# L_2006218EN.01001201.xml

| 9.8.2006 | EN | Official Journal of the European Union | L 218/12 |
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9.8.2006

EN

Official Journal of the European Union

L 218/12

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COMMISSION DECISION

of 27 July 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) 3331)

(Only the Spanish, Greek, English, French, Italian and Portuguese texts are authentic)

(2006/554/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) | Under 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)

Under 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 judgments of the Court of Justice in cases pending on 5 April 2006 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 judgments of the Court of Justice in cases pending on 5 April 2006 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 Hellenic Republic, the Kingdom of Spain, the French Republic, Ireland, the Italian Republic, the Portuguese Republic and the United Kingdom of Great Britain and Northern Ireland.

Done at Brussels, 27 July 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

| Member State | Audit Field | Reason | Correction | Currency | Expenditure to exclude from financing | Deductions already made | Financial impact of this decision | Financial year |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| ES | Arable crops | Absence of a computerised LPIS | flat-rate 2 % | EUR | –43 299,48 | 0,00 | –43 299,48 | 1999-2000 |
| ES | Arable crops | Deficient aid application procedure | flat-rate 5 % | EUR | –2 024 643,26 | 0,00 | –2 024 643,26 | 2002-2004 |
| ES | Arable crops | Non-application of penalties | flat-rate 2 % | EUR | – 316 545,67 | 0,00 | – 316 545,67 | 2003-2004 |
| ES | Animal premiums — OTMS | Animals subject of financing for both purchase and destruction | one-off | EUR | – 156 180,00 | 0,00 | – 156 180,00 | 2002 |
| ES | Animal premiums — OTMS | Non-reliable administrative and accounting system to monitor and account for animals | flat-rate 10 % | EUR | – 160 692,00 | 0,00 | – 160 692,00 | 2001 |
| ES | Butterfats in food processing | Overtracing — aid paid for part of tracers added | one-off 1,5 % | EUR | – 144 902,68 | 0,00 | – 144 902,68 | 2002-2005 |
| ES | Fruit and Veg — Bananas | Weaknesses in the determination of marketed quantities, non-representative sampling in quality controls | flat-rate 2 % | EUR | –5 291 087,63 | 0,00 | –5 291 087,63 | 2002-2004 |
| ES | Fruit and Veg — processing of peaches & pears | Non-compliance with payment deadlines | one-off | EUR | – 643 142,42 | 0,00 | – 643 142,42 | 2002 |
| ES | POSEI | Non-compliance with key controls | flat-rate 5 % | EUR | – 415 161,50 | 0,00 | – 415 161,50 | 2003-2004 |
| ES | POSEI | Non-compliance with payment deadlines | one-off | EUR | –3 931 651,61 | 0,00 | –3 931 651,61 | 2003-2004 |
| ES | Wine — production potential | Deficiencies in managing production potential | flat-rate 10 % | EUR | –33 357 596,61 | 0,00 | –33 357 596,61 | 2001-2004 |
| Total ES | | | | | –46 484 902,86 | 0,00 | –46 484 902,86 | |
| FR | Arable crops | Application of the rate of irrigation in wet regions | one-off | EUR | –7 874 178,00 | 0,00 | –7 874 178,00 | 2001-2003 |
| FR | Arable crops | Parcels not eligible for aid after grubbing of vines | one-off | EUR | –36 610 625,00 | 0,00 | –36 610 625,00 | 2001-2005 |
| FR | Arable crops | Meadows turned over in wet regions | one-off | EUR | –12 521 275,00 | 0,00 | –12 521 275,00 | 2001-2005 |
| FR | Arable crops | Penalties for aid paid unduly | one-off | EUR | –20 128 846,00 | 0,00 | –20 128 846,00 | 2001-2005 |
| FR | Olive oil — Production aid | Key controls not applied with sufficient rigour | flat-rate 2 % | EUR | – 156 181,66 | 0,00 | – 156 181,66 | 2002-2004 |
| FR | Rural Development Guarantee new measures | Weakenesses in key and secondary controls | flat-rate 5 % | EUR | –4 349 136,00 | 0,00 | –4 349 136,00 | 2001-2002 |
| FR | Rural Development Guarantee new measures | Weaknesses in controls on reduced-interest loans | flat-rate 5 % | EUR | –4 331 384,00 | 0,00 | –4 331 384,00 | 2001-2002 |
| Total FR | | | | | –85 971 625,66 | 0,00 | –85 971 625,66 | |
| UK | Butterfats in food processing | Insufficient quantity controls on manufactured quantities | flat-rate 5 % | GBP | –1 351 441,25 | 0,00 | –1 351 441,25 | 2001-2004 |
| UK | Butterfats in food processing | Overtracing — aid paid for part of tracers added | one-off | GBP | –55 534,20 | 0,00 | –55 534,20 | 2002-2004 |
| UK | Export refunds and food aid outside the EU | Deficiency in the scheduling regime | flat-rate 2 % | GBP | – 250 887,47 | 0,00 | – 250 887,47 | 2001-2003 |
| UK | Export refunds and food aid outside the EU | Failure to carry out the required number of substitution controls | flat-rate 5 % | GBP | –7 314,57 | 0,00 | –7 314,57 | 2000-2001 |
| Total UK | | | | | –1 665 177,49 | 0,00 | –1 665 177,49 | |
| GR | RD Guarantee accompanying maeasures | Key controls inadequately applied | flat-rate 5 % | EUR | –1 795 865,00 | 0,00 | –1 795 865,00 | 2004 |
| GR | RD Guarantee accompanying measures | Key controls inadequately applied | flat-rate 10 % | EUR | –6 271 694,00 | 0,00 | –6 271 694,00 | 2002-2003 |
| GR | RD Guarantee accompanying measures | Various weaknesses in the system for management, control and penalties | flat-rate 5 % | EUR | –6 460 070,00 | 0,00 | –6 460 070,00 | 2004 |
| Total EL | | | | | –14 527 629,00 | 0,00 | –14 527 629,00 | |
| IE | Animal premiums — OTMS | Administrative deficiencies | flat-rate 2 % | EUR | – 170 297,64 | 0,00 | – 170 297,64 | 2001-2003 |
| Total IE | | | | | – 170 297,64 | 0,00 | – 170 297,64 | |
| IT | Fruit and vegtable — Withdrawals | Inadequate rate of controls on composting and bio-degradation | one-off 100 % | EUR | –9 107 445,49 | 0,00 | –9 107 445,49 | 2000-2002 |
| IT | Fruit and vegtable — Withdrawals | Several weaknesses in the system of checks as instituted | flat-rate 5 % | EUR | – 304 839,45 | 0,00 | – 304 839,45 | 2001-2003 |
| IT | Public storage of meat | Late payments | one-off | EUR | –4 575,54 | 0,00 | –4 575,54 | 2001 |
| IT | Public storage of meat | Presence of specified risk material, removal of neck muscle, acceptance of ineligible carcases, poor storage conditions, labelling failings, reporting failings and inspection weaknesses | flat-rate 5 % | EUR | –2 635 067,09 | 0,00 | –2 635 067,09 | 2001-2003 |
| Total IT | | | | | –12 051 927,57 | 0,00 | –12 051 927,57 | |
| PT | Fruit and vegetable — Bananas | Deficiencies in the system for checking quantities eligible for aid and in the system for checking full payment of aid to beneficiaries, lack of oversight over delegated checks | flat-rate 2 % | EUR | – 257 901,65 | 0,00 | – 257 901,65 | 2002-2004 |
| Total PT | | | | | – 257 901,65 | 0,00 | – 257 901,65 | |

Member State

Audit Field

Reason

Correction

Currency

Expenditure to exclude from financing

Deductions already made

Financial impact of this decision

Financial year

ES

Arable crops

Absence of a computerised LPIS

flat-rate 2 %

EUR

–43 299,48

0,00

–43 299,48

1999-2000

ES

Arable crops

Deficient aid application procedure

flat-rate 5 %

EUR

–2 024 643,26

0,00

–2 024 643,26

2002-2004

ES

Arable crops

Non-application of penalties

flat-rate 2 %

EUR

– 316 545,67

0,00

– 316 545,67

2003-2004

ES

Animal premiums — OTMS

Animals subject of financing for both purchase and destruction

one-off

EUR

– 156 180,00

0,00

– 156 180,00

2002

ES

Animal premiums — OTMS

Non-reliable administrative and accounting system to monitor and account for animals

flat-rate 10 %

EUR

– 160 692,00

0,00

– 160 692,00

2001

ES

Butterfats in food processing

Overtracing — aid paid for part of tracers added

one-off 1,5 %

EUR

– 144 902,68

0,00

– 144 902,68

2002-2005

ES

Fruit and Veg — Bananas

Weaknesses in the determination of marketed quantities, non-representative sampling in quality controls

flat-rate 2 %

EUR

–5 291 087,63

0,00

–5 291 087,63

2002-2004

ES

Fruit and Veg — processing of peaches & pears

Non-compliance with payment deadlines

one-off

EUR

– 643 142,42

0,00

– 643 142,42

2002

ES

POSEI

Non-compliance with key controls

flat-rate 5 %

EUR

– 415 161,50

0,00

– 415 161,50

2003-2004

ES

POSEI

Non-compliance with payment deadlines

one-off

EUR

–3 931 651,61

0,00

–3 931 651,61

2003-2004

ES

Wine — production potential

Deficiencies in managing production potential

flat-rate 10 %

EUR

–33 357 596,61

0,00

–33 357 596,61

2001-2004

Total ES

–46 484 902,86

0,00

–46 484 902,86

FR

Arable crops

Application of the rate of irrigation in wet regions

one-off

EUR

–7 874 178,00

0,00

–7 874 178,00

2001-2003

FR

Arable crops

Parcels not eligible for aid after grubbing of vines

one-off

EUR

–36 610 625,00

0,00

–36 610 625,00

2001-2005

FR

Arable crops

Meadows turned over in wet regions

one-off

EUR

–12 521 275,00

0,00

–12 521 275,00

2001-2005

FR

Arable crops

Penalties for aid paid unduly

one-off

EUR

–20 128 846,00

0,00

–20 128 846,00

2001-2005

FR

Olive oil — Production aid

Key controls not applied with sufficient rigour

flat-rate 2 %

EUR

– 156 181,66

0,00

– 156 181,66

2002-2004

FR

Rural Development Guarantee new measures

Weakenesses in key and secondary controls

flat-rate 5 %

EUR

–4 349 136,00

0,00

–4 349 136,00

2001-2002

FR

Rural Development Guarantee new measures

Weaknesses in controls on reduced-interest loans

flat-rate 5 %

EUR

–4 331 384,00

0,00

–4 331 384,00

2001-2002

Total FR

–85 971 625,66

0,00

–85 971 625,66

UK

Butterfats in food processing

Insufficient quantity controls on manufactured quantities

flat-rate 5 %

GBP

–1 351 441,25

0,00

–1 351 441,25

2001-2004

UK

Butterfats in food processing

Overtracing — aid paid for part of tracers added

one-off

GBP

–55 534,20

0,00

–55 534,20

2002-2004

UK

Export refunds and food aid outside the EU

Deficiency in the scheduling regime

flat-rate 2 %

GBP

– 250 887,47

0,00

– 250 887,47

2001-2003

UK

Export refunds and food aid outside the EU

Failure to carry out the required number of substitution controls

flat-rate 5 %

GBP

–7 314,57

0,00

–7 314,57

2000-2001

Total UK

–1 665 177,49

0,00

–1 665 177,49

GR

RD Guarantee accompanying maeasures

Key controls inadequately applied

flat-rate 5 %

EUR

–1 795 865,00

0,00

–1 795 865,00

2004

GR

RD Guarantee accompanying measures

Key controls inadequately applied

flat-rate 10 %

EUR

–6 271 694,00

0,00

–6 271 694,00

2002-2003

GR

RD Guarantee accompanying measures

Various weaknesses in the system for management, control and penalties

flat-rate 5 %

EUR

–6 460 070,00

0,00

–6 460 070,00

2004

Total EL

–14 527 629,00

0,00

–14 527 629,00

IE

Animal premiums — OTMS

Administrative deficiencies

flat-rate 2 %

EUR

– 170 297,64

0,00

– 170 297,64

2001-2003

Total IE

– 170 297,64

0,00

– 170 297,64

IT

Fruit and vegtable — Withdrawals

Inadequate rate of controls on composting and bio-degradation

one-off 100 %

EUR

–9 107 445,49

0,00

–9 107 445,49

2000-2002

IT

Fruit and vegtable — Withdrawals

Several weaknesses in the system of checks as instituted

flat-rate 5 %

EUR

– 304 839,45

0,00

– 304 839,45

2001-2003

IT

Public storage of meat

Late payments

one-off

EUR

–4 575,54

0,00

–4 575,54

2001

IT

Public storage of meat

Presence of specified risk material, removal of neck muscle, acceptance of ineligible carcases, poor storage conditions, labelling failings, reporting failings and inspection weaknesses

flat-rate 5 %

EUR

–2 635 067,09

0,00

–2 635 067,09

2001-2003

Total IT

–12 051 927,57

0,00

–12 051 927,57

PT

Fruit and vegetable — Bananas

Deficiencies in the system for checking quantities eligible for aid and in the system for checking full payment of aid to beneficiaries, lack of oversight over delegated checks

flat-rate 2 %

EUR

– 257 901,65

0,00

– 257 901,65

2002-2004

Total PT

– 257 901,65

0,00

– 257 901,65

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