Commission Regulation (EC) No 445/2002
of 26 February 2002
laying down detailed rules for the application of Council Regulation (EC) No 1257/1999 on support for rural development from the European Agricultural Guidance and Guarantee Fund (EAGGF)
THE COMMISSION OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European Community,
Having regard to Council Regulation (EC) No 1257/1999 of 17 May 1999 on support for rural development from the European Agricultural Guidance and Guarantee Fund (EAGGF) and amending and repealing certain Regulations(1), and in particular Articles 34, 45 and 50 thereof,
Whereas:
(1) Commission Regulation (EC) No 1750/1999 of 23 July 1999 laying down detailed rules for the application of Council Regulation (EC) No 1257/1999 on support for rural development from the European Agricultural Guidance and Guarantee Fund (EAGGF)(2), as last amended by Regulation (EC) No 1763/2001(3), has been substantially amended a number of times. Moreover, experience gained during the first two years of programming shows that further clarifications are needed, in particular as concerns the procedure for amending programming documents and the indicative overall financial table. In the interests of clarity and rationalisation, therefore, Regulation (EC) No 1750/1999 should be recast.
(2) Regulation (EC) No 1257/1999 established a single legal framework for EAGGF support for rural development. In particular, Title II thereof specifies the measures eligible for support, their objectives and the criteria for eligibility. This legal framework applies to support for rural development throughout the Community.
(3) Detailed rules should be adopted to supplement this framework, taking account of experience gained using the instruments applied under the various Council Regulations repealed by Article 55(1) of Regulation (EC) No 1257/1999. Those rules should follow the principles of subsidiarity and proportionality, and should therefore be restricted to what is necessary for the attainment of the aims being pursued.
(4) With respect to the eligibility criteria, Regulation (EC) No 1257/1999 lays down three basic conditions for support for investment in agricultural holdings and processing plants and support for young farmers. The time at which those conditions must be fulfilled should be specified, including, in the case of investment aid, the condition regarding demonstration of the economic viability of an agricultural holding, on the basis of an adequate assessment of the prospects of that holding. It can be very difficult for farms in rural areas facing very serious structural difficulties to meet these requirements. In the case of small investments, Member States should be allowed to grant farms a period of grace in which to meet these requirements.
(5) Community support for investments in holdings and processing plants is subject to the condition that normal market outlets can be found for the products concerned. Detailed rules should be laid down for assessing such market outlets.
(6) Support for vocational training should not cover normal agricultural and forestry education.
(7) As regards the conditions for early retirement support, specific problems arising where a holding is transferred by several transferors or by a tenant farmer should be solved.
(8) Compensatory allowances payable in less-favoured areas for land used jointly by several farmers should be paid to each farmer concerned in proportion to the degree to which the farmer is entitled to its use.
(9) Article 16 of Regulation (EC) No 1257/1999 provides that farmers may receive support to offset additional costs and loss of income if they farm in areas where environmental constraints mean that they are subject to environmental protection restrictions based on Community provisions. Council Directive 91/676/EEC of 12 December 1991 concerning the protection of waters against pollution caused by nitrates from agricultural sources(4) is intended to reduce the pollution of waters by nitrates from agriculture and to prevent it from spreading. In line with the "polluter pays" principle in Article 174(2) of the Treaty, there should be no compensation for the costs and income losses resulting from application of the restrictions imposed by that Directive, which should therefore be excluded from the scope of Article 16 of Regulation (EC) No 1257/1999.
(10) As regards agri-environment support, the minimum requirements to be met by farmers in connection with the various agri-environment commitments should ensure a balanced application of agri-environment support that takes account of its objectives and will thus contribute to sustainable rural development.
(11) The selection criteria for investments to improve the processing and marketing of agricultural products should be fixed. The experience gained shows that these selection criteria should be based on broad principles rather than sectoral rules.
(12) The outermost regions of the Community should be exempt, subject to certain conditions, from the second indent of Article 28(1) of Regulation (EC) No 1257/1999, under which no support may be granted for investments intended for the processing or marketing of products from third countries.
(13) The forests not eligible for support under Article 29(3) of Regulation (EC) No 1257/1999 should be defined in greater detail.
(14) Detailed conditions should be laid down for support for afforestation of agricultural land and payments for activities to maintain and improve the ecological stability of forests.
(15) Under Article 33 of Regulation (EC) No 1257/1999, support is granted for other measures relating to farming activities and their conversion and to rural activities that are not covered by any other rural development measure. Given the wide variety of measures which could be covered by this Article, it should be left primarily to the Member States to lay down the conditions for support as part of their programming.
(16) Rules common to several measures should be laid down to ensure, in particular, that common standards of good farming practice are applied where measures refer to that criterion, and to guarantee the flexibility needed for long-term commitments to take account of events which might affect those commitments without jeopardising the effective implementation of the various support measures.
(17) A clear dividing line should be drawn between financing rural development support and financing support under the common market organisations. Any exceptions to the principle that measures covered by support schemes under common market organisations should not be eligible for rural development support should be proposed by Member States in their rural development programming, according to their specific needs and following a transparent procedure.
(18) Rural development support payments should be made in full to the beneficiaries.
(19) Commission Regulation (EC) No 1685/2000(5) lays down detailed rules for implementing Council Regulation (EC) 1260/1999 of 21 June 1999 laying down general provisions on the Structural Funds(6), as amended by Regulation (EC) No 1447/2001(7), as regards eligibility of expenditure under operations part-financed by the Structural Funds, and hence by the EAGGF Guidance Section. In the interests of consistency, Regulation (EC) No 1685/2000 should also apply to measures part-financed by the EAGGF Guarantee Section, except where otherwise provided in Regulation (EC) No 1257/1999, in Council Regulation (EC) No 1258/1999 of 17 May 1999 on the financing of the common agricultural policy(8) or in this Regulation.
(20) Commission Decision 1999/659/EC of 8 September 1999 fixing an indicative allocation by Member States of the allocations under the European Agricultural Guidance and Guarantee Fund Guarantee Section for rural development measures for the period 2000 to 2006(9), as amended by Decision 2000/426/EC(10), specifies the type of expenditure covered by the allocations made to the Member States. Moreover, under Commission Regulation (EC) No 2603/1999 of 9 December 1999 laying down rules for the transition to the rural development support provided for by Council Regulation (EC) No 1257/1999(11), as last amended by Regulation (EC) No 2055/2001(12), payments arising from certain commitments made before 1 January 2000 may be included in the rural development programming for 2000-2006, subject to certain conditions. It is therefore necessary to specify what is included in the overall amount of Community support fixed for each rural development plan under the single programming document approved by the Commission.
(21) Article 5 of Council Regulation (EC) No 1259/1999 of 17 May 1999 establishing common rules for direct support schemes under the common agricultural policy(13), as amended by Regulation (EC) No 1244/2001(14), stipulates that the amounts accruing from penalties for infringement of environmental protection requirements or from modulation remain available to the Member States as additional Community support for certain rural development measures. Exactly what the Commission's approval covers in the case of such measures should be specified.
(22) Detailed rules should be laid down for the presentation of rural development plans and their revision.
(23) In order to facilitate the establishment of rural development plans and their examination and approval by the Commission, common rules should be laid down for the structure and content of those plans, based on the requirements set out in particular in Article 43 of Regulation (EC) No 1257/1999.
(24) Requirements should be set for amendments to rural development programming documents so as to enable the Commission to examine them quickly and efficiently.
(25) Only those amendments which involve important changes to rural development programming documents should be subject to the management committee procedure. Other amendments should be decided by the Member States and communicated to the Commission.
(26) In order to cover all the measures needed for the implementation of the Community initiative programme for rural development, the scope of the measures eligible for aid from the EAGGF Guidance Section should be extended beyond what is provided under Regulation (EC) No 1257/1999.
(27) Detailed rules should be laid down on the financial planning and contributions to financing of the measures financed by the EAGGF Guarantee Section under Article 35(1) and (2) of Regulation (EC) No 1257/1999.
(28) In this connection, Member States should report regularly to the Commission on the state of financing of rural development measures.
(29) Steps should be taken to ensure that appropriations earmarked for rural development support are efficiently used, in particular by providing for the Commission to grant an initial advance payment to paying agencies and for allocations to be adjusted according to needs and in the light of past performance. It would also be advisable to provide for the possibility of granting advances to certain categories of beneficiaries, under certain conditions, in order to facilitate the implementation of investment measures.
(30) The general rules on budgetary discipline, in particular those relating to incomplete or incorrect declarations by Member States, should apply in addition to the specific rules laid down in this Regulation.
(31) The detailed financial administration of rural development measures should be governed by the regulations implementing Regulation (EC) No 1258/1999.
(32) Procedures and requirements for monitoring and evaluation should be laid down following the principles applicable to other Community support measures, in particular those laid down by Regulation (EC) No 1260/1999.
(33) The administrative rules should permit better administration, monitoring and control of rural development support. In the interests of simplicity, Council Regulation (EEC) No 3508/92 of 27 November 1992 establishing an integrated administration and control system for certain Community aid schemes(15), as last amended by Commission Regulation (EC) No 495/2001(16), and the detailed rules for applying it as laid down by Commission Regulation (EC) No 2419/2001(17), as amended by Regulation (EC) No 2550/2001(18), should be applied wherever possible.
(34) Provision should be made for a system of penalties at both Community and Member State level.
(35) The Committee on Agricultural Structures and Rural Development has not delivered an opinion within the time limit set by its chairman,
HAS ADOPTED THIS REGULATION:
CHAPTER I
RURAL DEVELOPMENT MEASURES
SECTION 1
Investment in agricultural holdings
Article 1
1. The conditions for support for investment laid down in Article 5 of Regulation (EC) No 1257/1999 must be fulfilled at the time when the individual decision to grant support is taken.
2. Where investments are made in order to comply with newly introduced minimum standards relating to the environment, hygiene, and animal welfare, support may be granted in order to reach these new standards. In such cases, a period of grace may be provided to meet these minimum standards where time is needed to solve the specific problems involved in reaching such standards and provided this is in accordance with the specific legislation concerned.
3. In the case of farms in rural areas where the structural difficulties caused by the very small size of farms make it particularly difficult to meet the requirements of Article 5 of Regulation (EC) No 1257/1999, Member States may grant such farms support for investments totalling less than EUR 25000 to enable them to comply with those requirements within a period of not more than three years from the date of the decision to grant the support.
The provisions of the first subparagraph shall apply until 31 December 2002 and without prejudice to paragraph 2 of this Article.
Article 2
1. For the purposes of Article 6 of Regulation (EC) No 1257/1999, the existence of normal market outlets shall be assessed at the appropriate level in terms of:
(a) the products concerned;
(b) the types of investment;
(c) existing and planned capacity.
2. Any restrictions on production or limitations on Community support under common market organisations shall be taken into account.
3. Where a common market organisation places restrictions on production or limitations on Community support at the level of individual farmers, holdings or processing plants, no investment shall be supported which would increase production beyond those restrictions or limitations.
Article 3
1. Where investments are made by young farmers, the maximum percentages of the volume of eligible investment referred to in the second sentence of the second paragraph of Article 7 of Regulation (EC) No 1257/1999 may be applied for up to five years after setting-up.
2. Article 4(2) of this Regulation shall also apply to investments made by young farmers within five years of setting-up.
SECTION 2
Setting-up of young farmers
Article 4
1. The conditions for start-up assistance for young farmers laid down in Article 8(1) of Regulation (EC) No 1257/1999 must be met at the time when the individual decision to grant support is taken. Farmers starting up under the conditions described in Article 5(3) of this Regulation who apply for aid no later than 31 December 2001 must meet the age condition laid down in the first indent of Article 8(1) of Regulation (EC) No 1257/1999 at the time of start-up.
2. A period not exceeding three years may be allowed after starting up in order to meet the requirements relating to occupational skill and competence, economic viability and minimum standards regarding the environment, hygiene and animal welfare, if the young farmer needs a period of adaptation in which to start up or to restructure the holding.
Article 5
1. The individual decision to grant the aid provided for in Article 8 of Regulation (EC) No 1257/1999 shall be taken no later than 12 months after start-up as defined by the provisions in force in the Member States.
2. Where young farmers who start up before 1 January 2002 would be able to receive support more than 12 months after starting up under the arrangements in the programming document approved by the Commission, Member States may take the individual decision to grant support no later than 31 December 2002.
3. Where young farmers have started up in 1999, 2000 or 2001 and have not yet received support for budget or administrative reasons, Member States may take the individual decision to grant support no later than 31 December 2001 or within not more than 12 months after start-up.
SECTION 3
Training
Article 6
Support for vocational training shall not include courses of instruction or training which form part of normal programmes or systems of agricultural and forestry education at secondary or higher levels.
SECTION 4
Early retirement
Article 7
Where a farm is transferred by several transferors, overall support shall be limited to the amount provided for one transferor.
Article 8
Non-commercial farming activity continued by the transferor in accordance with the first indent of Article 11(1) of Regulation (EC) No 1257/1999 shall not be eligible for support under the common agricultural policy.
Article 9
A tenant farmer may transfer the released land to the owner provided that the lease is terminated and the requirements relating to the transferee laid down in Article 11(2) of Regulation (EC) No 1257/1999 are complied with.
Article 10
Released land may be included in a re-parcelling operation or in a simple exchange of parcels.
In such cases, the conditions applicable to released land shall be applied to areas agronomically equivalent to the released land.
Member States may make provision for released land to be taken in charge by a body which undertakes to reassign it at a later date to a transferee who satisfies the conditions laid down for early retirement.
SECTION 5
Less-favoured areas and areas with environmental restrictions
Article 11
Compensatory allowances for areas used jointly by several farmers for the purpose of grazing animals may be granted to each farmer concerned in proportion to that farmer's use or, right of use, of the land.
Article 12
The support provided for in Article 16 of Regulation (EC) No 1257/1999 may not offset the costs and loss of income resulting from the implementation of restrictions based on Directive 91/676/EEC.
SECTION 6
Agri-environment
Article 13
Any commitment to extensify livestock farming or manage livestock farming differently shall comply with at least the following conditions:
(a) grassland management shall continue;
(b) the livestock shall be distributed across the farm in such a way that the whole of the grazed area is maintained, thus avoiding both over-grazing and under-utilisation;
(c) livestock density shall be defined taking into account all grazing livestock kept on the farm or, in the case of a commitment to limit nutrient leaching, all animals kept on the farm which are relevant to the commitment in question.
Article 14
1. Support may relate to the following commitments:
(a) to rear farm animals of local breeds indigenous to the area and in danger of being lost to farming;
(b) to preserve plant genetic resources naturally adapted to the local and regional conditions and under threat of genetic erosion.
2. The local breeds and plant genetic resources must play a role in maintaining the environment on the area to which the measure provided for in paragraph 1 applies.
The eligible species of farm animals and the criteria for determining the threshold of loss to farming of local breeds are defined in the table in Annex I to this Regulation.
Article 15
For the purposes of the second subparagraph of Article 24(1) of Regulation (EC) No 1257/1999, capital works shall be considered to be non-remunerative provided that they do not normally lead to any significant net increase in the value or profitability of the farm.
Article 16
Agri-environment commitments beyond the minimum period of five years referred to in Article 23(1) of Regulation (EC) No 1257/1999 shall not run for a longer period than is reasonably necessary for the achievement of their environmental effects. They shall normally be for no longer than 10 years, except in the case of specific commitments where a longer period is found to be indispensable.
Article 17
Various agri-environment commitments may be combined provided that they are complementary and compatible.
Where agri-environment measures are thus combined, the level of support shall take account of income forgone and specific additional costs arising from the combination.
Article 18
1. The reference level for calculating income forgone and additional costs resulting from the commitments given shall be the usual good farming practice in the area where the measure is applied.
The economic consequences of abandoning land or ceasing certain farming practices may be taken into account where this is justified by the agronomic or environmental circumstances.
2. Payments may not be made per unit of production, except in the case of support for rearing farm animals of breeds which are in danger of being lost, which may be paid per livestock unit or per animal reared. Where commitments are normally expressed in units other than area, Member States may calculate payments on the basis of those units.
3. In the specific cases referred to in paragraph 2, Member States shall ensure that the maximum amounts per year eligible for Community support as set out in the Annex to Regulation (EC) No 1257/1999 are complied with.
To this end the Member State may:
(a) set a limit on the number of units per hectare of the farm to which the agri-environment commitments applies; or
(b) determine the overall maximum amount for each participating farm and ensure that the payments for each farm are compatible with this limit.
4. Payments may be based on limitations on the use of fertilisers, plant protection products or other inputs only if such limitations are technically and economically measurable.
Article 19
Member States shall determine the need to provide an incentive as provided for in the third indent of the first subparagraph of Article 24(1) of Regulation (EC) No 1257/1999 on the basis of objective criteria.
Incentives may not exceed 20 % of the income forgone and additional costs due to the commitment given, except in the case of specific commitments where a higher rate is deemed to be indispensable for effective implementation of the measure.
Article 20
A farmer who gives an agri-environment commitment relating to one part of a farm shall adhere to at least the standard of usual good farming practice throughout the farm.
Article 21
1. Member States may authorise one commitment to be converted into another during the period of its operation, on condition that:
(a) any such conversion is of unquestionable benefit to the environment;
(b) the existing commitment is significantly reinforced; and
(c) the approved programme includes the commitments concerned.
An agri-environment commitment may be converted into a commitment for afforestation of agricultural land under Article 31 of Regulation (EC) No 1257/1999 subject to the conditions set out in points (a) and (b) of the first subparagraph of this paragraph. The agri-environment commitment shall cease without reimbursement being required.
2. Member States may allow agri-environment commitments to be adjusted during the period for which they apply, provided that the approved programme includes scope for such adjustment and that the adjustment is duly justified having regard to the objectives of the commitment.
SECTION 7
Improving the processing and marketing of agricultural products
Article 22
Eligible expenditure may include:
(a) the construction and acquisition of immovable property, with the exception of land purchase;
(b) new machinery and equipment including computer software;
(c) general costs, such as architects', engineers' and consultants' fees, feasibility studies, acquisition of patents and licences.
The costs referred to in point (c) of the first subparagraph are in addition to the costs referred to in (a) and (b) and shall be considered eligible expenditure up to a ceiling of 12 % of those costs.
Article 23
1. For the purposes of Article 26(3) of Regulation (EC) No 1257/1999, the existence of normal market outlets shall be assessed at the appropriate level in relation to:
(a) the products concerned;
(b) the types of investment;
(c) existing and planned capacity.
2. Any restrictions on production or limitations on Community support under common market organisations shall be taken into account.
Article 24
In the outermost regions, support may be granted for investment in the processing or marketing of products from third countries, provided that the processed products are intended for the market of the region in question.
For the purpose of compliance with the condition laid down in the first subparagraph, support shall be limited to processing capacity corresponding to regional needs, provided that such processing capacity does not exceed such needs.
SECTION 8
Forestry
Article 25
The forests excluded from forestry support under Article 29(3) of Regulation (EC) No 1257/1999 shall be:
(a) forest or other wooded land owned by central or regional governments, or by government-owned corporations;
(b) Crown forest and other wooded land;
(c) forests owned by legal persons at least 50 % of whose capital is held by one of the institutions referred to in points (a) and (b).
Article 26
Agricultural land eligible for support for afforestation under Article 31 of Regulation (EC) No 1257/1999 shall be specified by the Member State and shall include in particular arable land, grassland, permanent pastures and land used for perennial crops, where farming takes place on a regular basis.
Article 27
1. For the purposes of the second indent of the second subparagraph of Article 31(1) of Regulation (EC) No 1257/1999, "farmer" means a person who devotes an essential part of his or her working time to agricultural activities and derives from them a significant part of his or her income according to detailed criteria to be determined by the Member State.
2. For the purposes of the second subparagraph of Article 31(3) of Regulation (EC) No 1257/1999, "fast-growing species cultivated in the short term" means species with a rotation time, namely the period between two harvest cuts on the same parcel, of less than 15 years.
Article 28
1. Support under Article 32 of Regulation (EC) No 1257/1999 may not be granted for areas for which support under Article 31 of that Regulation has been granted.
2. Payments for maintaining fire-breaks through agricultural measures under the second indent of Article 32(1) of Regulation (EC) No 1257/1999 may not be granted for areas which are the subject of agri-environment support.
Such payments shall be consistent with any restrictions on production or limitations on Community support under common market organisations and shall take account of payments made under those common market organisations.
SECTION 9
Rules common to several measures
Article 29
For the purposes of the third indent of Article 14(2) and the first subparagraph of Article 23(2) of Regulation (EC) No 1257/1999, "usual good farming practice" means the standard of farming which a reasonable farmer would follow in the region concerned.
Member States shall set out verifiable standards in their rural development plans. These standards shall at least entail compliance with general mandatory environmental requirements.
Article 30
Where a beneficiary transfers all or part of a holding to another person during the period for which a commitment given as a condition for the grant of support runs, the transferee may take over the commitment for the remainder of the period. If the commitment is not transferred, the beneficiary shall reimburse the support granted.
Member States may choose not to require such reimbursement if a beneficiary who has already honoured a significant part of the commitment concerned definitively ceases agricultural activities and it is not feasible for a successor to take over the commitment.
In the event of minor changes to the situation of a holding, Member States may take specific measures to ensure that application of the first subparagraph does not lead to inappropriate results in terms of the commitment entered into.
Article 31
1. When a beneficiary increases the area of the holding during the period for which a commitment given as a condition for the grant of support runs, Member States may provide for the commitment to be extended to cover the additional area for the remainder of the period of the commitment in accordance with paragraph 2, or for the original commitment to be replaced by a new one in accordance with paragraph 3.
Provision may also be made for such replacement in cases where the area covered by a commitment within a holding is extended.
2. The extension referred to in paragraph 1 may be granted only under the following conditions:
(a) it is of unquestionable benefit to the measure concerned;
(b) it is justified in terms of the nature of the commitment, the length of the remaining period and the size of the additional area;
(c) it does not impede the effectiveness of checks to ensure compliance with the conditions for the grant of support.
The size of the additional area referred to in (b) must be significantly less than the original area or not more than two hectares.
3. The new commitment referred to in paragraph 1 shall cover the whole area concerned under terms at least as strict as those of the original commitment.
Article 32
Where a beneficiary is unable to continue to comply with commitments given because the holding is reparcelled or is the subject of other similar public land-consolidation measures, Member States shall take the measures necessary to allow the commitments to be adapted to the new situation of the holding. If such adaptation proves impossible, the commitment shall expire and reimbursement shall not be required in respect of the period in which the commitment was effective.
Article 33
1. Without prejudice to the actual circumstances to be taken into consideration in individual cases, Member States may recognise, in particular, the following categories of force majeure:
(a) death of the farmer;
(b) long-term professional incapacity of the farmer;
(c) expropriation of a large part of the holding if this could not have been anticipated on the day on which the commitment was given;
(d) a severe natural disaster seriously affecting the agricultural land on the holding;
(e) the accidental destruction of livestock buildings on the holding;
(f) an epizootic disease affecting all or part of the farmer's livestock.
Member States shall notify the Commission of categories which they recognise as force majeure.
2. Cases of force majeure shall be notified in writing to the competent authority, together with relevant evidence to the satisfaction of that authority, within 10 working days of the date on which the farmer is in a position to do so.
CHAPTER II
GENERAL RULES AND ADMINISTRATIVE AND FINANCIAL PROVISIONS
SECTION 1
General rules
Article 34
For the purposes of the second subparagraph of Article 37(3) of Regulation (EC) No 1257/1999, Articles 35, 36 and 37 of this Regulation shall apply.
Article 35
1. Environmental measures implemented under common market organisations, agricultural quality and health measures, or rural development measures other than agri-environment support, shall not preclude agri-environment support for the same production, provided that such support is additional and consistent with the measures concerned.
2. In the event of a combination as envisaged in paragraph 1, the following provisions shall apply:
(a) agri-environment measures on land set aside under Article 6 of Council Regulation (EC) No 1251/1999(19) shall qualify for support only if the commitments go beyond the appropriate environmental measures referred to in Article 6(2) of that Regulation;
(b) in the case of extensification of beef production, support shall take account of the extensification payment under Article 13 of Council Regulation (EC) No 1254/1999(20);
(c) in the case of support for less-favoured areas and areas with environmental restrictions, agri-environment commitments shall take account of the conditions laid down for support in the areas concerned.
3. For the purposes of applying paragraphs 1 and 2, the level of support shall take account of income forgone and specific additional costs arising from the combination.
Article 36
Under no circumstances may the same commitment be the subject of payments simultaneously under agri-environment support and another Community aid scheme.
Article 37
Member States shall propose any exceptions under the first indent of the second subparagraph of Article 37(3) of Regulation (EC) No 1257/1999 in their rural development plans or programming documents presented for Objectives 1 and 2 as provided for in Article 18(1) and (2) and Article 19(1), (2) and (3) of Regulation (EC) No 1260/1999.
Article 38
Payments under rural development measures shall be made in full to the beneficiaries.
Article 39
Regulation (EC) No 1685/2000 shall apply to measures included in the programming referred to in Article 40(2) and (3) of Regulation (EC) No 1257/1999, except where otherwise provided in Regulations (EC) No 1257/1999 and No 1258/1999 and this Regulation.
SECTION 2
Programming
Article 40
The rural development plans under Title III, Chapter II, of Regulation (EC) No 1257/1999 shall be submitted in accordance with Annex II to this Regulation.
Article 41
1. The approval of the programming documents referred to in Article 44(2) of Regulation (EC) No 1257/1999 shall determine the overall amount of Community support.
That amount shall include:
(a) expenditure on measures presented under the new rural development programming, including expenditure on evaluation under Article 49(2) of Regulation (EC) No 1257/1999;
(b) expenditure incurred under earlier accompanying measures covered by Council Regulations (EEC) No 2078/92(21), (EEC) No 2079/92(22) and (EEC) No 2080/92(23) as well as expenditure incurred under the measures covered by the earlier Regulations repealed by the above Regulations;
(c) expenditure incurred on measures under Article 4 of Regulation (EC) No 2603/1999.
2. Besides the provisions of paragraph 1, the approval shall also cover the allocation and use of amounts remaining available to the Member States as additional Community support under Article 5 of Regulation (EC) No 1259/1999.
However, those amounts shall not be included in the overall amount of Community support referred to in paragraph 1.
3. The approval may cover State aid intended to provide additional financing to rural development measures only if the State aid is identified in accordance with point 16 of Annex II.
Article 42
Member States shall make rural development programming documents available to the public.
Article 43
Where rural development measures are submitted in the form of general framework regulations, rural development plans shall make appropriate reference to such regulations.
Articles 40, 41 and 42 shall also apply in the case referred to in the first paragraph.
Article 44
1. Amendments to rural development programming documents and single programming documents under Objective 2 in the case of rural development measures financed by the EAGGF Guarantee Section shall be duly substantiated, in particular giving the following information:
(a) the reasons and any implementation problems justifying adjustment of the programming document;
(b) the expected effects of the amendment;
(c) the implications for financing and verification of commitments.
2. Acting in accordance with the procedures referred to in Articles 50(2) and 48(3), respectively, of Regulation (EC) No 1260/1999, the Commission shall approve any amendments to rural development programming documents and to single programming documents under Objective 2 in the case of rural development measures financed by the EAGGF Guarantee Section whenever they have a bearing on:
(a) priorities;
(b) the main features of the support measures as indicated in Annex II, including changes to the rate of Community contribution;
(c) the overall amount of Community support;
(d) the financial allocation made for any measure, by changing it by more than 10 % of the amount provided for the entire programming period, calculated on the basis of the programming document approved by the Commission;
(e) additional financing in the form of State aid granted for any measure, by changing it by more than 10 % of the amount provided for that measure for the entire programming period, calculated on the basis of the programming document approved by the Commission.
Points (d) and (e) shall not apply to measures with a financial allocation accounting for less than 5 % of the total amount allocated to the programme for the entire programming period.
3. Amendments shall be submitted to the Commission in a single proposal per programme no more than once a year.
4. Amendments of a financial nature which are not covered by points (d) and (e) of paragraph 2 shall be communicated in due time to the Commission for information.
5. Amendments other than those covered in paragraphs 2 and 4 shall be communicated to the Commission at least two months before their entry into force.
Article 45
Where Community legislation is subsequently amended, rural development programming documents and single programming documents under Objective 2 shall be revised in line with subsequent changes in Community legislation.
Article 44(3) shall not apply to such revisions.
If the amendment of rural development programming documents or single programming documents under Objective 2 is limited to bringing the document into line with new Community legislation, such amendments shall be sent to the Commission for information.
SECTION 3
Additional measures and Community initiatives
Article 46
The scope of assistance from the EAGGF Guidance Section for measures in the Community initiative for rural development shall be extended to the whole Community and its financing extended to measures eligible under European Parliament and Council Regulations (EC) No 1783/1999(24) and (EC) No 1784/1999(25).
SECTION 4
Financial provisions
Article 47
1. No later than 30 September each year, the Member States shall forward the following information to the Commission, for each rural development programming document and each single programming document under Objective 2 in the case of rural development measures financed by the EAGGF Guarantee Section:
(a) a statement of expenditure incurred in the current financial year and expenditure remaining to be disbursed by the end of that year and covered by Community support as defined in Article 41(1); and
(b) revised forecasts of such expenditure for subsequent financial years until the end of the programming period concerned, keeping within the allocation for each Member State.
This information shall be transmitted in table format using a computerised model supplied by the Commission.
2. Without prejudice to the general rules on budgetary discipline, where the information which Member States are required to transmit to the Commission under paragraph 1 is incomplete or the time limit has not been met, the Commission shall reduce advances on entry in the accounts of agricultural expenditure on a temporary and flat-rate basis.
Article 48
1. For the month during which the decision is adopted approving a rural development programming document or a single programming document under Objective 2 in the case of rural development measures financed by the EAGGF Guarantee Section, the paying agencies may enter in the accounts as expenditure an advance not exceeding 12,5 % of the average annual EAGGF contribution provided for in the programming document, covering the expenditure referred to in Article 41(1).
This advance shall represent working capital which, in principle, may be recovered only at the end of the programming period for each programming document, or once the aggregate sum of the expenditure paid out by the EAGGF and the amount of the advance is equal to the total EAGGF contribution provided for in the programming document.
2. The advance under paragraph 1 shall be entered in the accounts, for those countries whose currency is not the euro on the date of such entry, using the rate of exchange prevailing on the penultimate Commission working day of the month preceding that in which the paying agencies enter the advance in the accounts.
Article 49
1. For each Member State, expenditure declared for any given financial year shall be financed up to the limit of the amounts notified to the Commission under point (b) of the first subparagraph of Article 47(1) which are covered by the appropriations entered in the budget for the financial year concerned.
2. Where the total amount of the forecasts notified under point (b) of the first subparagraph of Article 47(1) exceeds the total appropriations entered in the budget for the financial year concerned, the maximum amount of expenditure to be financed for each Member State shall be limited using the formula used to establish the corresponding annual allocation as defined in Decision 1999/659/EC.
If, after this reduction, appropriations remain available because some Member States have made forecasts which are below their annual allocation, the surplus amount shall be distributed in proportion to the Member States' respective annual allocations while ensuring that the amount forecast for each Member State as referred to in the first subparagraph is not exceeded. The Commission shall notify the forecasts thus adjusted to the Member States in the month following the adoption of the budget for the financial year concerned.
3. Where expenditure actually incurred by a Member State in any given financial year exceeds the amounts notified under point (b) of the first subparagraph of Article 47(1) or the amounts resulting from the application of paragraph 2 of this Article, the overruns on expenditure in the current financial year shall be taken into account on a pro rata basis, up to the limit of the appropriations remaining available after reimbursing to the other Member States the expenditure incurred.
4. Where expenditure actually incurred by a Member State in a given financial year is less than 75 % of the amounts referred to in paragraph 1, the expenditure to be recognised for the following financial year shall be reduced by a third of the difference between this threshold, or the amounts resulting from the application of paragraph 2 if they are below it, and the actual expenditure incurred during the financial year concerned.
This reduction shall not be taken into account when establishing actual expenditure in the financial year following that in which the reduction was made.
5. Paragraph 4 shall not apply to the first statement of expenditure incurred during the 2000 financial year under the rural development programming document or the single programming document under Objective 2 in the case of rural development measures financed by the EAGGF Guarantee Section.
Article 50
Articles 47, 48 and 49 of this Regulation shall not apply to expenditure incurred under Article 5 of Regulation (EC) No 1259/1999.
Article 51
The Community shall contribute to financing evaluations in the Member States under Article 49(2) of Regulation (EC) No 1257/1999 where such evaluations actually contribute to evaluation at Community level by virtue of their scope, particularly through their replies to common evaluation questions and their quality.
The Community contribution shall not exceed 50 % of a ceiling which, except in duly justified cases, shall be 1 % of the total costs of the rural development programme. For each rural development programme, at least 40 % of the part-financing shall concern ex post evaluation.
Article 52
1. Beneficiaries of investment support measures under Title II, Chapters I, VII, VIII and IX, of Regulation (EC) No 1257/1999 may request the payment of an advance from the competent paying agencies if this option is included in the programming document. As regards public beneficiaries, this advance may only be granted to municipalities and associations thereof and to public law bodies.
2. The amount of the advance shall not exceed 20 % of the total cost of the investment, and its payment shall be subject to the establishment of a bank guarantee corresponding to 110 % of the amount of the advance.
However, in the case of the public beneficiaries referred to in paragraph 1, the paying agency may accept a written guarantee from their authority, in accordance with provisions applied in the Member States, covering an amount equal to the percentage specified in the first subparagraph, provided that the authority undertakes to pay the amount covered by its guarantee should entitlement to the advance paid not be established.
3. The guarantee shall be released once the competent agency notes that the amount of real expenditure resulting from the investment exceeds the amount of the advance.
4. Paying agencies shall declare to the EAGGF Guarantee Section the amount corresponding to the Community part-financing:
(a) of the advance paid;
(b) of the actual expenditure subsequently paid to beneficiaries, minus the amount of the advance already paid.
SECTION 5
Monitoring and evaluation
Article 53
1. The annual progress reports provided for in Article 48(2) of Regulation (EC) No 1257/1999 shall be submitted to the Commission by 30 April of each year and shall relate to the previous calendar year.
Progress reports shall contain the following information:
(a) any change in the general conditions which is of relevance to the implementation of the measure, and in particular any major socio-economic trends or changes in national, regional or sectoral policies;
(b) the progress of measures and priorities in relation to their operational and specific objectives, expressed using quantitative indicators;
(c) action taken by the management authority and the Monitoring Committee, if provision has been made for such a committee, to ensure high quality and effective implementation, and in particular:
(i) monitoring measures, financial control and evaluation, including data collection procedures;
(ii) a summary of the major problems encountered in managing the measure and any steps taken;
(d) measures taken to ensure compatibility with Community policies.
2. The indicators referred to in point (b) of the second subparagraph of paragraph 1 shall follow, as far as possible, the common indicators defined in the guidelines drawn up by the Commission. Where additional indicators are needed to effectively monitor progress towards the objectives in the rural development programming documents, these shall be included.
Article 54
1. Evaluations shall be performed by independent evaluators in accordance with recognised practice.
2. Evaluations shall provide answers, in particular, to common evaluation questions defined by the Commission in consultation with the Member States and shall, as a general rule, be accompanied by performance-related criteria and indicators.
3. The authority responsible for managing the rural development programming document shall assemble the appropriate resources for evaluations, making use of monitoring results and gathering additional information where necessary.
Article 55
1. Ex ante evaluation shall analyse the disparities, gaps and potentials of the current situation, assess the consistency of the proposed strategy with the situation and targets and consider the issues raised in the common evaluation questions. It shall assess the expected impact of the selected priorities for action and quantify their targets where possible. It shall also verify the proposed implementing arrangements and consistency with the common agricultural policy and other policies.
2. Ex ante evaluation shall be the responsibility of the authorities preparing the rural development plan and shall form part of it.
Article 56
1. Mid-term and ex post evaluation shall deal with the specific issues arising in the rural development programming document concerned and with common evaluation questions relevant at Community level. These shall relate to the living conditions and structure of the rural population, employment and income from farm and off-farm activities, agricultural structures, agricultural commodities, quality, competitiveness, forest resources and the environment.
If a common evaluation question is not considered relevant to a particular rural development programming document, this shall be substantiated.
2. Mid-term evaluation shall deal with the evaluation questions and shall examine in particular the initial achievements, their relevance to and consistency with the rural development programming document and the extent to which the targets have been attained. It shall also assess the use made of financial resources and the operation of monitoring and implementation.
Ex post evaluation shall answer the evaluation questions, paying particular attention to the use made of resources and the effectiveness and efficiency of assistance and its impact and shall draw conclusions concerning rural development policy, including its contribution to the common agricultural policy.
3. Mid-term and ex post evaluation shall be performed in consultation with the Commission under the responsibility of the authority in charge of managing rural development programming.
4. The quality of individual evaluations shall be assessed using recognised methods by the authority in charge of managing the rural development programming document, the Monitoring Committee, if any, and the Commission. The results of the evaluations shall be made available to the public.
Article 57
1. A mid-term evaluation report shall be transmitted to the Commission not later than 31 December 2003. The authority responsible for managing the rural development programming document shall inform the Commission on the follow-up to the recommendations in the evaluation report. The Commission shall prepare a Community-level summary upon receipt of the individual evaluation reports. Where necessary, an update of the mid-term evaluation shall be completed by 31 December 2005.
2. An ex post evaluation report shall be transmitted to the Commission not later than two years after the end of the programming period. Within three years of the end of the programming period and upon receipt of the individual evaluation reports the Commission shall prepare a Community-level summary.
3. The evaluation reports shall explain the methods used, including their implications for the quality of the data and the findings. Reports shall include a description of the context and contents of the programme, financial information and the answers - including the indicators used - to the common evaluation questions and the evaluation questions defined at national or regional level, as well as conclusions and recommendations. Their structure shall follow, as far as possible, a common structure for evaluation reports defined in guidelines drawn up by the Commission.
SECTION 6
Applications, checks and penalties
Article 58
1. Applications for rural development support for areas or animals which are lodged separately from aid applications under Article 6 of Regulation (EC) No 2419/2001 shall indicate all the areas and animals on the holding which are relevant for checking the applications under the measure in question, including those for which no support is requested.
2. Where a rural development support measure relates to areas, parcels shall be identified individually. During the period covered by a commitment, parcels receiving support may not be exchanged except in cases specifically provided for in the programming document.
3. Where an application for payment is included with an application for an area payment in the context of the integrated administration and control system, the Member State shall ensure that parcels covered by applications for rural development support are declared separately.
4. Plots of land and animals shall be identified in accordance with Articles 4 and 5 of Regulation (EEC) No 3508/92.
5. Where support is multiannual, payments subsequent to that made in the year an application was submitted shall be made in response to an annual application for payment, except where the Member State has introduced an effective annual verification procedure as referred to in Article 59(1).
Article 59
1. Initial applications to join a scheme and subsequent applications for payment shall be checked in a manner which ensures effective verification of compliance with the conditions for granting support.
The Member States shall define suitable methods and means for verifying each support measure as well as the persons who shall be subject to checks.
Wherever appropriate, Member States shall make use of the integrated administration and control system introduced by Regulation (EEC) No 3508/92.
2. Verification shall consist of administrative and on-the-spot checks.
Article 60
Administrative checks shall be exhaustive and shall include cross-checks wherever appropriate, inter alia with data from the integrated administration and control system. They shall relate to parcels and livestock covered by a support measure in order to avoid all unjustified payments of aid. Compliance with long-term commitments shall also be checked.
Article 61
On-the-spot checks shall be made in accordance with Title III of Regulation (EC) No 2419/2001. They shall cover at least 5 % of beneficiaries each year and all the different types of rural development measures set out in the programming documents.
On-the-spot checks shall be spread over the year on the basis of an analysis of the risks presented by each rural development measure.
Checks shall cover all the commitments and obligations of a beneficiary which can be checked at the time of the visit.
Article 62
1. Articles 30, 31 and 32 of Regulation (EC) No 2419/2001 shall apply to area payments.
Articles 36, 38 and 40 of that Regulation shall apply to headage payments.
2. Article 44 of Regulation (EC) No 2419/2001 shall apply to the support referred to in paragraph 1 of this Article.
3. In the event of undue payment, the individual beneficiary under a rural development measure shall be under an obligation to repay the amount in accordance with Article 49 of Regulation (EC) No 2419/2001.
Article 63
1. Any beneficiary found to have made a false declaration as a result of serious negligence shall be excluded from all rural development measures under the relevant chapter of Regulation (EC) No 1257/1999 for the calendar year in question.
Where a false declaration was made intentionally, the beneficiary shall be excluded for the following year as well.
2. The penalties provided for in paragraph 1 shall apply without prejudice to additional penalties provided for under national rules.
Article 64
Member States shall lay down the rules on penalties applicable to infringements of the provisions of this Regulation and shall take all measures necessary to ensure that they are implemented. The penalties provided for must be effective, proportionate and dissuasive.
CHAPTER III
FINAL PROVISIONS
Article 65
1. Regulation (EC) No 1750/1999 is repealed.
References to the repealed Regulation shall be construed as references to this Regulation and shall be read in accordance with the correlation table in Annex III.
2. The Regulations and Decisions repealed by Regulation (EC) No 1750/1999 shall continue to apply to actions approved by the Commission before 1 January 2000 under the Regulations referred to in Article 55(1) of Regulation (EC) No 1257/1999.
Article 66
This Regulation shall enter into force on the seventh day following its publication in the Official Journal of the European Communities.
This Regulation shall be binding in its entirety and directly applicable in all Member States.
Done at Brussels, 26 February 2002.