Proposal for a COUNCIL REGULATION amending Regulation (EC) No 723/97 on the implementation of Member States' action programmes on control of EAGGF Guarantee Section expenditure

(presented by the Commission)

EXPLANATORY MEMORANDUM

Under Article 1 of Council Regulation (EC) No 723/97 of 22 April 1997 on the implementation of Member States' action programmes on control of EAGGF Guarantee Section expenditure, the Community contributes towards the costs incurred by the Member States in implementing new action programmes that arise out of new Community obligations, approved by the Commission and aimed at improving the structures or effectiveness of EAGGF Guarantee Section expenditure controls.

Article 4 of this Regulation provides that the Community financial contribution shall be granted per calendar year at a 50% rate for a period of five consecutive years starting from 1997 within the limit of the annual appropriations authorised by the budget authority in the light of the financial perspective.

Following its report sent to the Council on the implementation of this Regulation during the period 1997 to 2000, the Commission has expressed the view that the Member States should receive for a longer period the financial assistance provided for by Article 1 of Regulation (EC) No 723/97. In addition, new expensive techniques have been introduced by Council Regulation (EC) No 1593/2000 of 17 July 2000 amending Regulation (EEC) No 3508/92 establishing an integrated administration and control system for certain Community aid schemes, in the area of the improvement of the agricultural parcel identification system having recourse to the technique of geographical information system and of digital orthophotography, which make necessary a Community cofinancement in order to cover a part of the expenditure incurred by Member States in this domain.

The proposed amendment involves extending by one year the period during which Community financial contribution may be paid, within the limits of the appropriations allocated for this purpose.

The financial impact on the Community budget is estimated at EUR 15,0 million for 2002.

2001/0130 (CNS)

Proposal for a COUNCIL REGULATION

amending Regulation (EC) No 723/97 on the implementation of Member States' action programmes on control of EAGGF Guarantee Section expenditure

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 37 thereof,

Having regard to the proposal from the Commission [1],

[1] OJ C

Having regard to the opinion of the European Parliament [2],

[2] OJ C

Whereas:

(1) Article 1 of Council Regulation (EC) No 723/97 of 22 April 1997 on the implementation of Member States' action programmes on control of EAGGF Guarantee Section expenditure [3], provides that the Community contributes towards costs incurred by Member States in implementing new action programmes, arising out of new Community obligations, approved by the Commission and aimed at improving the structures or effectiveness of EAGGF Guarantee section expenditure controls; Article 4 of the Regulation provides that the Community financial contribution shall be granted per calendar year for a period of five consecutive years starting from 1997, within the limit of the annual appropriations authorised by the budget authority in the light of the financial perspective.

[3] OJ L 108, 25.4.1997, p. 6.

(2) The Commission has transmitted a report to the Council on the results of the application of Regulation (EC) No 723/97 during the period 1997 to 2000. Given the assessment reports prepared by the Member States and the effectiveness of the programmes implemented, the Commission concludes that Member States should continue to receive financial assistance for the implementation of the programmes foreseen in Article 1 of Regulation (EC) No 723/97.

(3) In particular, since new expensive techniques have been introduced by Council Regulation (EC) No 1593/2000 of 17 July 2000 amending Regulation (EEC) No 3508/92 establishing an integrated administration and control system for certain Community aid schemes [4],in the area of the improvement of the agricultural parcel identification system having recourse to the technique of geographical information system and of digital orthophotography, a Community contribution is justified to cover part of the expenditure incurred by Member States in the framework of new action programmes covering this domain; in this context, it is appropriate, for reasons of legal clarity, to delete the last indent of Article 5 of Regulation (EC) No 723/97.

[4] OJ L 182, 21.7.1999, p. 4. Regulation last amended by Commission Regulation (CE) No 495/2001 (OJ L 72, 14.3.2001, p. 6).

(4) The period during which Community financial contribution may be paid should therefore be extended by one year,

HAS ADOPTED THIS REGULATION:

Article 1

Regulation (EC) No 723/97 is hereby amended as follows:

1. In Article 2(1) the second subparagraph shall be replaced by the following:

"However, for programmes relating to the year 2002, the time limit for submission of action programmes to the Commission shall be the end of the first month following the entry into force of Regulation (EC) No ..../.... amending the present Regulation.

2. In the first sentence of Article 4(1), the terms " five consecutive years" shall be replaced by "six consecutive years".

3. In Article 5 the last indent shall be deleted.

Article 2

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,

For the Council

The President

FINANCIAL STATEMENT

1. Title of operation

Council Regulation amending Regulation (EC) No 723/97 on the implementation of Member States' action programmes on control of EAGGF Guarantee Section expenditure.

2. Budget heading(s) involved

B1-3602 - Monitoring and preventative measures - Payments by the Member States.

3. Legal basis

Article 37 of the Treaty.

4. Description of operation

4.1 General objective

The purpose of this Regulation is to extend by one year the duration of the financial contribution from the general budget of the European Union to expenditure incurred by Member States in implementing new action programmes arising out of new Community obligations, approved by the Commission and aimed at improving the structures or effectiveness of EAGGF Guarantee Section expenditure controls.

4.2 Period covered: one year

Financial year 2002.

5. Classification of expenditure or revenue

5.1 Compulsory expenditure

5.2 Non-differentiated appropriations

6. Type of expenditure or revenue

Contribution of 50% of the expenditure incurred by the Member States; the Community contribution is provided on the basis of action programmes which the Member States submit for approval to the Commission each year.

7. Financial impact

7.1 Method of calculating total cost of operation (definition of unit costs)

The calculation has been carried out on the basis of previous experience on expenditure referring to action programmes already introduced during the first period of the application of the measure as well as to the cost of applying the new techniques relating to the area of improving the agricultural parcel identification system having recourse to the technique of geographical information system and of digital orthophotography (the latter costs correspond to EUR 36 per applicant of aid of EUR 1,2/ha for a total cost of +/- EUR 116 million for all Member states).

7.2 Itemised breakdown of cost

Commitment appropriations EUR million (at current prices)

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7.3 Schedule of commitment and payment appropriations

Commitment appropriations EUR million (at current prices)

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8. Fraud prevention measures

Controls are essentially based on an audit involving inspection of expenditure documents, including any information and explanations that are believed necessary, and on on-the-spot checks to examine supporting documents, and/or carry out certain measures.

Where incorrect declarations are found, or discrepancies between the declared costs and the supporting documents exist, or expenditure is not eligible under the criteria laid down in the legislation, financing is reduced as a result and the amount unduly paid is recovered.

9. Elements of cost-effectiveness analysis

9.1 Specific and quantified objectives; target population

- Specific objectives: links with general objective

To provide financial help to Member States aiming to enchance the effectivences of EAGGF Guarantee Section expenditure controls.

- Target population

As this concerns controls, recipients of Community aid are targeted.

9.2 Grounds for the operation

The operation is based on the need to protect the Community's financial interests, i.e. the necessity to meet the needs of the Member States for whom these control operations constitute a considerable budgetary burden.

9.3 Monitoring and evaluation of the operation

Each special additional control operation is monitored both by the Member States and by Commission staff.