EN    EN EN 
EN    EN  EUROPEAN COMMISSION 
Brussels, 10.9.2010 
SEC(2010) 1010 final 
  
REPLIES OF THE COMMISSION TO THE ANNUAL REPORT 2009 OF THE 
COURT OF AUDITORS 
CHAPTER 2 "REVENUE" 
EN 2   EN REPLIES OF THE COMMISSION TO THE ANNUAL REPORT 2009 OF THE 
COURT OF AUDITORS 
CHAPTER 2 "REVENUE" 
INTRODUCTION  
REGULARITY OF TRANSACTIONS  
2.17. These anomalies once spotted by the Co mmission were communicated to Member 
States and the Court. All Member States agreed that the necessary remedial measures be taken 
as part of the routine proce dures for revisions and updates.   
EFFECTIVENESS OF SYSTEMS 
2.20. The Commission will request the Member Stat es concerned to take remedial action to 
address the short-comings found and where nece ssary Traditional Own Resources underpaid 
will be requested as well as any late payment interest due.  
2.21. The Member States concerned will be requested to justify the amounts in the accounts, 
to make good any short-payments of Traditi onal Own Resources discovered, and where late 
making available has occurred, late payment interest will be demanded. 
2.22. The Commission's position has been base d on Article 867(a) of  Regulation 2454/93 
implementing the Customs Code according to wh ich goods seized and confiscated are to be 
considered to have been entered for the cu stoms warehousing procedure. For goods entered 
under this procedure no customs debt is established and entere d in the accounts. The Court of 
Justice judgement of 2009 did not cover the relevance of Article 867(a) as to the treatment of 
the customs debt for seized goods and theref ore the Commission awaited the outcome of 
another similar case, C-230/08. The Commission is  assessing the consequence of the recent 
judgement in this case and the follow-up to be  given. In any event, when the Modernised 
Customs Code enters into force, for seiz ed goods the customs debt will always be 
extinguished, regardless of the place where the goods are seized. 
2.23. It is for the Member Stat es to establish their Cust oms control systems based on 
appropriate methods of risk analysis. The defici encies referred to by the Court concern three 
Member States. In one of these identical findings  were made in the Court's audit of Simplified 
Procedures and the Commission is following up th e action being taken. In the remaining two 
they relate to the absence of a random element in the declaration/trader selection system. The 
national authorities have taken remedial measures in one. In the other a random element was used but was not incorporated  in the automated system for the selection of import 
declarations/traders for examination.  
2.24. The Commission agrees with the Court that  Customs controls could be improved and 
need to evolve in the light of  experience and best practice.  
The Commission has been taking action to assi st the Member States with the evolving 
procedures. Detailed guidelines have been pr ovided, as has training on how best to apply 
them. The results will be examined during m onitoring visits to be made during 2010 and 
2011. In addition throughout 2009 and 2010 the Commission has carried out specific 
inspections, in every Member State, of their Cu stoms Control Strategies. On the basis of these 
inspections and the Court's audit observations the Commission has already requested remedial 
action. It will prepare, in the course of  2010, a thematic report on the Customs Control 
Strategy in the Member States, incorporating the Court's findings as well as those of the 
EN 3   EN Commission. This will be discus sed with Member States at ACOR with the objective of 
seeking improvements in this field.  
2.25. As the Court acknowledges the starting point for calculating the annual VAT base, on 
which the amount of VAT own resources contributi ons is in turn fixed,  is the value of VAT 
receipts actually coll ected during that one year. Although a diminution in the VAT gap, could 
theoretically result in an increase in the VAT own resources paid, the legislator opted for a 
method in which any increase in VAT own resour ces would be neutralised, from a budgetary 
point of view, by a corresponding reduction in the amount raised from GNI resources. 
2.26. Proactive measures to lift long-outstanding reservations continue. In 2008 the Commission 
categorised, on a risk basis, all long-outstanding reserv ations and began, with the Member States 
concerned, to resolve the items taking those re lative priorities into account. The strategy 
began to bear fruit in 2009 and is continuing: a further 7 of the oldest reservations have been 
lifted during 2010. The Commission consider s good progress has been achieved. Further 
management meetings are to be scheduled in 2010/11. 
2.27. The Report quoted deals with deficit and debt data of general government in Greece. A 
thorough analysis of the potential impact of the issues which emerged from this deficit and 
debt verification did not reveal a si gnificant impact on GDP/GNI levels. 
Greece has started addressing the issues raised  in the Commission Report of 8 January 2010, 
with the adoption of a new law on the Hellenic Statistical System including the creation of a 
new statistical authority (ELSTA T) in order to guarantee the independence and integrity of 
statistics. 
2.28. The Commission considers that the reliabil ity of national accounts depends primarily on 
the specific statistical sources and methods used and has ba sed its approach of GNI validation 
on their verification and improvement. Well desi gned supervisory and co ntrol systems (SCS) 
in national statistical institutes of Member Stat es may help identify and mitigate the risks of 
errors occurring. The Commission has already ta ken account of the remarks of the Court on 
SCS in the ways mentioned in its replies to paragraph 4.24 of the 2008 report. Furthermore, 
during the GNI verifications, the Commission collected info rmation on Member States' 
practices, in particular for th e purposes of the workshop it organised in December 2009. In 
accordance with the objectives of this works hop, the Commission will identify and develop 
best practices for use in the Member States, as  well as assessment proce dures in this domain. 
2.30. The Commission is continuing its cooperation with the two countries that still have GNP 
reservations for the period 1995-2001 (1 for Greece, and 3 for United Kingdom) so that these reservations can be lifted. 
2.31. The Commission applies direct  verification as a supplement  to the verification of the 
countries' GNI Inventories based on the GNI Inventory Assessment Questionnaire (GIAQ). 
The Commission considers that the number of components it had selected was sufficient for 
the purposes of direct verifica tion, in accordance with the “Guide lines for direct verification” 
approved by the GNI Committee. 
RELIABILITY OF COMMISSION M ANAGEMENT REPRESENTATIONS 
2.32. The Commission in its inspections of Simplif ied Procedures and Member States' control 
strategy has also found weaknesses in the contro l procedures in Member States and will 
continue to follow up the C ourt’s and its own findings. As soon as this follow-up is 
completed, the Commission will have a more comprehensive basis for an assessment.  
CONCLUSIONS AND RECOMMENDATIONS
 
EN 4   EN 2.35. The Commission will continue its regular ex amination of the B accounts to identify any 
weaknesses which might impact on the timely  establishment and making available of 
Traditional Own Resources. 
2.36. The Commission will follow up these weaknesse s in conjunction with the findings from 
its own inspections. 
2.37. So far a further seven of th e longest-outstanding reservati ons have been lifted in 2010. 
Further management meetings ar e to be scheduled in 2010/11. 
2.38. The Commission will complete the verificati on of Member States' GNI inventories and 
produce assessment reports at end 2010/early  2011. The Commission considers that the 
approach it applies (desk checks of the GN I Questionnaires, the ve rification of GNI 
Inventories using the GI AQ supplemented by a direct verificat ion) is appropriate for a final 
assessment of the Member States' GNI. In this context, supervisory a nd control systems (SCS) 
are of an organisational nature  and do not give specific indica tions on the reliability of the 
accounts, which depends primarily on the statis tical sources and met hods used, even though 
SCS may help mitigate risks of errors in national accounts.