Amended proposal for a COUNCIL REGULATION amending Regulation (EEC) No 4045/89 on scrutiny by Member States of transactions forming part of the system of financing by the Guarantee Section of the European Agricultural Guidance and Guarantee Fund (presented by the Commission pursuant to Article 250 (2) of the EC-Treaty)

EXPLANATORY MEMORANDUM

The initial proposal was approved by ths Commission on 13th November 2001 (COM(2001) 663 final - 2001/0264(CNS)) and sent for opinion to the European Parliament.

European Parliament voted in favour of the rapporteurs' report on 24th September 2002 (A5-0275/2002). Several of the amendments proposed by Parliament elaborate and clarify the provisions of the Regulation and can be included in the final version of the Regulation amending Regulation (EEC) 4045/89.

2001/0264 (CNS)

Amended proposal for a COUNCIL REGULATION amending Regulation (EEC) No 4045/89 on scrutiny by Member States of transactions forming part of the system of financing by the Guarantee Section of the European Agricultural Guidance and Guarantee Fund

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 ..., ..., p. ...

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

[2] OJ C ..., ..., p. ...

Whereas:

(1) The rules for the selection of undertakings to be scrutinised as laid down in Article 2 of Council Regulation (EEC) No 4045/89 [3], as last amended by Regulation (EC) No 3235/94 [4], should be modified to take account of developments in the use of risk analysis techniques in other control measures, in order to take account of inflation since the last amendment to Regulation (EEC) No 4045/89, and to give Member States greater flexibility in the selection of undertakings.

[3] OJ L 388, 30.12.1989, p.18.

[4] OJ L 338, 28.12.1994, p.16.

(2) Provision should be made for cases where Member States carry out joint actions involving mutual assistance between Member States. A reduction in the number of scrutinies, reflecting the selection of undertakings on the basis of risk analysis techniques and enhanced mutual assistance, should not give rise to a deterioration in the quality of the scrutinies.

(3) The provisions relating to the communication of requests for mutual assistance under Article 7 of Regulation (EEC) No 4045/89 should be simplified.

(4) The provisions dealing with the financial participation of the Community in Member States' expenditure resulting from the application of Regulation (EEC) No 4045/89 have become obsolete and should be deleted.

(5) Regulation (EEC) No 4045/89 should therefore be amended accordingly,

HAS ADOPTED THIS REGULATION:

Article 1

Regulation (EEC) No 4045/89 is amended as follows:

(1) Article 1 is amended as follows:

(a) Paragraph 1 is replaced by the following:

"1. This Regulation relates to scrutiny of the commercial documents of those entities receiving or making payments relating directly or indirectly to the system of financing by the Guarantee Section of the EAGGF, or their representatives, hereinafter called 'undertakings', in order to ascertain whether transactions forming part of the system of financing by the Guarantee Section of the EAGGF have actually been carried out and have been executed correctly."

(b) The following paragraph is added:

" Scrutinies of rural redevelopment measures and projects not explicitly excluded from the scope of such scrutinies, pursuant to the Annex to Regulation (EC) No 2311/2000*, shall pay particular attention to the special conditions governing the implementation of such measures and projects."

_______________________________________

* OJ L 265, 19.10.2000, p. 10.

(2) Article 2(2) is amended as follows:

(a) in the first subparagraph, 'ECU 100 000' is replaced by 'EUR 150 000';

(b) in the fourth subparagraph, 'ECU 300 000' is replaced by 'EUR 350 000';

(c) in the fifth subparagraph, 'ECU 30 000' is replaced by 'EUR 40 000';

(3) In article 3(1), the following indent is added :

"- Checks, in relation to bookkeeping, or records of financial movements showing, at the time of the scrutiny, that the documents held by the paying agency as justification for the payment of aid to the beneficiary are accurate." ,

(4) Article 7 is amended as follows:

(a) In paragraph 1, the following subparagraph is added:

'Where two or more Member States include in the programme sent in under Article 10(1) a proposal for joint action involving extensive mutual assistance, the Commission may, on request, allow a reduction of up to a maximum of 25% of the minimum number of scrutinies as determined under Article 2(2) for the Member States concerned.',

(b) In paragraph 2, the last sentence is replaced by the following:

'An overview of such requests shall be sent to the Commission on a quarterly basis, within one month after the end of each quarter. The Commission may demand that a copy of individual requests be provided.',

(c) Paragraph 4 is replaced by the following:

'4. If additional information is required in another Member State as part of the scrutiny of an undertaking in accordance with Article 2, and in particular cross-checks in accordance with Article 3, specific scrutiny requests may be made indicating the reasons for the request. An overview of such specific requests shall be sent to the Commission on a quarterly basis within one month after the end of each quarter. The Commission may demand that a copy of individual requests be provided.

The scrutiny request shall be met not later than six months after its receipt; the results of the scrutiny shall be communicated without delay to the requesting Member State and to the Commission. The communication to the Commission shall be on a quarterly basis within one month after the end of each quarter.'

(5) Articles 12, 13, 14, 15, 16, 16a, and 17 are deleted.

Article 2

This Regulation shall enter into force on the third day following that of its publication in the Official Journal of the European Communities.

It shall apply with effect from the 2003/04 scrutiny period.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels,

For the Council

The President