2.

Article 4 is amended as follows; (a) paragraph 1 is replaced by the following: ‘1. On the basis of data sent in accordance with Article 3, the Commission shall adopt decisions and make the monthly advances against booking of expenditure, without prejudice to the provisions of Article 14 of Council Regulation 2040/2000 (5). If advance commitments in accordance with Article 150(3) of Council Regulation (EC, Euratom) No 1605/2002 (6) exceed one half of the total corresponding appropriations for the current financial year, the advances shall be granted as a percentage of the declarations of expenditure received from each Member State. The Commission shall take the balance of amounts not reimbursed to the Member States into account in decisions on subsequent reimbursements. If the Community budget has not been adopted by the beginning of the financial year, the advances shall be granted as a percentage of the declarations of expenditure received from each Member State, laid down for each chapter of expenditure and within the limits laid down in Article 13 of Regulation (EC, Euratom) No 1605/2002. The Commission shall take the balance of amounts not reimbursed to the Member States into account in decisions on subsequent reimbursements. (b) paragraph 2 is replaced by the following: ‘2. Advances against booking shall be reduced for expenditure effected after the deadlines laid down as follows: (a) where expenditure effected after the deadlines is equal to 4 % or less of the expenditure effected before the deadlines, no reduction shall be made; (b) above the threshold of 4 %, all further expenditure effected with a delay of up to: — one month shall be reduced by 10 %, — two months shall be reduced by 25 %, — three months shall be reduced by 45 %, — four months shall be reduced by 70 %, — five months or more shall be reduced by 100 %; (c) however, in the case of the direct payments referred to in Article 12 and Title III or, where applicable, Title IVa of Council Regulation (EC) No 1782/2003 (7) made in respect of year n, paid out after the deadlines laid down and after 15 October of year n+1, the following conditions shall apply: — where the 4 % threshold referred to in point (a) has not been used in full for payments made no later than 15 October of year n+1 and the remainder of the threshold exceeds 2 %, that remainder shall be reduced to 2 %, — in any case, payments made in the course of budget year n+2 and subsequent years shall be eligible for the Member State concerned only up to the level of its national ceiling as provided for in Annexes VIII or VIIIa or its annual financial envelope established in accordance with Article 143b(3) of Regulation (EC) No 1782/2003 for the year preceding that of the budget year during which the payment is made, where applicable plus the amounts relating to the dairy premium and additional payments provided for in Articles 95 and 96 and the additional amount of aid provided for in Article 12 of that Regulation, less the percentage provided for in Article 10 and corrected by the adjustment provided for in Article 11, taking account of Article 12a of that Regulation and the amounts set in Article 4 of Regulation (EC) No 188/2005 (8), — above the thresholds referred to above, the expenditure concerned by this point shall be reduced by 100 %; (d) the Commission shall apply a different time scale and/or lower reductions or none at all if exceptional management conditions are encountered for certain measures or if justified reasons are advanced by the Member States. However, in the case of the payments referred to in point (c), the preceding sentence shall apply within the ceilings referred to in the second indent of point (c); (e) the reductions referred to in this Article shall be made in accordance with the rules laid down in Article 14 of Regulation (EC) No 2040/2000. (c) paragraph 6 is replaced by the following: ‘6. Where the Commission does not receive the documents referred to in Article 55(1) of Commission Regulation (EC) No 817/2004 (9) by 30 September each year, it may, after notifying the Member State concerned, suspend payment of the advance relating to expenditure incurred in respect of September in accordance with that Regulation until the advance relating to expenditure for October.