Proposal for a Council Regulation (EC) amending Council Regulation (EEC) No 729/70 on the financing of the common agricultural policy (94/C 284/07) COM(94) 240 final - 94/0143(CNS)

(Submitted by the Commission on 1 July 1994)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 43 thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Parliament,

Having regard to the opinion of the Court of Auditors,

Whereas responsibility for checking EAGGF Guarantee Section expenditure lies essentially with the Member States, which designate the authorities and bodies empowered to effect expenditure, whereas the Commission, being responsible for implementing the Community budget, must check on the conditions under which payments and checks have been made; whereas the Commission can only finance expenditure where those conditions offer all necessary guarantees regarding compliance with Community rules;

Whereas, during the clearance of accounts, the Commission is able to determine within a reasonable time the total expenditure to be entered against the Guarantee Section in the general account only if it has satisfactory assurance that the national controls are adequate and transparent and that the paying agencies verify the legality and regularity of the payment requests which they execute; whereas provision should therefore be made for the accreditation of paying agencies by Member States; whereas it should be stipulated that only expenditure effected by paying agencies accredited by the Member States should be financed; whereas in order to ensure the transparency of national controls, in particular as regards authorization, validation and payment procedures, the number of authorities and bodies to which these responsibilities are delegated should, where appropriate, be restricted;

Whereas the decentralized management of Community finances, in particular following the reform of the common agricultural policy, leads to the designation of several paying agencies; whereas, therefore, where a Member State accredits more than one paying agency, it must designate a single contact body to ensure that financial management is consistent, to provide liaison between the Commission and the various approved paying agencies and to ensure that the information requested by the Commission concerning the operations of several paying agencies is made rapidly available;

Whereas the time limit for the clearance of accounts decision should be shortened; whereas, therefore, information technology must be used as fully as possible for producing the information to be sent to the Commission; whereas, when carrying out checks, the Commission must have access to information on expenditure held in both documents and magnetic files;

Whereas a single annual clearance of accounts decision creates numerous difficulties in that, for a given financial year, in respect of all measures covered by the Guarantee Fund and in all the Member States, it fulfils simultaneously an accounting objective and a recognition that expenditure has been effected in accordance with Community rules; whereas considerable time lags accompany the taking of this single decision, which is nevertheless subject to reservations and disjunctions; whereas is it accordingly necessary to separate the procedure into two types of decision, one concerning the clearance of accounts proper, the other determining the consequences to be drawn from the results of compliance audits;

Whereas the checks on conformity will therefore no longer be linked to a particular financial year; whereas the maximum period to which the consequences to be drawn from the checks on conformity may be applied must be determined;

Whereas certain provisions laid down in Regulation (EEC) No 729/70 have become irrelevant and may be repealed,

HAS ADOPTED THIS REGULATION:

Article 1

Regulation (EEC) No 729/70 is hereby amended as follows:

1. Article 4 is replaced by the following:

'Article 4

1. Each Member State shall communicate to the Commission:

(a) details of the authorities and bodies it accredits to pay the expenditure referred to in Articles 2 and 3, hereinafter referred to as the paying agencies.

Only paying agencies providing sufficient assurance concerning the proper functioning of their administrative organization and of their system of internal control may be accredited;

(b) where more than one paying agency is accredited, details of the authority or body it charges with gathering the information to be supplied to the Commission and sending the same, and with ensuring the uniform application of Community rules, hereinafter referred to as the coordinating body,

Only expenditure effected by accredited paying agencies shall be financed.

2. Each Member State shall limit the number of paying agencies accredited to the minimum necessary, taking into account its constitutional and institutional structures, to affect the expenditure referred to in Articles 2 and 3 under satisfactory administrative and accounting conditions.

3. Each Member State communicates to the Commission the following particulars concerning those paying agencies:

- their name and their statutes,

- the administrative, accounting and internal control conditions under which payments are made relating to the implementation of Community rules within the framework of the common agricultural policy,

- the act of accreditation.

The Commission shall be informed forthwith of any change in those particulars.

4. Where one or more of the conditions of accreditation are not, or are no longer, fulfilled by an accredited paying agency, the Member State concerned shall inform the Commission, and shall withdraw the accreditation unless the paying agency makes the necessary adjustments within a time limit to be fixed in relation to the seriousness of the problem.

5. The financial resources earmarked to cover the expenditure referred to in Article 1 (2) shall be mobilized by the Member States in accordance with the needs of their accredited paying agencies.

6. The accredited paying agencies and the coordinating bodies shall at least once a year draw up reports and a summary of accounts relating to the expenditure referred to in paragraph 1 (a).

Member States shall communicate those reports and accounts to the Commission and shall attach to them a report drawn up by the competent auditing or supervisory authorities dealing with such expenditure.

7. Detailed rules for the application of this Article, covering, in particular, the conditions and procedure for the accreditation referred to in paragraph 1, and the number of paying agencies which may be accredited, shall be adopted in accordance with the procedure laid down in Article 13.`;

2. Article 5 is replaced by the following:

'Article 5

1. Member States shall at regular intervals transmit to the Commission the following information, concerning the accredited paying agencies and coordinating bodies referred to in Article 4 and relating to transactions financed by the Guarantee Section:

(a) statements of expenditure and estimates of financial needs;

(b) annual accounts, accompanied by the information required for clearance and an attestation regarding the integrality, exactitude and veracity of the accounts transmitted.

2. The Commission, after consulting the Fund Committee:

(a) shall decide on monthly advances against booking of expenditure effected by the accredited paying agencies. Expenditure for October shall be attached to October if it is effected from 1 to 15 October and to November if it is effected from 16 to 31 October. Advance payments shall be made to the Member State not later than the third working day of the second month following that in which the expenditure is effected.

Additional advances may be made, the Fund Committee being informed at the next consultation;

(b) shall, before 30 April of the year following the financial year concerned, on the basis of the information referred to in paragraph 1 (b), clear the accounts of the accredited paying agencies. The accounts clearance decision shall cover the integrality, exactitude and veracity of the accounts submitted.

The decision shall not prejudice the adoption of a subsequent decision pursuant to point (c);

(c) shall decide on the expenditure to be deducted from the Community financing referred to in Article 2 and 3 where it finds that the expenditure has not been effected in compliance with Community rules. The Commission shall evaluate the amounts to be deducted having regard in particular to the significance of the non-compliance found.

A refusal to finance may not involve expenditure effected prior to the two financial years preceding notification to the Member State by the Commission of the results of those checks. This provision shall not apply to the financial consequences:

- of irregularities as referred to in Article 8 (2),

- concerning national aids, or infringements, for which the procedures referred to in Articles 93 and 169 of the Treaty have been initiated.

The Commission's findings and the replies of the Member State concerned shall be notified in writing, after which the two parties shall endeavour to conciliate their respective positions concerning the action to be taken, before a decision is taken to refuse financing.

3. Detailed rules for the application of this Article shall be adopted in accordance with the procedure laid down in Article 13. Those rules shall cover in particular the procedures relating to the attestation of the accounts referred to in paragraph 1, and to the decisions referred to in paragraph 2.`;

3. the second subparagraph of Article 8 (2) is replaced by the following:

'The sums recovered shall be paid to the accredited paying agencies and deducted by them from the expenditure financed by the Fund.`;

4. the first sentence of Article 9 (2) is replaced by the following:

'Without prejudice to the supervision effected by Member States in accordance with national provisions laid down by law, regulation or administrative action and without prejudice to the provisions of Article 188 (c) of the Treaty, or to any inspection organized on the basis of Article 209 (c) of the Treaty, agents appointed by the Commission to carry out inspections on the spot shall have access to the books and all other documents including information created or stored in electronic form relating to expenditure financed by the Fund.`

Article 2

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

Article 1 (1) shall apply from the financial year beginning on 16 October 1994.

2. The monthly advances referred to in Article 5 (2) (a) of Regulation (EEC) No 729/70, as amended by this Regulation, may be made to paying agencies not yet approved in respect of expenditure effected up until 15 October 1995.

3. Refusal to grant financing as referred to in Article 5 (2) (c) of Regulation (EEC) No 729/70, as amended by this Regulation, may not relate to expenditure claimed against a financial year prior to 16 October 1991.

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