6 820,82 | –6 820,82 | 0,00 | 2003 |
| | Total FI | | | | –72 724,75 | –6 820,82 | –65 903,93 | |
| Fruit and vegetables | FR | 1508 | Aid over-estimated (calculated on the basis of quantities loaded rather quantities marketed), non-application of sanction in respect of claim submitted after the deadline: one-off correction. Non-performance of several key controls: 10 % flat-rate correction | EUR | –32 072 056,72 | 0,00 | –32 072 056,72 | 2002-2004 |
| Public storage | FR | 2111, 2112, 2113, 2114 | Control deficiencies: 5% flat-rate correction. Payment delays: one-off correction | EUR | –7 135 187,50 | 0,00 | –7 135 187,50 | 2001-2003 |
| Rural development | FR | 4040 | Incorrect application of a procedure for verifying one of the conditions of eligibility. One-off correction | EUR | – 870 374,00 | 0,00 | – 870 374,00 | 2002 |
| | Total FR | | | | –40 077 618,22 | 0,00 | –40 077 618,22 | |
| Fruit and vegetables | IT | 1501, 1502, 1515 | Non-application of sanctions, deficiencies in controls on composting and bio-degradation. 10 % flat-rate correction and one-off correction | EUR | –30 021 060,00 | 0,00 | –30 021 060,00 | 1999-2002 |
| Fruit and vegetables | IT | 1512 | Non-compliance with payment deadlines. One-off correction | EUR | –4 414 265,04 | 0,00 | –4 414 265,04 | 2002 |
| Fruit and vegetables | IT | 1502 | Key controls are not applied in the number, frequency, or depth required by the regulations. 5 % flat-rate correction | EUR | –7 708 059,40 | 0,00 | –7 708 059,40 | 2000-2003 |
| Milk and milk products | IT | 2040 | Non-compliance with the regulations: one-off correction. Control deficiencies: 5 % flat-rate correction. Non-compliance with minimum rate of control: 10 % flat-rate | EUR | – 297 002,44 | 0,00 | – 297 002,44 | 2002-2004 |
| Arable crops | IT | 1040-1062, 1310, 1858 | Failure to apply sanctions. 3 % flat-rate correction | EUR | –7 975 231,00 | 0,00 | –7 975 231,00 | 2002 |
| Arable crops | IT | 1040-1060, 1310, 1858 | Poor quality of classical field inspections. 5 % flat-rate correction | EUR | – 603 692,00 | –36 829,00 | – 566 863,00 | 2001-2003 |
| Rural development | IT | 4000, 4010, 4040 | Weaknesses in the management, control and sanctions system. 2 % flat-rate correction | EUR | –3 748 761,00 | 0,00 | –3 748 761,00 | 2001-2002 |
| Payment deadline | IT | Miscellaneous | Failure to meet payment deadlines | EUR | –30 938 245,66 | –31 631 666,68 | 693 421,02 | 2003 |
| | Total IT | | | | –85 706 316,54 | –31 668 495,68 | –54 037 820,86 | |
| Milk and milk products | NL | 2040 | Unsatisfactory sampling procedure: 10 % flat-rate correction (1 operator). Incorrect treatment of result of physical checks: one-off correction | EUR | – 158 235,60 | 0,00 | – 158 235,60 | 2002-2003 |
| | Total NL | | | | – 158 235,60 | 0,00 | – 158 235,60 | |
| Fat | PT | 1400, 1402 | The control system put in place w as not adequate to prevent irregular practices on the part of all the actors concerned in the flax sector. 100 % financial correction | EUR | –3 135 348,71 | 0,00 | –3 135 348,71 | 2001 |
| | Total PT | | | | –3 135 348,71 | 0,00 | –3 135 348,71 | |
| Arable crops | SE | 1040, 1062, 1310 | Shortcomings in the application of the rules regarding set-aside, incorrect application of technical tolerances, obvious errors applied over-generously. One-off correction. | SEK | –1 308 192,00 | 0,00 | –1 308 192,00 | 2001-2002 |
| | Total SE | | | | –1 308 192,00 | 0,00 | –1 308 192,00 | |
| Financial audit | UK | Miscellaneous | Unidentified corrections to be credited to EAGGF. One-off correction | GBP | – 497 130,69 | 0,00 | – 497 130,69 | 2004 |
| | Total UK | | | | – 497 130,69 | 0,00 | – 497 130,69 | |

Sector

Member State

Budget item

Reason

Nat. Currency

Expenditure to exclude from financing

Deductions already made

Financial impact of this decision

Financial year

Milk and milk products

BE

2040

Control deficiencies: 5 % flat-rate correction. Incorrect treatment of result of physical checks: one-off correction

EUR

–5 851 253,86

0,00

–5 851 253,86

2001-2003

Total BE

–5 851 253,86

0,00

–5 851 253,86

Milk and milk products

DE

2040

Non-compliance with the requirement to perform unannounced checks. 10 % flat-rate correction (1 operator)

EUR

– 396 063,56

0,00

– 396 063,56

2002-2004

Total DE

– 396 063,56

0,00

– 396 063,56

Fruit and vegetables

GR

1515

Partial annulment of Commission Decision 2002/881/EC, amount to be reimbursed to Greece.

EUR

623 385,74

0,00

623 385,74

1998-2000

Public storage

GR

3231

Partial annulment of Commission Decision 2003/102/EC, amount to be reimbursed to Greece.

EUR

9 926 005,21

0,00

9 926 005,21

1999-2001

Irregularities

GR

Miscellaneous

Partial annulment of Commission Decision 2003/481/EC, amount to be reimbursed to Greece.

EUR

41 884,90

0,00

41 884,90

Total GR

10 591 275,85

0,00

10 591 275,85

Public storage

ES

2111, 2112, 2113, 2114

Control deficiencies: 5 % flat-rate correction

EUR

–2 763 696,91

0,00

–2 763 696,91

2001-2003

Animal premiums

ES

2220, 2221, 2222

Premium paid to farmers not having the minimum quota rights. One-off correction

EUR

–78 720,15

0,00

–78 720,15

2003-2004

Rural development

ES

4000, 4010

Various shortcomings in the management and control system. 5 % flat-rate correction

EUR

– 135 394,00

0,00

– 135 394,00

2002-2003

Financial audit

ES

Miscellaneous

Partial annulment of Commission Decision 2002/461/EC, amount to be reimbursed to Spain.

EUR

451 482,55

0,00

451 482,55

2001

Total ES

–2 526 328,51

0,00

–2 526 328,51

Milk and milk products

FI

2040

Control w eakness. 5 % flat-rate correction (1 operator)

EUR

–65 903,93

0,00

–65 903,93

2002-2003

Ceiling overshoot

FI

2128

Overshoot of financial ceilings

EUR

–6 820,82

–6 820,82

0,00

2003

Total FI

–72 724,75

–6 820,82

–65 903,93

Fruit and vegetables

FR

1508

Aid over-estimated (calculated on the basis of quantities loaded rather quantities marketed), non-application of sanction in respect of claim submitted after the deadline: one-off correction. Non-performance of several key controls: 10 % flat-rate correction

EUR

–32 072 056,72

0,00

–32 072 056,72

2002-2004

Public storage

FR

2111, 2112, 2113, 2114

Control deficiencies: 5% flat-rate correction. Payment delays: one-off correction

EUR

–7 135 187,50

0,00

–7 135 187,50

2001-2003

Rural development

FR

4040

Incorrect application of a procedure for verifying one of the conditions of eligibility. One-off correction

EUR

– 870 374,00

0,00

– 870 374,00

2002

Total FR

–40 077 618,22

0,00

–40 077 618,22

Fruit and vegetables

IT

1501, 1502, 1515

Non-application of sanctions, deficiencies in controls on composting and bio-degradation. 10 % flat-rate correction and one-off correction

EUR

–30 021 060,00

0,00

–30 021 060,00

1999-2002

Fruit and vegetables

IT

1512

Non-compliance with payment deadlines. One-off correction

EUR

–4 414 265,04

0,00

–4 414 265,04

2002

Fruit and vegetables

IT

1502

Key controls are not applied in the number, frequency, or depth required by the regulations. 5 % flat-rate correction

EUR

–7 708 059,40

0,00

–7 708 059,40

2000-2003

Milk and milk products

IT

2040

Non-compliance with the regulations: one-off correction. Control deficiencies: 5 % flat-rate correction. Non-compliance with minimum rate of control: 10 % flat-rate

EUR

– 297 002,44

0,00

– 297 002,44

2002-2004

Arable crops

IT

1040-1062, 1310, 1858

Failure to apply sanctions. 3 % flat-rate correction

EUR

–7 975 231,00

0,00

–7 975 231,00

2002

Arable crops

IT

1040-1060, 1310, 1858

Poor quality of classical field inspections. 5 % flat-rate correction

EUR

– 603 692,00

–36 829,00

– 566 863,00

2001-2003

Rural development

IT

4000, 4010, 4040

Weaknesses in the management, control and sanctions system. 2 % flat-rate correction

EUR

–3 748 761,00

0,00

–3 748 761,00

2001-2002

Payment deadline

IT

Miscellaneous

Failure to meet payment deadlines

EUR

–30 938 245,66

–31 631 666,68

693 421,02

2003

Total IT

–85 706 316,54

–31 668 495,68

–54 037 820,86

Milk and milk products

NL

2040

Unsatisfactory sampling procedure: 10 % flat-rate correction (1 operator). Incorrect treatment of result of physical checks: one-off correction

EUR

– 158 235,60

0,00

– 158 235,60

2002-2003

Total NL

– 158 235,60

0,00

– 158 235,60

Fat

PT

1400, 1402

The control system put in place w as not adequate to prevent irregular practices on the part of all the actors concerned in the flax sector. 100 % financial correction

EUR

–3 135 348,71

0,00

–3 135 348,71

2001

Total PT

–3 135 348,71

0,00

–3 135 348,71

Arable crops

SE

1040, 1062, 1310

Shortcomings in the application of the rules regarding set-aside, incorrect application of technical tolerances, obvious errors applied over-generously. One-off correction.

SEK

–1 308 192,00

0,00

–1 308 192,00

2001-2002

Total SE

–1 308 192,00

0,00

–1 308 192,00

Financial audit

UK

Miscellaneous

Unidentified corrections to be credited to EAGGF. One-off correction

GBP

– 497 130,69

0,00

– 497 130,69

2004

Total UK

– 497 130,69

0,00

– 497 130,69

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