A4-0043/97

Resolution informing the Commission of the reasons for the postponement of the giving of a discharge to the Commission in respect of the EAGGF clearance of the accounts for the 1992 financial year (C(96)0417 - C4-0259/96)

The European Parliament,

- having regard to the Treaty establishing the European Community and especially Article 206 thereof,

- having regard to Article 89 of the Financial Regulation,

- having regard to paragraph 4 of its decision of 5 April 1995 ((OJ C 109, 1.5.1995, p. 51.)) giving discharge to the Commission in respect of the implementation of the general budget for 1992,

- having regard to the Commission decisions of 10 April 1996 ((OJ L 117, 14.5.1996, p. 19.)) and 20 November 1996 ((OJ L 323, 13.12.1996, p. 26.)) on the clearance of accounts for the financial year 1992,

- having regard to Special Report No 1/97 of the Court of Auditors on the Commission Decisions of 10 April 1996 and 20 November 1996 on the clearance of the accounts for 1992 and certain expenditure for 1993, accompanied by the Commission's replies (C4-0063/97) ((OJ C 52, 21.2.1997.)),

- having regard to the interim report of the Committee on Budgetary Control (A4-0043/97),

A. whereas Article 206(3) of the EC Treaty requires the Commission to take all appropriate steps to act on the observations in Parliament's decisions giving discharge that relate to the execution of expenditure,

B. whereas the discharge procedure for a financial year cannot be deemed completed until the European Parliament has examined the appropriate decisions on the clearance of accounts and the financial corrections to the expenditure implemented during the financial year in question.

C. whereas the clearance of accounts must ensure that the Community is not charged for any amounts paid without a legal basis,

D. whereas the European Court of Justice has repeatedly ruled that the Commission may refuse to implement expenditure for the account of the EAGGF if the scale of the amounts wrongly paid cannot be determined and that the burden of proof for the level of losses actually incurred rests with the Member States,

E. whereas respect for Community legislation should be taken for granted and must on no account be encouraged or bought with financial concessions charged to the Community budget,

F. whereas in paragraph 2 of its resolution of 17 April 1996 giving discharge to the Commission in respect of the EAGGF clearance of accounts for the 1991 financial year ((OJ C 141, 13.5.1996, p. 107)) it accepted the use of flat-rate financial corrections as a legitimate means of recovering funds from Member States on condition that they are used as an objective assessment of the actual loss to the Community budget owing to ineligible or irregular expenditure in the Member States,

G. whereas in paragraph 3 of the same resolution it called on the Commission immediately to cease the practice, apparent in the 1991 clearance of accounts procedure, of treating the amounts of financial corrections as negotiable on the basis of criteria other than objective evidence of the actual loss borne by the Community budget,

1. Is concerned about the scale - some ECU 800 m - of the financial corrections that became necessary during the 1992 clearance of accounts; sees this as confirmation of its view that major problems persist in the application of Community legislation in the agricultural sector;

2. Notes that the amounts of financial corrections to be determined by the Commission should be guided solely by the level of the actual loss to the Community budget and are not negotiable on the basis of other criteria; points out to the Commission that further disregard for this precept will result in refusal of the discharge, with the political implications this will have;

3. Objects to the Commission's disregard in its abovementioned decision of 10 April 1996 of its financial controller's refusal to give his approval and to the reduction by ECU 30.3 m of the amount of the financial correction relating to the public storage of beef in Ireland; objects further to the restriction of the financial corrections to 1990 and 1991 and to there being no financial corrections at all for 1992 even though the Court of Auditors identified serious shortcomings in that year;

4. Objects that the Commission's decision to reduce the financial correction for Greece by ECU 96.2 m because of inadequate audits in the cotton sector conveys the impression that the Commission has to pay for the Member States' compliance with the rules;

5. Refrains, for overriding reasons in the interests of legal certainty, from calling on the Commission to revise these decisions; calls on the Commission, however, to provide in its next decision on the clearance of accounts for a financial correction appropriate to the risk of loss arising for the 1993 EAGGF in the Greek cotton sector;

6. Is alarmed at the potential scale of the financial losses to the Community budget arising from the fact that the Commission's accounts clearance unit is understaffed;

7. Notes that the arbitration procedure first used for the clearance of the 1992 accounts has further delayed the decisions and has still to prove its usefulness;

8. Defers its decision giving a discharge until

(a) the request made in its resolution of 17 April 1996 has been fulfilled and the unit responsible for the clearance of accounts has been enlarged by 15 posts through transfers,

(b) the Commission has added to the current rates of 2%, 5% and 10% a fourth rate of 25% in its rules on the calculation of flat-rate corrections, clarified the criteria relating to the application of these rates and made it clear that the amount of the corrections must be geared solely to the amount of the loss to the Community budget, and the question whether the national authorities have taken effective measures to rectify the criticized shortcomings in auditing has ceased to be the criterion on which the amount of the correction is based;

9. Instructs its President to forward this resolution to the Commission.