EUROPEAN COMMISSION Brussels, 14.9.2015 SWD(2015) 172 final COMMISSION STAFF WORKING DOCUMENT Accompanying the document REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL 8th FINANCIAL REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the

EUROPEAN AGRICULTURAL GUARANTEE FUND

2014 FINANCIAL YEAR {COM(2015) 444 final}



TABLE OF CONTENTS 1.BUDGET PROCEDURE 1.1.Financial Framework 2014-2020. 1.2.Budgetary procedure 2014 - Draft Budget 2014 and Amending Letter 2/2014 1.3.Adoption of the 2014 budget 1.4.Revenue assigned to the EAGF 1.5.Part of the EAGF budget in total EU budget 2.CASH POSITION AND MANAGEMENT OF APPROPRIATIONS 2.1.Management of appropriations 2.1.1.Appropriations available for the 2014 financial year 2.1.2.Expenditure section of the EU budget in relation to EAGF 2.1.3.Assigned revenue section of the EU budget in relation to EAGF 2.1.4.Budget execution of appropriations available for the 2014 financial year 2.1.5.Assigned revenue received under shared management 2.1.6.Budget execution 2.1.7.Budget execution of voted appropriations - Expenditure under direct management made by the Commission 2.1.8.Budget execution - Expenditure under direct management made by the Commission - Automatic carryover from 2013 2.2.Monthly payments 2.2.1.Monthly payments to Member States under shared management

2.2.1.1.Monthly payments on the provision for expenditure 2.2.1.2.Decisions on monthly payments for 2014 2.2.1.3.Reductions and suspensions of monthly payments 2.2.2.Direct management expenditure by the Commission 3.THE IMPLEMENTATION OF THE 2014 EAGF BUDGET 3.1.The uptake of the EAGF budget appropriations 4.COMMENTS ON THE IMPLEMENTATION OF 2014 EAGF BUDGET 4.1.Chapter 05 02: Interventions in agricultural markets 4.1.1.Introduction 4.1.2.Article 05 02 01: Cereals 4.1.3.Article 05 02 03: Refunds on Non-Annex I products 4.1.4.Article 05 02 04: Food programmes 4.1.5.Article 05 02 05: Sugar 4.1.6.Article 05 02 06: Olive oil 4.1.7.Article 05 02 07: Textile plants 4.1.8.Article 05 02 08: Fruits and vegetables 4.1.9.Article 05 02 09: Products of the wine-growing sector 4.1.10.Article 05 02 10: Promotion 4.1.11.Article 05 02 11: Other plant products/measures 4.1.12.Article 05 02 12: Milk and milk products

4.1.13.Article 05 02 13: Beef and veal 4.1.14.Article 05 02 15: Pig meat, eggs and poultry, bee-keeping and other animal products 4.2.Chapter 05 03: Direct Aids 4.2.1.Article 05 03 01: Decoupled direct aids 4.2.2.Article 05 03 02: Other direct aids 4.2.3.Article 05 03 03: Additional amounts of aid 4.2.4.Article 05 03 09: Reimbursement of direct aids in relation to financial discipline 4.2.5.Article 05 03 10: Reserve for crises in the agricultural sector 4.3.Chapter 05 04: Rural Development 4.3.1.Article 05 04 01: Rural Development financed by the ex-EAGGF-Guarantee. Completion of earlier programmes (2000 to 2006) 4.4.Chapter 05 07: Audit of agricultural expenditure 4.4.1.Article 05 07 01: Control of agricultural expenditure 4.4.2.Article 05 07 02: Settlement of disputes 4.5.Chapter 05 08: Policy strategy and coordination 4.5.1.Article 05 08 01: Farm accountancy data network (FADN) 4.5.2.Article 05 08 02: Surveys on the structure of agricultural holdings 4.5.3.Article 05 08 03: Restructuring of systems for agricultural surveys 4.5.4.Article 05 08 06: Enhancing public awareness of the common agricultural policy 4.5.5.Article 05 08 09: EAGF – Operational technical assistance 5.IMPLEMENTATION OF ASSIGNED REVENUE (policy area 05-agriculture and rural development)

5.1.Revenue assigned to EAGF 6.BREAKDOWN BY TYPE OF EXPENDITURE 7.SPECIFIC ACTIVITIES 7.1.Promotion measures – payments by Member States 8.CONTROL MEASURES 8.1.Introduction 8.2.Integrated Administration and Control System (IACS) 8.3.Market measures 8.4.Application of Chapter III of Title V Regulation (EU) No 1306/2013 (ex-post scrutiny) 9.CLEARANCE OF ACCOUNTS 9.1.Conformity clearance - Introduction 9.2.Conformity clearance – Audits and decisions adopted in 2014 9.2.1.Audits 9.2.2.Conformity decisions 9.3.Financial clearance 9.3.1.Introduction 9.3.2.Decisions 9.3.2.1.Financial clearance decision for the financial year 2010 9.3.2.2.Financial clearance decision for the financial year 2011 9.3.2.3.Financial clearance decision for the financial year 2012

9.3.2.4.Financial clearance decision for the financial year 2013 9.4.Appeals brought before the Court of Justice against clearance decisions 9.4.1.Judgments handed down 9.4.2.New appeals 9.4.3.Appeals pending 10.RELATIONS WITH PARLIAMENT AND WITH THE EUROPEAN COURT OF AUDITORS 10.1.Relations with Parliament 10.2.Relations with the European Court of Auditors 10.2.1.Mission of the European Court of Auditors 10.2.2.Annual Report 2013 10.2.3.Special Reports by the Court of Auditors 11.BASIC RULES GOVERNING EAGF AND AMENDMENTS MADE IN 2014 11.1.Checks 11.2.Clearance of accounts 11.3.Public storage 12.ANNEXES 1.BUDGET PROCEDURE 1.1.Financial Framework 2014-2020. CAP expenditure is funded within the financial framework for 2014-2020 as provided for in Council Regulation (EU) No 1311/2013. Specifically, CAP expenditure is part of the ceiling fixed for Heading 2 - Sustainable growth: natural resources. Within that overall ceiling, a specific sub-ceiling has been fixed for market related expenditure and direct payments.

To take account of the transfer of certain amounts to rural development (EAFRD) like the aids for cotton in Greece, the unspent amounts by Germany and Sweden as well as the voluntary adjustment amounts decided for the UK, the expenditure ceiling for market measures and direct payments had to be reduced accordingly. Therefore, on the basis of Commission Implementing Regulation (EU) No 367/2014 which sets the net balance available for expenditure of the European Agricultural Guarantee Fund (EAGF), the CAP amounts included in heading 2 of the financial framework (2014-2020) are: (in EUR million current prices) Heading 2* 2014 2015 2016 2017 2018 2019 2020 Total of which: - Market related expenditure and direct payments, a), b), c) 59 303 43 778.1 59 599 44 312.4 59 909 44 624.0 60 191 44 859.0 60 267 44 885.0 60 344 44 912.0 60 421 44 937.0 - Rural development a), b), c) 14 004.2 13 708.4 13 657.3 13 657.8 13 658.4 13 658.9 13 659.5 *) Sustainable growth: natural resources a) After net transfer of EUR 351.9 million between EAGF and EAFRD for the financial year 2014 (see note d) for details). b) After net transfer of EUR 51.6 million between EAGF and EAFRD for the financial year 2015 (see note d) for details. c) After net transfer of EUR 4 million between EAGF and EAFRD for the financial years 2016-2020 (see note d) for details). d) The transfers into Rural Development (EAFRD) mentioned in notes a) to c) above involve: EUR 4 million transferred annually for the whole period 2014-2020 from the cotton sector (EL) on the basis of Article 66(1) of Regulation (EU) No 1307/2013, EUR 296.3 million set for the voluntary adjustment transferred for the financial year 2014 (UK) on the basis of Article 10b and 10c(2) of Regulation (EC) No 73/2009 and EUR 51.6 million for unspent amounts transferred each year for financial years 2014 and 2015 (SE and DE) on the basis of Articles 136 and 136b of Regulation (EC) No 73/2009. 1.2.Budgetary procedure 2014 - Draft Budget 2014 and Amending Letter 2/2014 The 2014 Draft Budget was adopted by the Commission and proposed to the Budgetary Authority on 28 June 2013. The Draft Budget (DB) 2014 was adopted later than in previous years because of the on-going negotiations for the multiannual financial framework (MFF) 2014-2020. The commitment appropriations proposed for the EAGF totalled EUR 43 778.1 million. The Council and the European Parliament adopted their position on the 2014 DB on 2 September 2013 and 23 October 2013 respectively. The Council maintained the level of commitment and payment appropriations for the EAGF whereas the EP increased it by EUR 28 million for both commitment and payment appropriations. On 15 October 2013 the Commission adopted Amending Letter (AL) No 2 to the 2014 DB by keeping commitment appropriation requirements for EAGF at the level of the 2014 DB at EUR 43 778.1 million. In accordance with Article 25 of Regulation (EU) No 1306/2013, in financial years 2014-2020 the budget for the EAGF should include the reserve for crises in the agricultural sector. Moreover, in the Commission's Draft Budget and the Amending Letter for 2014, the level of commitment appropriations needed to cover the needs of the EAGF exceeded the MFF net ceiling for market-related expenditure and direct payments. Consequently, to establish the crisis reserve for budget year 2014 and to respect the EAGF net ceiling, the Commission fixed in accordance with Article 26 of the same Regulation an adjustment rate to direct payments via the mechanism of financial discipline. Based on new information available in the Amending Letter, this adjustment rate was subsequently adapted by the Council. 1.3.Adoption of the 2014 budget Agreement was reached on the 2014 budget in the conciliation procedure in November 2013. The Council and the European Parliament agreed to a compromise package on 12 November 2013. Finally, the 2014 budget was adopted by the European Parliament on 20 November 2013. The 2014 budget included commitment appropriations of EUR 43 778.1 million and payment appropriations of EUR 43 776.96 million for agricultural market measures and direct aids (policy area 05 - Agriculture and Rural Development). The difference between commitment and payment appropriations is due to the fact, that for certain measures, which are directly implemented by the Commission, differentiated appropriations are used. These measures relate mainly to the promotion of agricultural products and to policy strategy and coordination measures for agriculture. Specifically, of the voted EAGF commitment appropriations for policy area 05, EUR 2 233.4 million were foreseen for market measures under chapter 05 02, EUR 41 447.3 million were foreseen for direct aids under chapter 05 03. Furthermore, EUR 60.2 million were foreseen for audit of agricultural expenditure under chapter 05 07 and EUR 29.3 million for policy strategy and coordination under chapter 05 08. For details, please see annex 1. 1.4.Revenue assigned to the EAGF In accordance with Article 43 of Regulation (EC) No 1306/2013 on the financing of the Common Agricultural Policy, revenue originating from financial corrections under conformity clearance decisions, from irregularities and from the milk levy are designated as revenue assigned to the financing of EAGF expenditure. According to these rules, assigned revenue can be used to cover the financing of any EAGF expenditure. If a part of this revenue is not used, then this part will be automatically carried forward to the following budget year. At the time of establishment of the 2014 budget, an estimate of the revenue was made both for the amount expected to be collected in the course of the 2014 budget year as well as of the amount which was expected to be carried over from the budget year 2013 into 2014. This estimate amounted to EUR 1 464 million and it was taken into consideration when the Budgetary Authority adopted the 2014 budget. Specifically: –Revenue from the conformity clearance corrections and from irregularities was estimated at EUR 638 million and EUR 165 million respectively while the receipts from the milk levy were estimated at EUR 46 million. Thus, the total amount of assigned revenue expected to be collected in the course of the 2014 budget year was estimated at EUR 849 million. –The amount of assigned revenue expected to be carried over from the budget year 2013 into 2014 was estimated at EUR 615 million. In the 2014 budget, the Commission assigned this initially estimated assigned revenue of EUR 1 464 million to two schemes, i.e.: –EUR 464 million to the operational funds for producer organisations in the fruits and vegetables sector, and –EUR 1 000 million to the single payment scheme (direct aids).

For these two schemes, the Budgetary Authority eventually voted appropriations amounting to EUR 285 million and to EUR 30 083 million respectively in accordance with the Commission's proposals. The sum of the voted appropriations and the assigned revenue mentioned above corresponds to a total estimate of available appropriations of EUR 749 million for the operational funds for producer organisations in the fruits and vegetables sector and EUR 31 083 million for the single payment scheme. 1.5.Part of the EAGF budget in total EU budget The final EAGF budget's (commitment appropriations) part of the total EU budget for each year of the period 2008-2014 appears in annex 2. 2.CASH POSITION AND MANAGEMENT OF APPROPRIATIONS 2.1.Management of appropriations 2.1.1.Appropriations available for the 2014 financial year In EUR Expenditure section of budget (1) Commitment appropriations Payment appropriations Revenue section of budget (AR) (2) Forecasts 1. Initial appropriations for EAGF of which 43 778 100 000 43 776 956 403 1. Conformity clearance 638 000 000 1a. Appropriations under shared management 43 732 575 640 43 732 575 640 2. Irregularities 165 000 000 1b. Appropriations under direct management 45 524 360 44 380 763 3. Super levy from milk producers 46 000 000 2. Amending Budget -308 029 Total forecast of AR 849 000 000 3. Transfer to / out of EAGF in the year -568 429 4. Final appropriations for EAGF of which 43 778 100 000 43 776 079 945 4a. Appropriations under shared management 43 732 725 640 43 732 725 640 4b. Appropriations under direct management 45 374 360 43 354 305 (1) Appropriations entered in the 2014 budget after deducting the expected assigned revenue to be collected in 2014 and the one carried over from 2013 to 2014 in accordance with Article 14 of Regulation (EU, EURATOM) No 966/2012. (2) AR: Assigned revenue to be collected. There are no amounts of revenue entered on the revenue line (p.m.), but the forecast amount is indicated in the budget remarks. 2.1.2.Expenditure section of the EU budget in relation to EAGF The initial commitment appropriations for 2014 totalled EUR 43 778 100 000. This was a net amount after deducting the expected assigned revenue to be collected in 2014 and the one carried over from 2013 to 2014. The initial payment appropriations amounted to EUR 43 776 956 403. In financial year 2014, there were an Amending Budget and a transfer of payment appropriations out of EAGF. The commitment and payment appropriations finally available to the EAGF, after those transfers, for the 2014 financial year amounted to EUR 43 778 100 000 and EUR 43 776 079 945 respectively. Part of the appropriations coming from assigned revenue received in 2013 was not used in that financial year and it was automatically carried forward to 2014. The amount of these appropriations totalled EUR 710.2 million. 2.1.3.Assigned revenue section of the EU budget in relation to EAGF For more details, please see point 1.4. 2.1.4.Budget execution of appropriations available for the 2014 financial year In EUR Execution of commitment appropriations Execution of payment appropriations Shared management (1) 44 247 498 686.51 44 247 498 686.51 Expenditure under direct management 45 154 328.55 39 190 101.47 Total 44 292 653 015.06 44 286 688 787.98 (1) Committed amounts. Commitments and payments less assigned revenue received for shared management: EUR 43 233 320 312.15. For the financial year 2014, the actual amount of commitment appropriations used amounted to EUR 44 292 653 015.06 while that for payment appropriations amounted to EUR 44 286 688 787.98. 2.1.5.Assigned revenue received under shared management In EUR Assigned revenue Forecasted revenue 849 000 000.00 Revenue received 1 014 178 374.36 Difference 165 178 374.36 For details, please see points 1.4 and 5.1.

2.1.6.Budget execution In EUR



Expenditure under shared management (1) Final appropriations (C1) Assigned revenue appropriations (C4) Carry over of assigned revenue appropriations (C5) from 2013 Appropriations 43 732 725 640.00 1 014 178 374.36 710 213 059.61 Execution 42 864 376 700.44 672 908 926.46 710 213 059.61 Appropriations cancelled 3 310.56 - 0.00 Carry over to 2015 868 195 629.00 341 269 447.90 - (1) Commitment appropriations = Payment appropriations Appropriations available for the financing of the measures under management shared with Member States (excluding expenditure under direct management by the Commission) amounted to EUR 43 733 million compared to actual expenditure of

EUR 42 864 million. The amount of EUR 868.2 million was carried over to budget year 2015 with the Commission decision of 11 February 2015 on non-automatic carryover from 2014 to 2015. The 2014 appropriations coming from assigned revenue amounted to

EUR 1 014.2 million of which an amount of EUR 32.4 million was used in chapter 05 02 and an amount of EUR 640.5 million was used in chapter 05 03. The remaining amount of EUR 341.3 million was automatically carried over to budget year 2015. Part of the appropriations coming from assigned revenue received in 2013 was not used in financial year 2013 and was automatically carried forward to 2014 (C5 fund source). These appropriations amounted to EUR 710.2 million and had to be used in accordance with Article 14 of the Financial Regulation within that year. It should be noted that all these appropriations carried over from previous financial year have been fully used in 2014 in accordance with the Financial Regulation. 2.1.7.Budget execution of voted appropriations - Expenditure under direct management made by the Commission In EUR Expenditure under direct management Commitment appropriations De- commitments Payment appropriations Carry over to 2015 (2) Appropriations (C1) (1) 45 374 360.00 - 43 354 305.00 - Execution (C1) 45 154 328.55 - 26 986 218.54 16 114 870.92 Appropriations cancelled 220 031.45 - 253 215.54 - (1) C1 denotes the budget's voted appropriations. This amount includes transfer to ''shared management'' of EUR -150 000.00 for commitment and payment appropriations and Amending Budget and transfers out of EAGF of EUR -876 458.00 for payment appropriations (2) Carry over to 2015 only for non-differentiated appropriations. Commitment appropriations of EUR 45.4 million were foreseen for expenditure under direct management in the 2014 budget. An amount of EUR 45.2 million was committed in 2014. The balance of these appropriations, EUR 0.2 million, was cancelled. The majority of EAGF commitment appropriations for expenditure under direct management made by the Commission are non-differentiated appropriations. The automatic carry over to 2015, which relates only to non-differentiated appropriations, amounts to EUR 16.1 million. For details, please see annex 5 and 6. 2.1.8.Budget execution - Expenditure under direct management made by the Commission - Automatic carryover from 2013 In EUR Carry over from 2013 to 2014 Commitments De-commitments Payments Cancelled appropriations Carried over appropriations 13 301 780.75 1 015 702.87 12 203 882.93 82 194.95 The automatic carry over from 2013 to 2014 only concerned expenditure under direct management for non-differentiated appropriations. As indicated in the table above, an amount of EUR 13.3 million was carried over from 2013 to 2014. In 2014 an amount of EUR 1.0 million from this carry over was de-committed. The payments made amounted to EUR 12.2 million and the appropriations cancelled totalled EUR 0.08 million. For details, please see annex 6. 2.2.Monthly payments 2.2.1.Monthly payments to Member States under shared management 2.2.1.1.Monthly payments on the provision for expenditure Article 18(1) of Regulation (EU) No 1306/2013 states that "monthly payments shall be made by the Commission for expenditure effected by Member States' accredited paying agencies during the reference month". Monthly payments shall be made to each Member State at the latest on the third working day of the second month following that in which the expenditure is incurred.

The monthly payments are a reimbursement of net expenditure (after deduction of revenue) which has been already carried out and are made available on the basis of the monthly declarations forwarded by the Member States. The monthly booking of expenditure and revenue is subject to checks and corrections on the basis of the detailed declaration. Moreover, these payments will become final following the Commission's verifications under the accounting clearance of accounts procedure. Payments made by the Member States from 16 October 2013 to 15 October 2014 are covered by the system for monthly payments. The remaining payments are made directly by the Commission for a limited number of measures. For financial year 2014, the total net amount of monthly payments made, after the deduction of clearance and other corrections, was EUR 43 233 320 312.15. 2.2.1.2.Decisions on monthly payments for 2014 For the financial year 2014, the Commission adopted twelve decisions on monthly payments. Furthermore, an additional monthly payment decision, adjusting those already granted for the total expenditure chargeable to the year, was adopted in December 2014. For details, please see Annex 4 of the present working document. 2.2.1.3.Reductions and suspensions of monthly payments In 2014, reductions for a net amount of EUR 14.7 million were made to the monthly payments effected to the Member States. The categories of corrections are detailed in the following points. a.Reductions of the monthly payments as a result of the non-compliance with the payment deadlines Pursuant to Article 40 of Regulation (EU) No 1306/2013, certain Member States did not always respect the payment deadlines fixed by the Union legislation for the payment of aids to beneficiaries. The payment deadlines ensure an equal treatment between the beneficiaries in all the Member States and avoid the situation in which delays of payments would result in aids no longer having the intended economic effect. In addition, the deadlines help budgetary discipline by ensuring that the expenditure which falls in each budget year is more easily forecast. As a result of non-respecting the set payment deadlines, the Commission decided on two occasions, jointly with the monthly payments, reductions for a total amount of

EUR 5.5 million. b.Reductions of the monthly payments as a result of overspending the financial ceilings For some aid measures financed by EAGF, financial ceilings are determined in the sectoral regulations, which have to be adhered to. Expenditure exceeding these ceilings is considered as "non eligible expenditure" and has to be corrected. These corrections lead to reductions of the monthly payments. As a result of overspending these financial ceilings, the Commission made financial corrections for a total amount of EUR 9.2 million. 2.2.2.Direct management expenditure by the Commission In certain cases, the Commission makes payments directly for certain measures. These concern payments for certain measures which do not have the character of traditional market measures, in particular certain actions related to controls, to promotion actions and to information actions on the agricultural policy. For details, please see annexes 5 and 6. 3.THE IMPLEMENTATION OF THE 2014 EAGF BUDGET 3.1.The uptake of the EAGF budget appropriations The implementation of the budget amounted to EUR 44 292.7 million. This expenditure was funded by the budget's initial appropriations and by using the revenue assigned to policy area 05-Agriculture and Rural Development, composed of the entire amount of EUR 710.2 million carried over from 2013 and of a part of the assigned revenue collected in 2014 amounting to EUR 672.9 million out of a total EUR 1 014.2 million.

Within policy area 05-Agriculture and Rural Development, the expenditure for market measures amounted to EUR 2 478.7 million and for direct aids to

EUR 41 659.7 million. The expenditure incurred for certain market measures and direct aids exceeded the budget’s voted appropriations and it was partly covered by transfers of appropriations from other items of the budget and partly by the revenue which was assigned to the EAGF budget. For details of the budget's implementation by policy area, please see annex 7. Annex 13 presents a breakdown of the expenditure on market measures, direct aids and audit of agricultural expenditure by item and by Member State. 4.COMMENTS ON THE IMPLEMENTATION OF 2014 EAGF BUDGET A brief commentary on the implementation of the 2014 EAGF budget's appropriations as well as on the use of the assigned revenue available in 2014 is presented hereafter based on details appearing in the annexed tables: –Annex 7: Analysis of execution of the 2014 EAGF budget. The expenditure incurred for each item of the budget appears in column 5. Columns 1, 2 and 3 indicate, respectively, the source and amount of funding which originates either from voted appropriations or from transfers of assigned revenue and of voted appropriations from other items of the budget. –Annex 8: Assigned revenue (C4) collected and used in 2014 –Annex 9: Assigned revenue (C5) carried over from 2013 and used in 2014. This presentation is made at the level of each chapter, article and item of the agricultural budget. 4.1.Chapter 05 02: Interventions in agricultural markets 4.1.1.Introduction Total payments for this chapter of the 2014 budget amounted to EUR 2 478.7 million and they were funded by the voted appropriations and by assigned revenue amounting to EUR 302.7 million. The latter was used to cover the expenditure incurred in the fruits and vegetables sector (NB: for details, see point 4.1.8). The appropriations amounting to EUR 57.4 million were transferred to other parts of the EAGF budget. The remaining balance of assigned revenue collected in 2014 amounted to EUR 291.6 million and it was carried over to 2015. In items where the needs exceeded the budgetary appropriations, the additional expenditure was covered through transfers from other items of the budget. Equally, for the market measures and direct aids where the budget's appropriations were under-spent, the resulting available appropriations were transferred to other items of the budget in order to cover additional expenditure as needed. Annex 7 presents these details at the level of each budget item. 4.1.2.Article 05 02 01: Cereals The 2014 budget did not foresee any appropriations for the cereals sector. However, Member States incurred expenditure amounting to EUR 2.5 million which related to the payment of long-outstanding files for export refunds for the marketing years 2007-2008 and earlier. 4.1.3.Article 05 02 03: Refunds on Non-Annex I products The expenditure incurred for export refunds for processed agricultural products amounted to EUR 0.1 million mainly for outstanding balances of export refunds files for Non-Annex I products, thus, under-spending the 2014 budget’s appropriations by EUR 3.9 million. 4.1.4.Article 05 02 04: Food programmes It should be noted that 2013 was the last year of implementing the food programmes under the EAGF. On the basis of Regulation (EU) No 223/2014, as of 1 Jaunary 2014, these programmes are implemented through the Fund for European Aid to the Most Deprived financed within Heading 3 of the MFF. For this reason, there were no appropriations for the EAGF foreseen in the 2014 budget for these programmes. However, the EAGF accounts show that Member States recovered and declared to EAGF an amount of EUR 7.2 million which was paid before 2014.

4.1.5.Article 05 02 05: Sugar The 2014 budget did not foresee any appropriations for the sugar sector. However, Member States incurred expenditure amounting to around EUR 0.5 million which related to outstanding files for export refunds for sugar and isoglucose and for production refunds for sugar used in the chemical industry. 4.1.6.Article 05 02 06: Olive oil The under-execution by EUR 2.3 million related mainly to the aid for the financing of quality improvement work programmes. The approved operators’ organisations did not implement their 2013/2014 work programmes to the extent foreseen in the 2014 budget for these programmes. In addition, a minor under-execution of EUR 0.2 million for the payment of outstanding files relating to previous olive oil sector schemes occurred as Member States declared lower expenditure compared to the appropriations foreseen in the 2014 budget for these schemes. 4.1.7.Article 05 02 07: Textile plants The execution of this sector’s appropriations was almost as foreseen in the 2014 budget. 4.1.8.Article 05 02 08: Fruits and vegetables The 2014 budget foresaw total available appropriations amounting to EUR 1 140.7 million in order to cover the needs of all the measures for this sector. The Budgetary Authority voted appropriations of EUR 676.7 million as it took into account the estimated revenue assigned to this sector which amounted to EUR 464 million. The expenditure incurred by Member States in 2014 amounted to EUR 1 010.5 million. All the schemes funded under this article were under-implemented compared to the total estimated needs foreseen in the 2014 budget. The balance of the unused assigned revenue of EUR 291.6 million was carried over to the budget year 2015 to cover the needs of that year. As regards the operational funds for producer organisations, which aim at financing their production quality improvement, promotion and commercialisation programmes, the 2014 needs for these programmes were estimated at EUR 749 million. Out of this total amount, the Budgetary Authority voted appropriations amounting to EUR 285 million as it took account of the estimated revenue, amounting to EUR 464 million, which was assigned to the funding of this scheme. Member States eventually incurred expenditure amounting to EUR 724.4 million which was lower compared to the total appropriations available, mainly because the payments advanced for the 1st tranche of the producer organisations’ plans approved in 2014 were smaller than initially foreseen. Furthermore, Member States incurred expenditure for the aid to producer groups for preliminary recognition which was smaller than the available 2014 budget appropriations by around EUR 56.7 million. The impact of the transitional provisions, which limited the annual increase of the approved programmes, proved to be more significant than initially foreseen by the Commission. Finally, the 2014 budget for the School Fruit Scheme was under-executed by around EUR 48.3 million primarily because certain Member States incurred expenditure which remained below the budgetary allocation. Indeed the 2014 budget assumed that the foreseen increased envelope of EUR 150 million for this scheme would be already partially applied for the school year 2013/2014, which eventually was the case only as of school year 2014/2015. 4.1.9.Article 05 02 09: Products of the wine-growing sector The expenditure incurred by the Member States for the national support programmes in 2014 amounted to EUR 1 019.5 million compared to the appropriations of EUR 1 083 million foreseen in the 2014 budget. This under-execution is due to the lower expenditure incurred by some Member States in the first year of the new 2014-2018 programmes, whose implementation was slightly delayed especially with regard to the “promotion” and the “investment in enterprises” measures. Finally, Member States declared expenditure amounting to EUR 2.9 million for different aid schemes dating from the marketing year 2007/2008 and older. 4.1.10.Article 05 02 10: Promotion As regards promotion measures, Member States did not pay all the amounts foreseen in the budget for these measures based on the promotion decisions taken by the Commission. Total payments amounted to around EUR 53.2 million, thus, under-executing the 2014 budget by around EUR 6.8 million. As regards direct payments made by the European Union, the Commission committed appropriations equal to EUR 1.5 million which was the amount foreseen in the 2014 budget for these payments. 4.1.11.Article 05 02 11: Other plant products/measures The execution of this sector’s appropriations was almost as foreseen in the 2014 budget with a slight over-implementation of EUR 0.4 million which was primarily due to the higher expenditure incurred by Member States for the POSEI measures. 4.1.12.Article 05 02 12: Milk and milk products

As regards the private storage aid for butter, the appropriations foreseen in the 2014 budget amounted to EUR 6 million while the expenditure incurred amounted to EUR 4.1 million because of the shorter average storage time for the quantities of butter concerned. As regards the school milk scheme, the expenditure incurred by almost all Member States concerned was lower than the appropriations in the 2014 budget for the 2013/2014 school year, thus, leading to an under-execution by around EUR 7.4 million. 4.1.13.Article 05 02 13: Beef and veal The 2014 expenditure for this sector amounted to EUR 0.4 million for payments of outstanding files concerning export refunds for beef and veal and for live animals, thus, leading to an overall under-execution of the 2014 budget of around EUR 0.7 million. 4.1.14.Article 05 02 15: Pig meat, eggs and poultry, bee-keeping and other animal products The expenditure incurred by Member States for outstanding balances of export refunds for processed pig-meat products, poultry and eggs amounted to around EUR 1.2 million while the expenditure incurred for specific aid for bee-keeping were almost at the level of the appropriations retained in the 2014 budget. Finally, it should be noted that the EU’s contribution to the exceptional market support measures in Poland and Lithuania, under Commission Implementing Regulations (EU) 324/2014 and 428/2014, amounted to EUR 0.8 million as indicated in item 05 02 15 99. 4.2.Chapter 05 03: Direct Aids The voted appropriations for this chapter amounted to EUR 41 447.3 million while the expenditure incurred amounted to approximately EUR 41 659.7 million. This apparent over-implementation was primarily due to the fact that a part of the single payment scheme was foreseen to be funded by assigned revenue. Annex 7 presents these details at the level of each budget item. 4.2.1.Article 05 03 01: Decoupled direct aids The main schemes funded by this article's appropriations are the single payment scheme (SPS), the single area payment scheme (SAPS) and the decoupled specific support under article 68 of Council Regulation (EC) No 73/2009. All aid schemes in this article are paid independently of production but on certain conditions e.g. respect of cross-compliance. The expenditure incurred for all schemes in this article amounted to EUR 38 952.1 million, thus, exceeding the 2014 voted appropriations of EUR 38 252 million by EUR 700.1 million because part of the needs for this sector were funded by assigned revenue. As regards the single payment scheme, the Budgetary Authority voted appropriations amounting to EUR 30 083 million taking into account the needs and the revenue assigned to this budget item amounting to EUR 1 000 million. Hence, the available appropriations for this item totalled EUR 31 083 million. The Member States concerned incurred expenditure amounting to EUR 30 834.2 million, thus under-executing the available appropriations by EUR 248.8 million as certain Member States made lower payments for the single payment scheme. However, it should be noted that this scheme’s implementation improved and reached in 2014 99.2% of the level of estimated needs compared to the 99.1% in 2013. This expenditure was funded by the budget's voted appropriations of EUR 29 684.1 million, assigned revenue of EUR 1 080.4 million and by transfers of appropriations amounting to EUR 69.7 milion from other items of the 2014 budget. It should be noted that an amount of EUR 398.9 million was transferred, from the voted appropriations, to article 05 03 09, in order to finance in 2015 the reimbursement of the financial discipline for the claim year 2013 (NB: for details, see point 4.2.4). As regards to the single area payment scheme, the appropriations in the 2014 budget amounted to EUR 7 382 million. It should be noted that an amount of EUR 44.8 million was transferred from this item to article 05 03 09, in order to finance in 2015 the reimbursement of the financial discipline for the claim year 2013 (see point 4.2.4). Finally, the Member States incurred payments amounting to EUR 7 366.4 million which were funded by EUR 7 337.2 million remaining appropriations (after the aforementioned transfer) and by transfers amounting to EUR 29.2 milion from other items of the 2014 budget. For the separate sugar payment scheme, the Member States concerned did not fully execute their corresponding budgetary ceilings, which resulted in the under-execution of 2014 budget by around EUR 2.5 million while for the separate fruit and vegetables payment scheme the payments were made as foreseen in the 2014 budget. As regards the decoupled specific support under article 68 of Council Regulation (EC) No 73/2009, the expenditure incurred by Member States amounted to EUR 457.4 million, which resulted in an under-execution of the 2014 budget of around EUR 29.6 million. For the separate soft fruit payment scheme the payments were almost as foreseen in the 2014 budget. Finally, Member States recovered and declared unduly made payments for decoupled direct aids of previous years amounting to EUR 3.8 million. 4.2.2.Article 05 03 02: Other direct aids The appropriations of this article cover expenditure for other direct aids for which Member States have chosen to maintain a limited link between the payment of these aids and production for a number of sectors, under well defined conditions and within clear limits, in order to avoid the abandonment of this production. Thirteen schemes are funded under this article. For these schemes, the Commission had estimated that appropriations amounting to EUR 2 770.2 million were needed in 2014. Member States incurred expenditure amounting to EUR 2 707.6 million.

For most of these schemes, the Member States concerned incurred expenditure which was slightly lower than the 2014 budget's appropriations. The most important under-execution concerned the specific support schemes under article 68 of Council Regulation (EC) No 73/2009 which amounted to EUR 26.6 million. The appropriations of EUR 9.7 million foreseen in the 2014 budget for item 05 03 02 99 – Other (direct aids) were intended to cover expenditure and corrections for older schemes which were not covered under the other articles of the coupled direct aids sector. However, Member States incurred insignificant expenditure for older schemes but, declared corrections and recoveries of EUR 6.7 million under this item, which resulted in having appropriations available of around EUR 16.3 million. 4.2.3.Article 05 03 03: Additional amounts of aid While the appropriations foreseen in the 2014 budget for this scheme amounted to EUR 0.6 million, Member States incurred insignificant expenditure and thus under-executed the budget’s appropriations by almost a similar amount. 4.2.4.Article 05 03 09: Reimbursement of direct aids in relation to financial discipline No appropriations are allocated to this article by the Budgetary Authority. This article was established for the first time in budget year 2014 to facilitate the collection of the non-committed voted appropriations. The transfer of these appropriations, up to a limit of 2% of the initial appropriations for the EAGF under shared management, was made in order to finance in 2015 the reimbursement of the financial discipline applied to direct aids in respect of calendar year 2013. The amount of financial discipline effectively applied for claim year 2013 totalled EUR 868.2 million. This amount remains within the limit of 2% of the initial appropriations under shared management of EAGF. This amount was covered by a transfer of the non-committed appropriations, amounting to EUR 424.5 million, from article 05 03 10 involving the reserve for agricultural crises (NB: Please see point 4.2.5) and supplemented by a transfer of non-committed appropriations of EUR 398.9 million from item 05 03 01 01 and of EUR 44.8 million from item 05 03 01 02. 4.2.5.Article 05 03 10: Reserve for crises in the agricultural sector The appropriations of this article are intended to cover expenditure for measures which have to be taken in order to cope with major crises affecting agricultural production or distribution. The reserve is to be established by applying, at the beginning of each year, a reduction to the direct aids through the financial discipline mechanism in accordance with Articles 25 and 26 of Regulation (EU) No 1306/2013 as well as Article 8 of Regulation (EU) No 1307/2013. This reserve may not exceed a maximum annual amount of EUR 400 million (in 2011 prices). For the budget year 2014, the equivalent amount of the crisis reserve in current prices was EUR 424.5 million. The reserve was not used in financial year 2014. Therefore, by the end of the financial year, this unused amount of the reserve was transferred to budget article 05 03 09 for the carry-over to the next financial year and for the ultimate reimbursement as decribed in point 4.2.4 above. 4.3.Chapter 05 04: Rural Development 4.3.1.Article 05 04 01: Rural Development financed by the ex-EAGGF-Guarantee. Completion of earlier programmes (2000 to 2006) No commitment appropriations can be made anymore for these programmes. Member States are now closing these programmes and they recover unduly paid amounts. The final net amount recovered under this article was equal to around EUR 1.4 million of which EUR 1.3 million was used for funding other budget items. 4.4.Chapter 05 07: Audit of agricultural expenditure 4.4.1.Article 05 07 01: Control of agricultural expenditure This article involves the measures taken in order to reinforce the means of on-the-spot controls and to improve the systems of verification so as to limit the risk of frauds and irregularities in detriment of the Union budget. It also includes the expenditure which could be necessary in order to fund possible accounting and conformity corrections in favour of Member States. The European Union directly funded the purchase of satellite images within the framework of the Integrated Administrative and Control System (IACS) by committing the entire amount of EUR 6.8 million foreseen in the 2014 budget for Monitoring and preventive measures-Direct payments by the European Union. As regards the accounting clearance corrections in favour of Member States, the Commission took decisions which foresaw such corrections of approximately EUR 19.2 million. As regards the conformity clearance corrections in favour of Member States, the Commission took decisions which foresaw such corrections of approximately EUR 0.5 million. The Budgetary Authority had not granted appropriations for the funding of these corrections in favour of the Member States and these were eventually covered by transferring appropriations available from other items of the 2014 budget. 4.4.2.Article 05 07 02: Settlement of disputes The appropriations in this article are intended to cover expenditure for which the Commission could be held liable by decision of a court of justice, including the cost of settling claims for damages and interest. On 27 September 2012, the European Court of Justice delivered its judgment in joined cases C-113/10, C-147/10 and C-234/10 (the Jüllich-II judgement). The 2014 budget foresaw appropriations amounting to EUR 53.4 million for the payment of compensatory interest to operators under this judgement. However, Member States incurred and declared expenditure amounting to around EUR 92.3 million which was higher than the appropriations foreseen in the 2014 budget. Therefore, appropriations amounting to EUR 38.9 million were transferred from other items of the 2014 budget in order to fund the reimbursement of the total amount of compensatory interest declared by the Member States concerned.

4.5.Chapter 05 08: Policy strategy and coordination 4.5.1.Article 05 08 01: Farm accountancy data network (FADN) Appropriations committed with regard to the cost of data collection on farm holdings under this network amounted to EUR 14.5 million, thus, taking up almost all of the appropriations foreseen in the 2014 budget. 4.5.2.Article 05 08 02: Surveys on the structure of agricultural holdings The 2014 budget included appropriations of EUR 0.25 million intended to cover the maintenace cost of the IT infrastructure needed for the processing of the results of farm structure surveys. This amount was entirely committed for its intended purpose. 4.5.3.Article 05 08 03: Restructuring of systems for agricultural surveys Appropriations committed with regard to the cost of operating the meteorological system under the MARS project (Monitoring of Agriculture with Remote Sensing) amounted to approximately EUR 1.8 million thus, taking up almost all of the appropriations foreseen in the 2014 budget. 4.5.4.Article 05 08 06: Enhancing public awareness of the common agricultural policy Appropriations committed with regard to the cost of actions, fairs and publications aimed at improving the level of understanding of the CAP amounted to around EUR 8 million while additional appropriations amounting to around EUR 2.8 million were committed for the Commission’s Corporate Communication programme, thus, taking up almost all of the appropriations foreseen in the 2014 budget. 4.5.5.Article 05 08 09: EAGF – Operational technical assistance Appropriations committed with regard to operational technical assistance for the EAGF amounted to approximately EUR 1.7 million thus, taking up all of the appropriations foreseen in the 2014 budget. 5.IMPLEMENTATION OF ASSIGNED REVENUE (policy area 05-agriculture and rural development) 5.1.Revenue assigned to EAGF The assigned revenue actually carried over from 2013 into 2014, amounted to EUR 710.2 million and has been entirely used in financing expenditure of the 2014 budget year in accordance with article 14 of the Financial Regulation. As presented in annex 9, this amount covered expenditure of EUR 270.3 million for the operational funds for producer organisations in the fruits and vegetables sector and of EUR 439.9 million for the single payment scheme. As regards the assigned revenue collected in 2014, annex 8 shows that this revenue amounted to EUR 1 014.2 million and it originated from: –The corrections of the conformity clearance procedure which amounted to EUR 815.6 million. –The receipts from irregularities which amounted to EUR 150.3 million. –The milk levy collections which amounted to EUR 48.3 million. A part of the assigned revenue collected in 2014 amounting to EUR 672.9 million was used to cover expenditure incurred for the operational funds for producer organisations in the fruits and vegetables sector (EUR 32.4 million) and for the single payment scheme (EUR 640.5 million). The balance of the assigned revenue collected in 2014 amounting to EUR 341.3 million was automatically carried over into the 2015 budget in order to fund budgetary needs of that year.

6.BREAKDOWN BY TYPE OF EXPENDITURE The total EAGF expenditure amounts to EUR 44 292.7 million. Hereafter, this expenditure is presented broken down into the main reporting categories along with the percentage that these represent in the total EAGF expenditure for 2014: Storage Expenditure for storage amounted to EUR 5.1 million, i.e.: 0.01% of the total expenditure . This amount mainly represents the expenditure incurred for the private storage of butter. Export refunds Spending on export refunds amounted to EUR 4.5 million, i.e.: 0.01% of the total expenditure and it related mainly to paying outstanding balances for past exports of cereals and poultry. Other market measures In addition to storage and export refunds, the expenditure for other market measures amounted to EUR 2 579.6 million, i.e.: 5.8% of the year's total. This category covers expenditure mainly relating to olive oil, fruit and vegetables, wine, textile plants, POSEI, promotion measures, milk and milk products and bee-keeping. This expenditure incorporates other minor amounts and it includes the corrections arising from the clearance of accounts and settlement of disputes. Direct aids Expenditure for direct aids amounted to EUR 41 659.7 million, i.e.: 94 % of the total. Expenditure under direct management This expenditure amounted to EUR 45.2 million (in commitment appropriations), i.e.: 0.1% of the total, and it was paid directly by the Commission. It mostly covered the expenditure relating to farm accounting, surveys on farm structures, information on the CAP, technical assistance, etc. Rural development under ex-EAGGF-Guarantee No commitment appropriations can be made anymore for these programmes. Member States are now closing these programmes and they recover unduly paid amounts. The final net amount recovered under this article was around EUR 1.4 million. The evolution of the breakdown of EAGF expenditure by type for the period 2008-2014 is presented in annex 27. 7.SPECIFIC ACTIVITIES 7.1.Promotion measures – payments by Member States The legal basis for information and promotion programmes for agricultural products implemented in the EU and elsewhere is provided by Council Regulation (EC) No 3/2008 and Commission Regulation (EC) No 501/2008. Programmes are submitted by representative professional and inter-professional organisations to Member States which are responsible for programme management once the Commission has confirmed the selection and agreed the part-financing. The rate of co-financing of the action plans is 50%. In 2008, the Council accepted an increase of this percentage up to 60% for specific promotion actions concerning fruit and vegetables for school pupils and information on responsible drinking patterns and harm linked to hazardous alcohol consumption. The rules also allow the implementation of promotion and information measures to be carried out on the initiative of the Commission. In this framework the Commission organised two EU pavillions at major international trade fairs. In March 2014 it participated in the Foodex trade fair in Tokyo and in September 2014 at the Annapoorna World of Food India trade fair in Mumbai together with producers and producer organisations from different Member States. An information campaign emphasising the merits of European agricultural products was organised at both occasions.

In 2014, 47 new promotion programmes were approved by two Commission decisions both covering the internal market (33) and third countries (14), and payments made by Member States from the EU budget for promotion measures amounted to EUR 53.2 million compared to the 2014 budget appropriations of EUR 60 million. The selected programmes covered fresh and processed fruits and vegetables, dairy products, PDOs (Protected Designation of Origin), PGIs (Protected Geographical Indication) and TSGs (Traditional Specialities Guaranteed), olives and olive oil, organic products, ornamental horticulture, meat, eggs, processed products from cereals and rice, spirit and wine. Two of these programmes were proposed by more than one Member State while third country programmes aimed at the Russian, Chinese, North American and Latin American, Norwegian, Turkish, Azerbaijan, Belarussian, Middle East and South-East Asia markets. Regarding the reform of the promotion regime, Regulation (EU) No 1144/2014 of the European Parliament and of the Council repealing Council Regulation No 3/2008 was adopted on 22 October 2014 and shall enter into force on 1 December 2015. Intended as a tool for opening up new markets and diversifying trading partners, the new promotion policy will see a significant increase in the available EU financing, but will also be supported in future by a European executive agency. It foresees the establishment of a European promotion strategy for internal and external markets, widening the scope of measures, significantly higher EU co-financing, simplifying administrative procedures and facilitating management of multi-country programmes via a one-stop shop. 8.CONTROL MEASURES 8.1.Introduction The EU legislation provides for a comprehensive system of management and controls which relies on four levels: (a) compulsory administrative structure at the level of Member States, centred around the establishment of paying agencies and an accreditation authority at high level which is competent for issuing and withdrawing the agency’s accreditation. The decision for issuing the accreditation is based on a detailed review by an external audit body; (b) detailed systems for controls and dissuasive sanctions to be applied by those paying agencies, with common basic features and special rules tailored to the specificities of each aid regime; (c) ex-post controls by independent audit bodies on the paying agencies' annual accounts and the functioning of their internal control procedures (under Commission Delegated Regulation (EU) No 907/2014 and Commission Implementing Regulation (EU) No 908/2014) and by special departments on aid measures other than direct aids covered by the IACS (checks based on Chapter III of Title V of Regulation (EU) No 1306/2013); (d) clearance of accounts procedure through the Commission's annual financial clearance and multi-annual conformity clearance. These four levels establish a comprehensive system for the management and control of agricultural expenditure. It includes, on the one hand, all the necessary building blocks to guarantee a sound administration of the expenditure at Member States’ level and, on the other hand, allows the Commission to counter the risk of financial losses as a result of any deficiencies in the set-up and operation of those building blocks through the clearance of accounts procedure. Article 58 of Regulation (EU) No 1306/2013 provides for the general obligation of Member States to ensure that transactions financed by the EAGF and the EAFRD are carried out and executed correctly, to prevent and deal with irregularities and to recover amounts unduly paid. In complement to this general obligation, there is a system of controls and dissuasive sanctions of final beneficiaries which reflects the specific features of the regime and the risk involved in its administration. The controls are carried out by the paying agencies or by delegated bodies operating under their supervision and effective, dissuasive and proportionate sanctions are imposed if the controls reveal non-compliance with EU rules. The system generally provides for exhaustive administrative controls of 100% of the aid applications, cross-checks with other databases where this is considered appropriate as well as pre-payment on-the-spot controls of a sample of transactions ranging between 1% and 100%, depending on the risk associated with the regime in question. For example, the control rate in the framework of the Integrated Administration and Control System (IACS) is normally 5%. If the on-the-spot controls reveal a high number of irregularities, additional controls must be carried out. The sample of transactions is determined on a risk and/or random basis. In addition, for most regimes which are not subject to the IACS, on top of the primary and secondary control levels, ex-post controls must be carried out in accordance with the provisions of Chapter III of Title V in Regulation (EU) No 1306/2013. 8.2.Integrated Administration and Control System (IACS) Regulation (EU) No 1306/2013, Regulation (EU) No 1307/2013, Commission Delegated Regulation (EU) No 639/2014 and Commission Delegated Regulation (EU) No 640/2014 contain the rules on the IACS. A fully operational IACS consists of: a computerised database, an identification system for agricultural parcels and farmers claiming aid, a system for identification and registration of payment entitlements, aid applications and integrated controls system (claim processing, on-the-spot checks and sanctioning mechanisms) and a system for identifying and registering animals where applicable. The IACS is fully automated and provides highly efficient controls by maximising the use of computerised and remote controls. This system foresees a 100% administrative control covering the eligibility of the claim, complemented by administrative cross-controls with standing databases ensuring that only areas or animals that fulfil all eligible requirements are paid the premium and by a minimum 5% of on-the-spot checks to check the existence and eligibility of the area or the animals claimed. The use of standing databases, which are appropriately updated, is well adapted to the schemes whereby aids are directly paid to the farmers and based on the surfaces or on the number of animals, in that the risk can be reduced to the lowest levels.

For the financial year 2014, the IACS covered some 94% of the EAGF expenditure. Furthermore, the relevant components of the IACS are applicable to the rural development measures, which are based on area or number of animals. Such measures include, inter alia, agri-environment and animal welfare measures, less-favoured areas and areas with environmental restrictions and afforestation of agricultural land. For financial year 2014, around 40% of payments made under the EAFRD were also covered. The Commission services verify the effectiveness of Member States' IACS and homogenous implementation by means of both on-the-spot auditing and general supervision based on annually supplied financial and statistical data. It has been established already for some years now that the IACS provides an excellent and cost effective means of ensuring the proper use of EU funds. 8.3.Market measures Market interventions, for example export refunds, storage aid or producer organisations, are not covered by IACS but they are governed by specific rules as regards controls and sanctions which are set out in horizontal and sector-based regulations. Aids are paid on the basis of claims, often involving the lodging of administrative and/or end-use securities, which are systematically (100%) checked administratively for completeness and correctness. The more financially important aid schemes are also subject to regular accounting controls performed in situ on commercial and financial documents. 8.4.Application of Chapter III of Title V Regulation (EU) No 1306/2013 (ex-post scrutiny) An ex-post control system is provided for under Regulation (EU) No 1306/2013 in Title V, Chapter III (former Regulation (EC) 485/2008). It provides for an ex-post control system which is a complement to the sectoral control systems described above. The system constitutes an extra layer of control which contributes to the assurance that transactions have been carried out in conformity with the rules or otherwise allows recovering the unduly paid amounts. The ex-post scrutiny is to be carried out by a body in the Member State, which is independent of the departments within the paying agency responsible for the pre-payment controls and the payments. It covers a wide range of CAP subsidies including sector schemes for fruit and vegetables, wine and POSEI subsidies. In fact, the ex-post scrutiny covers all subsidies paid to beneficiaries from EAGF (except payments covered by IACS and those excluded by Article 14 of Regulation (EU) No 907/2014). In 2014, 4 missions were carried out to review the implementation of scrutiny by Member States. Member States scrutiny services completed ex-post controls in respect of the budget items subject to scrutiny for which payments were made in financial year 2012. The annual reports in respect of the respective scrutiny period (July 2013-June 2014) shows that 97% of the planned scrutinies were completed and 3% of planned scrutinies were still ongoing. The regulation also foresees Member States providing mutual assistance in the performance of scrutinies. In the 2013/2014 scrutiny period, nearly 100 such requests were fulfilled. 9.CLEARANCE OF ACCOUNTS 9.1.Conformity clearance - Introduction It is primarily the Member States' responsibility to satisfy themselves that transactions are carried out and executed correctly via a system of control and dissuasive sanctions. Where Member States fail to meet this requirement, the Commission applies financial corrections to protect the financial interests of the EU. The conformity clearance relates to the legality and regularity of transactions. It is designed to exclude expenditure from EU financing which has not been effected in compliance with EU rules, thus shielding the EU budget from expenditure that should not be charged to it (financial corrections). In contrast, it is not a mechanism by which irregular payments to beneficiaries are recovered, which according to the principle of shared management is the sole responsibility of Member States. Financial corrections are determined on the basis of the nature and gravity of the infringement and the financial damage caused to the EU. Where possible, the amount is calculated on the basis of the loss actually caused or on the basis of an extrapolation. Where this is not possible, flat-rates are used which take account of the severity of the deficiencies in the national control systems in order to reflect the financial risk for the EU. Where undue payments are or can be identified as a result of the conformity clearance procedures, Member States are required to follow them up by recovery actions against the final beneficiaries. However, even where this is not possible because the financial corrections only relate to deficiencies in the Member States' management and control systems, financial corrections are an important means to improve these systems and thus to prevent or detect and recover irregular payments to final beneficiaries. The conformity clearance, thereby, contributes to the legality and regularity of the transactions at the level of the final beneficiaries. 9.2.Conformity clearance – Audits and decisions adopted in 2014 9.2.1.Audits The following table presents an overview of the conformity missions and their coverage in respect of financial year 2014, broken down per ABB-activity: Financial Year 2014 ABB 02 ABB 03 ABB 041) Total2) Number of conformity audits with missions carried out3) 16 37 41 94 1) concerns only EAFRD. 2) including 14 audits covering cross-compliance, 2 audits covering entitlements, 5 IT audits and 2 audits covering irregularities. 3) if an audit covers more than one ABB, it is allocated to all ABBs covered by that audit. 9.2.2.Conformity decisions

Three conformity clearance decisions having an impact on the financial year 2014 were adopted involving financial corrections in a number of sectors. These decisions had an overall financial impact by excluding from EU financing a total of EUR 628.13 million: Decision 2013/763/EU of 12/12/2013 – 43rd Decision, financial impact of EUR 293.54 million, Decision 2014/191/EU of 4/04/2014 – 44th Decision, financial impact of EUR 293.24 million, Decision 2015/458/EU of 9/07/2014 – 45th Decision, financial impact of EUR 41.35 million. For the decisions 43 (2013/763/EU) and 44 (2014/191/EU) due to the relative magnitude of corrections compared to certain Member State’s GDP, the Commission decided that corrections amounting to EUR 106.36 million could be paid in 3 equal annual instalments.



The breakdown according to sectors is as follows: (in EUR million) Decision 43 Decision 44 Decision 45 Area aids / Arable crops 265.71 268.00 33.33 Article 69 of Reg.1782/2003 1.77 5.03 0.00 Export Refunds 0.00 0.62 0.00 Financial Audit -0.88 -0.69 0.00 Fruit and vegetables 22.08 7.60 1.40 Irregularities 5.28 8.59 5.11 Livestock premiums 0.01 3.90 0.86 Milk Products 0.00 0.00 0.64 POSEI -0.51 0.00 0.00 Specific support (Art.68 of Reg.73/2009) 0.09 0.19 0.00 TOTAL 293.54 293.24 41.35 Under Regulation (EU) No 1306/2013, an automatic clearing mechanism is applied to irregular payments not recovered 4 years after the establishment of the irregularity, or 8 years after the establishment of the irregularity when the recovery is challenged in national courts. The financial consequences of non recovery are shared by the Member State concerned and the EU on a 50% - 50% basis. The Commission may still decide to charge the Member State for 100 % in cases of negligence by the Member State. Regarding financial year 2013, Member States reported the information about recovery cases by 15 February 2014. The Member States recovered around EUR 94.3 million during financial year 2013 solely for EAGF (EUR 197 million in total with EAFRD and TRDI). The outstanding amount still to be recovered from beneficiaries at the end of that financial year was EUR 1 071.7 million solely for EAGF (EUR 1 318.3 million in total with EAFRD and TRDI). The financial consequences of non recovery for EAGF cases dating from 2009 or 2005 account to EUR 15.6 million to the Member States. During financial year 2013, around EUR 18.7 million was borne by the EU budget for EAGF cases reported irrecoverable. 9.3.Financial clearance 9.3.1.Introduction The financial clearance covers the completeness, accuracy and veracity of paying agencies' accounts as well as the internal control systems set up by these paying agencies. Within this framework, Directorate-General for Agriculture and Rural Development (DG AGRI) pays particular attention to the certifying bodies’ conclusions and recommendations (where weaknesses are found), following their reviews of the paying agencies’ compliance with the accreditation criteria. As part of this review, the DG AGRI departments also cover aspects relating to conformity issues and protecting the financial interests of the EU as regards the advances paid, securities obtained and intervention stocks. The Commission adopts an annual clearance of accounts decision clearing the paying agencies' annual accounts on the basis of the certificates and reports from the certifying bodies, but without prejudice to any subsequent decisions to recover expenditure which proves not to have been in accordance with the EU rules. As from financial year 2014, these accounts are recevied by the Commission by 15 February of the year following the financial year in question. The Commission must clear the accounts and adopt its clearance decision by 31 May of the year following the financial year in question. 9.3.2.Decisions 9.3.2.1.Financial clearance decision for the financial year 2010 On 29 April 2011, the Commission adopted a Decision clearing the annual accounts of 74 paying agencies in respect of their expenditure financed by the EAGF. By means of its decision, it cleared amounts of EUR 38 862.4 million. The accounts of OPEKEPE (Greece) and ARBEA (Italy) amounting to EUR 2 460.9 million are still to be cleared. 9.3.2.2.Financial clearance decision for the financial year 2011 With decision 2012/240/EU adopted on 27 April 2012, the Commission cleared the accounts of all paying agencies for EAGF, except for HAMBURG-JONAS (Germany) and PIAA (Romania). Concerning the accounts of PIAA (Romania), the work is still ongoing. Regarding the accounts of HAMBURG-JONAS (Germany), a consultation from the Legal services concerning irregularities was needed.

9.3.2.3.Financial clearance decision for the financial year 2012 On 26 April 2013, the Commission adopted a Decision clearing the annual accounts of 75 paying agencies in respect of EAGF expenditure. With this decision, expenditure amounting to EUR 43 324 million was cleared. On 5 August 2014, the Commission adopted a Decision clearing the annual accounts of financial year 2012 HELABA (Germany). This decision cleared EUR 220 million of expenditure. The accounts of BIRB (Belgium), and HAMBURG-JONAS (Germany), amounting to EUR 34,5 million, were disjoint and are subject to a later clearance. 9.3.2.4.Financial clearance decision for the financial year 2013 On 29 April 2014, the Commission adopted a Decision clearing the annual accounts of 76 paying agencies in respect of EAGF expenditure. With this decision, expenditure amounting to EUR 40 628.5 million was cleared. The accounts of BIRB (Belgium), OPEKEPE (Greece) and PIAA (Romania), amounting to EUR 3 530 million, were disjoint and are subject to a later clearance. 9.4.Appeals brought before the Court of Justice against clearance decisions 9.4.1.Judgments handed down In the financial year 2014, the Court handed down 8 judgments in appeals brought by the Member States against conformity clearance decisions. In financial year 2014, the Court partially annulled: the Decision 34 (2010/668/EU) by the judgment of 3 July 2014 in case T-16/11 brought by the Netherlands, Decision 38 (2012/336/EU) by the judgment of 10 July 2014 in case T-376/12 brought by Greece. In financial year 2014, the Court rejected appeals brought in the following cases: judgement of 6 March in cases C-248/12 P brought by the UK, judgement of 19 June 2014 in cases C-552/12 P brought by Greece, judgement of 10 July 2014 in cases C-391/13 P brought by Greece, judgement of 15 July 2014 in cases T-463/07 brought by Italy, judgement of 15 July 2014 in cases C-71/13 P brought by Greece, judgement of 15 October 2015 in cases C-417/12 P brought by Denmark. 9.4.2.New appeals In the financial year 2014, 12 new appeals were brought by the Member States against clearance decisions: T-550/13 brought by Greece on 15 October 2013,

T-557/13 brought by Germany on 24 October 2013, T-563/13 brought by Belgium on 24 October 2013, C-610/13 P brought by the Netherlands on 26 November 2013, T-107/14 brought by Greece on 14 February 2014, T-126/14 brought by the Netherlands on 21 February 2014, T-384/14 brought by Italy on 3 June 2014, T-437/14 brought by the UK on 16 June 2014, T-661/14 brought by Latvia on 11 September 2014, T-667/14 brought by Slovenia on 12 September 2014, T-675/14 brought by Spain on 22 September 2014, T-686/14 brought by Italy on 22 September 2014. 9.4.3.Appeals pending The situation as at 15 October 2014 with regard to appeals pending is shown, together with the amounts concerned, in annex 28. 10.RELATIONS WITH PARLIAMENT AND WITH THE EUROPEAN COURT OF AUDITORS 10.1.Relations with Parliament The European Parliament is, together with the Council, part of the EU’s Budgetary Authority. It is, thus, one of the most important discussion partners of the Commission on budgetary matters and, therefore, on the EAGF. Three EP committees are involved in the discussions and the preparation for the plenary on agricultural budgetary matters. These are the Committee on Agriculture and Rural Development, the Committee on Budgets and the Committee on Budgetary Control. The Committee on Agriculture and Rural Development provided with a opinion on the discharge procedure to the Committee on Budgetary Control for the first time during 2014. The Committee on Budgetary Control monitored the correct implementation of the 2012 budget. It was asked to draw up the Parliamentary Decision (OJ L 266, 5 September 2014) by which discharge (in respect to the implementation of the general budget of the European Union for the 2012 financial year) was granted to the Commission on 3 April 2014. 10.2.Relations with the European Court of Auditors

10.2.1.Mission of the European Court of Auditors The European Court of Auditors is the external auditor of the European Union. Articles 285 to 287 of the Treaty on the Functioning of the European Union provide that the Court shall audit the Union finances with a view to improving financial management and reporting on the use of public funds. The Court of Auditors should provide the European Parliament and the Council with a statement of assurance as to the reliability of the accounts and the legality and regularity of the underlying transactions. This statement, which can be complemented by specific assessments for various policy areas, is of prime importance to the European Parliament in its deliberations on granting discharge to the Commission for the implementation of the budget. As part of its work, the Court carries out numerous audits within the Commission services. Court officials frequently visit the Directorate-General for Agriculture and Rural Development (DG AGRI) to gather facts and figures needed for the Court's opinions, as well as for its annual and special reports. In the light of these investigations the Court frequently makes suggestions and recommendations to the Commission on how to improve its financial management and make supervisory and control systems more effective. 10.2.2.Annual Report 2013 Each year the Court of Auditors draws up a report which over several chapters scrutinises the management of the Union's budget for the previous financial year. This report is forwarded to the other institutions of the Union and is published, together with the Commission replies to the observations of the Court of Auditors, in the Official Journal of the European Union. According to international audit practices contradictory meetings are held between the auditor (Court of Auditors) and the auditee (Commission) before the report is published. In these meetings the Court's findings and conclusions and the Commission's arguments and replies are discussed with a view to reaching full agreement on the underlying facts. In the annual report for the 2013 financial year, the activities related to the Directorate-General for Agriculture and Rural Development are covered in two chapters: "Agriculture: market and direct support" (Chapter 3) and "Rural development, environment, fisheries and health" (Chapter 4). For the policy group "Agriculture: market and direct support", based on the results of transaction testing, the Court estimates the most likely error at 3.6%. The error rate for this policy group in the Annual Report 2012 was 3.8%. The Court noted that cross-compliance issues contributed to 0.5 percentage points to the most likely error rate (§3.13), an increase from 0.2 percentage points last year. It also highlighted that, if Member States had used the available information to prevent, detect and correct errors, the most likely error estimated would have been 1.1 percentage points lower (§3.8). The frequency of errors found by the Court has increased from 41% to 61%. The Court estimated that for 33% of the quantified errors, the national authorities had sufficient information to prevent, detect and correct the errors before declaring the expenditure to the Commission. Most of the errors relate to both accuracy and eligibility, notably the overstated number of eligible hectares or animals (frequency 45%) and the ineligible beneficiary/expenditure (frequency 35%) mostly related to market measures. Notwithstanding the persistent weaknesses in excluding ineligible land from the land parcel identification system (LPIS) and in the administrative treatment of claims, the Court considered IACS made a significant contribution to reducing the error rate in the expenditure it covers (§3.29). In its 2012 annual report, the Court had found that the IACS was partially effective in all three paying agencies audited. Whilst recognising that there will inevitably always remain certain weaknesses and imperfections, the Commission services are of the opinion that the IACS as a whole remains a solid system for the management of CAP expenditure. When deficiencies are found, Member States are requested to remedy them. The risk to the EU budget is adequately covered by the conformity clearance procedure. The Court also noted deficiencies in debt management in Italy (AGEA), which could potentially lead to unnecessary charging to the EU budget (§3.25). Moreover, due to significant shortcomings in control procedures, the Court assessed as "not effective" the system applicable to aid for the preliminary recognition of producer groups in the fruit and vegetable sector in Poland (§3.38). In relation to the assessment of the reinforcement of assurance exercise, the Court considered that the audit performed by the Italian audit body was not sufficient to justify the subsequent reduction of the on-the-spot inspection rate by the Italian authorities (§3.35). The assessment of the estimated error rate for the policy group "Rural development, fisheries, environment and health" has remained stable, whereas the assessment of rural development control systems has deteriorated slightly compared to the previous year's annual report. The chapter is also critical of DG AGRI's clearance of accounts system, the reinforcement of assurance procedure and the reservation for rural development in the Annual Activity Report 2013. Based on the results of transaction testing, the Court estimates the most likely error for the policy group "Rural development, fisheries, environment and health" to amount to 6.7%. This represents a decrease of 1.2% points compared to the previous year. The Court noted that cross-compliance issues contributed to 0.2 percentage points to the most likely error rate (§4.15). It also emphasised that if Member States had used the available information to prevent, detect and correct errors, the most likely error estimated would have been 4.7 percentage points lower (§4.8). The frequency of errors found by the Court in rural development has decreased from 63% to 57%. The Court also estimated that for 42% of the quantified errors, the national authorities had sufficient information to prevent, detect and correct the errors before declaring the expenditure to the Commission. Like in previous years, the Court takes the view that the main risk to regularity for the policy group as a whole is that expenditure is ineligible, due to non-compliance with often complex rules and eligibility conditions. Contrary to previous years, the Court has not issued any major negative observation in relation to the clearance of accounts procedure, the audit methodology, or the calculation of the residual error rate. The few methodological recommendations made can be managed by DG AGRI with smaller adaptations to the existing system. The main recommendations by the Court pertaining to agriculture and the respective replies given by the Commission concern the following domains: For "Agriculture: market and direct support" (Chapter 3): Regularity of transactions (3.7-3.15; Annex 3.1); Member States' systems related to regularity of transactions (3.16-3.38; Annex 3.2); Commission's estimates of the residual error rate (3.39-3.43);

Conclusions and recommendations, including the follow-up to previous recommendations (3.44-3.46; Annex 3.3). For "Rural development, environment, fisheries and health" (Chapter 4): Regularity of transactions (4.6-4.16; Annex 4.1); Effectiveness of systems (4.17-4.27; Annex 4.2); DG AGRI's annual activity report (AAR) (4.28-4.30); Conclusions and recommendations, including the follow-up to previous recommendations (4.35-4.37; Annex 4.3). Like in previous years, the Court's statement of assurance is included in Chapter 1 "Statement of Assurance and supporting information". 10.2.3.Special Reports by the Court of Auditors In calendar year 2014, the Court published four special reports covering DG AGRI's activities: Special Report No 22/2014 “Achieving economy: keeping the costs of EU-financed rural development project grants under control” (published on 15/12/2014); Special Report No 9/2014 “Is the EU investment and promotion support to the wine sector well managed and are its results on the competitiveness of EU wines demonstrated?” (published on 01/07/2014); Special Report No 8/2014 “Has the Commission effectively managed the integration of coupled support into the Single Payment Scheme?” (published on 09/07/2014); Special Report No 4/2014 “Integration of EU Water Policy Objectives with the CAP: A partial Success” (published on 13/05/2014). In addition, DG AGRI was also among the DGs concerned by a landscape review "Making the best use of EU money: a landscape review of the risks to the financial management of the EU budget" (published on 25 November 2014). 11.BASIC RULES GOVERNING EAGF AND AMENDMENTS MADE IN 2014 11.1.Checks –Regulation (EU) No 1306/2013 of the European Parliament and of the Council of 17 December 2013 on the financing, management and monitoring of the common agricultural policy and repealing Council Regulations (EEC) No 352/78, (EC) No 165/94, (EC) No 2799/98, (EC) No 814/2000, (EC) No 1290/2005 and (EC) No 485/2008 (OJ L 347, 20.12.2013, p. 549); –Commission Delegated Regulation (EU) No 640/2014 of 11 March 2014 supplementing Regulation (EU) No 1306/2013 of the European Parliament and of the Council with regard to the integrated administration and control system and conditions for refusal or withdrawal of payments and administrative penalties applicable to direct payments, rural development support and cross compliance (OJ L 181, 20.6.2014, p. 48); –Commission Implementing Regulation (EU) No 809/2014 of 17 July 2014 laying down rules for the application of Regulation (EU) No 1306/2013 of the European Parliament and of the Council with regard to the integrated administration and control system, rural development measures and cross compliance (OJ L 227, 31.7.2014, p. 69); –Commission Delegated Regulation (EU) No 907/2014 of 11 March 2014 supplementing Regulation (EU) No 1306/2013 of the European Parliament and of the Council with regard to paying agencies and other bodies, financial management, clearance of accounts, securities and use of euro (OJ L 255, 28.8.2014, p.18);

–Commission Implementing Regulation (EU) No 908/2014 of 6 August 2014 laying down rules for the application of Regulation (EU) No 1306/2013 of the European Parliament and of the Council with regard to paying agencies and other bodies, financial management, clearance of accounts, rules on checks, securities and transparency (OJ L 255, 28.8.2014, p.59); –Regulation (EU) No 1307/2013 of the European Parliament and of the Council of 17 December 2013 establishing rules for direct payments to farmers under support schemes within the framework of the common agricultural policy and repealing Council Regulation (EC) No 637/2008 and Council Regulation (EC) No 73/2009 (OJ L 347, 20.12.2013, p. 608); –Commission Delegated Regulation (EU) No 639/2014 of 11 March 2014 supplementing Regulation (EU) No 1307/2013 of the European Parliament and of the Council establishing rules for direct payments to farmers under support schemes within the framework of the common agricultural policy and amending Annex X to that Regulation (OJ L 181, 20.6.2014, p. 1); –Regulation (EU) No 1308/2013 of the European Parliament and of the Council of 17 December 2013 establishing a common organisation of the markets in agricultural products and repealing Council Regulations (EEC) No 922/72, (EEC) No 234/79, (EC) No 1037/2001 and (EC) No 1234/2007 (OJ L 347, 20.12.2013, p. 671); –Regulation (EU) No 1310/2013 of the European Parliament and of the Council of 17 December 2013 laying down certain transitional provisions on support for rural development by the European Agricultural Fund for Rural Development (EAFRD), amending Regulation (EU) No 1305/2013 of the European Parliament and of the Council as regards resources and their distribution in respect of the year 2014 and amending Council Regulation (EC) No 73/2009 and Regulations (EU) No 1307/2013, (EU) No 1306/2013 and (EU) No 1308/2013 of the European Parliament and of the Council as regards their application in the year 2014 (OJ L 347, 20.12.2013, p. 865). 11.2.Clearance of accounts –Regulation (EU) No 1306/2013 of the European Parliament and of the Council of 17 December 2013 on the financing, management and monitoring of the common agricultural policy and repealing Council Regulations (EEC) No 352/78, (EC) No 165/94, (EC) No 2799/98, (EC) No 814/2000, (EC) No 1290/2005 and (EC) No 485/2008 (OJ L 347, 20.12.2013, p. 549); –Commission Delegated Regulation (EU) No 907/2014 of 11 March 2014 supplementing Regulation (EU) No 1306/2013 of the European Parliament and of the Council with regard to paying agencies and other bodies, financial management, clearance of accounts, securities and use of euro (OJ L 255, 28.8.2014, p.18); –Commission Implementing Regulation (EU) No 908/2014 of 6 August 2014 laying down rules for the application of Regulation (EU) No 1306/2013 of the European Parliament and of the Council with regard to paying agencies and other bodies, financial management, clearance of accounts, rules on checks, securities and transparency (OJ L 255, 28.8.2014, p.59). 11.3.Public storage (a) Basic rules –Regulation (EU) No 1306/2013 of the European Parliament and of the Council of 17 December 2013 on the financing, management and monitoring of the common agricultural policy and repealing Council Regulations (EEC) No 352/78, (EC) No 165/94, (EC) No 2799/98, (EC) No 814/2000, (EC) No 1290/2005 and (EC) No 485/2008 (O.J. L 347 of 20/12/2013, p. 549); –Regulation (EU) No 1308/2013 of the European Parliament and of the Council of 17 December 2013 establishing a common organisation of the markets in agricultural products and repealing Council Regulations (EEC) No 922/72, (EEC) No 234/79, (EC) No 1037/2001 and (EC) No 1234/2007 (O.J. L 347 of 20/12/2013, p. 671); –Council Regulation (EU) No 1370/2013 of 16 December 2013 determining measures on fixing certain aids and refunds related to the common organisation of the markets in agricultural products (O.J. L 346 of 20/12/2013, p. 12); –Regulation (EU) No 223/2014 of the European Parliament and of the Council of 31 March 2014 on the Fund for European Aid to the Most Deprived (O.J. L 72 of 12/3/2014, p 1); –Commission Delegated Regulation (EU) N° 906/2014 supplementing Regulation (EU) N° 1306/2013 of the European Parliament and of the Council with regard to public intervention expenditure (O.J. L 255 of 28/8/2014, p. 1); –Commission Regulation (EU) No 1272/2009 of 11 December 2009 laying down common detailed rules for the implementation of Council Regulation (EC) No 1234/2007 as regards buying-in and selling of agricultural products under public intervention (OJ L349, 29/12/2009, p.1.). (b) Depreciation on buying in –No depreciation on buying-in was fixed for the 2014 accounting year. (c) Additional depreciation at the end of the financial year

–No depreciation at the end of the 2014 financial year was fixed; (d) Uniform interest rate for reimbursing Member States' financing costs –Commission Implementing Regulation (EU) No 986/2013 of 14 October 2013 fixing the interest rates to be used for calculating the costs of financing intervention measures comprising buying-in, storage and disposal for the 2014 EAGF accounting year. (OJ L 273, 15/10/2013, p. 25). (e) Standard amounts for reimbursing physical storage operations –Commission Implementing Decision C(2013) 5574 of 30 August 2013 (not published) fixing, for the 2014 financial year, the standard amounts to be used for financing physical operations arising from the public storage of agricultural products. (f) Declaration rules –Commission Delegated Regulation (EU) N° 907/2014 of 11 March 2014 supplementing Regulation (EU) N° 1306/2013 of the European Parliament and of the Council with regard to paying agencies and other bodies, financial management, clearance of accounts, securities and use of euro (O.J. L 255 of 28/8/2014, p.18); –Commission Implementing Regulation (EU) N° 908/2014 of 6 August 2014 laying down rules for the application of Regulation (EU) N° 1306/2013 of the European Parliament and of the Council with regard to paying agencies and other bodies, financial management, clearance of accounts, rules on checks, securities and transparency (O.J. L 255 of 28/8/2014, p.59). 12.ANNEXES ANNEXES General 1. EAGF budgetary procedure for 2014 2. Part of EAGF budget in the EU budget, 2008 to 2014 Cash position and management of appropriations 3. Summary of outturn for 2014 4. Monthly reimbursements to Member States in the 2014 financial year 5. Payments under direct management by the European Commission in the 2014 financial year (Differentiated Appropriations) 6. Payments under direct management by the European Comm. in the 2014 financial year (Non-Differentiated Appropriations) Budget outturn 7. EAGF 2014 Analysis of budget execution

8. EAGF 2014 Analysis of execution of assigned revenue C4 9. EAGF 2014 Analysis of execution of assigned revenue C5 10. EAGF 2014 Expenditure for direct aids by measure and by Member State 11. EAGF 2014 Expenditure for export refunds by Member State 12. EAGF 2014 Expenditure for intervention in storage 13 EAGF 2014 Expenditure by Member State, by item and by fund source 14. EAGF 2014 Breakdown of expenditure by type 15. EAGF 2014 Expenditure by sector according to the economic nature of the measures 16. EAGF 2014 Quantity & value of products in public intervention stores 17. Evolution of EAGF Expenditure by article of the budget. Financial years 2008 to 2014 18. Evolution of EAGF Expenditure by sector and measure. Financial years 2008 to 2014 19. Evolution of EAGF Expenditure by sector and in % terms. Financial years 2008 to 2014 20. Evolution of EAGF Expenditure by Member State & in % terms. Financial years 2008 to 2014 21. Evolution of EAGF Direct aids expenditure by measure. Financial years 2008 to 2014 22. Evolution of EAGF Direct aids expenditure by sector. Financial years 2008 to 2014 23. Evolution of EAGF Direct aids expenditure by article of budget. Financial years 2008 to 2014 24. Evolution of EAGF Export refunds expenditure by sector. Financial years 2008 to 2014 25. Evolution of EAGF Export refunds expenditure by Member State. Financial years 2008 to 2014 26. Evolution of EAGF Storage expenditure. Analytical table. Financial years 2008 to 2014 27. Evolution of the breakdown of EAGF expenditure. Financial years 2008 to 2014

Clearance of accounts 28. Appeals against Clearance of Accounts Decisions pending on 15 October 2014 29. Financial corrections (Decisions 1 - 45) by decision and financial year