Sweden has not taken any action based on the observation.

The Member States’ contributions were recalculated taking into account the following: — A reduced VAT call rate of 0,15 % applies to Germany, the Netherlands, and Sweden, while the call rate for the other Member States remains 0,3 %.

Sweden has not taken any action based on the observation.

The amendments entailed by the entry into force of the new system of EU own resources were incorporated into the budgeting for Denmark’s contribution to the EU in 2016.

The Member States’ contributions were recalculated taking into account the following: — Lump-sum reductions in GNI-based payments were given to Austria, Denmark, the Netherlands and Sweden.

No action necessary. UK included in table of impact on MS contributions of ‘own resources’ decision.

Sweden has not taken any action based on the observation.

Reduction in the percentage of Traditional Own Resources (TOR) retained by the Member States to cover collection costs. This percentage now stands at 20 %.

Reply of the Ministry of Finance (MF): On 29 December 2016, Slovenia made a one-off payment as a result of the retroactive effect of the entry into force of the new Decision on the system of own resources of the European Union.

Following the entry into force of Decision 335/2014 on the system of own resources of the European Union, the general impact of the retroactive application for 2014 and 2015 was an increase in Romania’s contribution to the EU budget. The amount relating to this increase was made available to the Commission on 3 January 2017.

The new Own Resources Decision (Decision 2014/335/EU, Euratom) entered into force on 1 October 2016, with retroactive effect from 1 January 2014, once its ratification by the 28 Member States was complete. In Portugal Decision 2014/335/EU was approved by Resolution No 132/2015 of the Assembly of the Republic of 19 June 2015, ratified by Presidential Decree No 119/2015 of 7 October 2015. For Portugal the retroactive effect of the entry into force of the new Decision amounted to EUR 77 069 484 in the years 2014 and 2015.

The new Council Decision of 26 May 2014 on the system of own resources of the European Union affected Latvia’s payments in 2014 by EUR 2 420 460 and in 2015 by EUR 4 320 280 – a total of EUR 6 740 740. This retroactive figure, representing the difference between the amounts Latvia would have paid under the 2014 Decision and the amounts it actually paid on the basis of Council Decision of 7 June 2007 on the system of the European Communities’ own resources, was transferred to the EU budget on 30 December 2016 as an advance payment.

Hungary is paying its contribution to the EU budget in line with the new own resources decision.

France had to pay an additional EUR 1.1 billion in 2016 under the new decision on the system of own resources on Member State contributions in 2014 and 2015.

The amendments entailed by the entry into force of the new system of EU own resources were incorporated into the budgeting for Denmark’s contribution to the EU in 2016.

Further to the entry into force of Council Decision 2014/335/EU, Euratom on own resources, Croatia has fulfilled its obligations and made the payments to the EU budget on 23 December 2016 and 2 January 2017.

Impact of the new own-resources decision on individual Member States’ contributions in 2014 and 2015

Sweden has not taken any action based on the observation.

Customs Agency The Bulgarian customs authorities accept the ЕСA’s preliminary findings from the audit in respect of the DAS 2016.

Applying the audit approach and methods set out in Annex 1.1, in 2016 we examined the following for revenue: the systems for TOR accounting, including postclearance audits, in three selected Member States (Belgium, Bulgaria and Sweden).

The CSO plan to continue delivery of the remaining recommendations over the second half of 2017 and into 2018 and progress on this work will be reviewed by the group.

It is designed to be more closely related to employment growth as it is focuses on the physical capital used to produce domestic output.

Modified Total Domestic Demand is defined as Total Domestic Demand less the effects of the trade in aircraft by aircraft leasing companies and the imports of intellectual property.

Quarterly national accounts (QNA) releases now also include a modified Total Domestic Demand indicator. This time series, available from 1997, helps to give users an insight into underlying domestic demand.

GNI* is defined as GNI less the effects of the profits of re-domiciled companies and the depreciation of intellectual property products and aircraft leasing companies. It is designed as a supplementary indicator of the level of the Irish economy for use in ratio analysis as an alternative to GDP. For instance, in 2016, the government debt to GDP ratio stood at 73%, while the result for the equivalent debt to GNI* ratio was 106%.

In the annual results, the transition from a GDP level of €275.6 billion in 2016 to a modified GNI (or GNI*) level of €189.2 billion is shown. The time series is available from 1995 onwards.

The national accounts results published on 14 July 2017 included preliminary estimates for key recommendations made by the Economic Statistics Review Group (ESRG), convened by the Central Statistics Office (CSO) last autumn and which reported in December 2016. These were an indicator of the overall size or level of the economy (modified Gross National Income or 'GNI*') and a modified total domestic demand indicator that focuses on activity within the Irish economy. Both are designed to exclude significant globalisation effects that disproportionately affect the Irish economic results.

We compared forecast with provisional GNI data for all Member States. The differences were not generally significant. However, Ireland’s reported GNI increased very significantly in 2015. This was a result of multinational companies relocating R&D assets to the country (see Box 4.4).

The CSO plan to continue delivery of the remaining recommendations over the second half of 2017 and into 2018 and progress on this work will be reviewed by the group.

It is designed to be more closely related to employment growth as it is focuses on the physical capital used to produce domestic output.

Modified Total Domestic Demand is defined as Total Domestic Demand less the effects of the trade in aircraft by aircraft leasing companies and the imports of intellectual property.

Quarterly national accounts (QNA) releases now also include a modified Total Domestic Demand indicator. This time series, available from 1997, helps to give users an insight into underlying domestic demand.

GNI* is defined as GNI less the effects of the profits of re-domiciled companies and the depreciation of intellectual property products and aircraft leasing companies. It is designed as a supplementary indicator of the level of the Irish economy for use in ratio analysis as an alternative to GDP. For instance, in 2016, the government debt to GDP ratio stood at 73%, while the result for the equivalent debt to GNI* ratio was 106%.

In the annual results, the transition from a GDP level of €275.6 billion in 2016 to a modified GNI (or GNI*) level of €189.2 billion is shown. The time series is available from 1995 onwards.

The national accounts results published on 14 July 2017 included preliminary estimates for key recommendations made by the Economic Statistics Review Group (ESRG), convened by the Central Statistics Office (CSO) last autumn and which reported in December 2016. These were an indicator of the overall size or level of the economy (modified Gross National Income or 'GNI*') and a modified total domestic demand indicator that focuses on activity within the Irish economy. Both are designed to exclude significant globalisation effects that disproportionately affect the Irish economic results.

The CSO plan to continue delivery of the remaining recommendations over the second half of 2017 and into 2018 and progress on this work will be reviewed by the group.

It is designed to be more closely related to employment growth as it is focuses on the physical capital used to produce domestic output.

Modified Total Domestic Demand is defined as Total Domestic Demand less the effects of the trade in aircraft by aircraft leasing companies and the imports of intellectual property.

Quarterly national accounts (QNA) releases now also include a modified Total Domestic Demand indicator. This time series, available from 1997, helps to give users an insight into underlying domestic demand.

GNI* is defined as GNI less the effects of the profits of re-domiciled companies and the depreciation of intellectual property products and aircraft leasing companies. It is designed as a supplementary indicator of the level of the Irish economy for use in ratio analysis as an alternative to GDP. For instance, in 2016, the government debt to GDP ratio stood at 73%, while the result for the equivalent debt to GNI* ratio was 106%.

In the annual results, the transition from a GDP level of €275.6 billion in 2016 to a modified GNI (or GNI*) level of €189.2 billion is shown. The time series is available from 1995 onwards.

The national accounts results published on 14 July 2017 included preliminary estimates for key recommendations made by the Economic Statistics Review Group (ESRG), convened by the Central Statistics Office (CSO) last autumn and which reported in December 2016. These were an indicator of the overall size or level of the economy (modified Gross National Income or 'GNI*') and a modified total domestic demand indicator that focuses on activity within the Irish economy. Both are designed to exclude significant globalisation effects that disproportionately affect the Irish economic results.

The Commission reacted promptly to the increase in GNI data submitted by Ireland, and verified the reasonableness of the methodology used for compiling Ireland’s national accounts. The Commission also asked Member States to complete a questionnaire on R&D and other issues relating to multinational activities. The Member States’ replies indicated that they had insufficient information in this regard. As a result, the Commission had only limited information about how these issues had been dealt with in the compilation of GNI.

The ECA’s observations are correct, and the amounts have been made available to the Commission (reporting periods 201609 and 201701)

Customs Agency The Bulgarian customs authorities accept the ЕСA’s preliminary findings from the audit in respect of the DAS 2016, specifically as regards the risk of error inherent in the manual compilation of the data from the integrated customs information system (BIMIS) for the B accounts. As part of the project to re-configure the national system for making declarations, one component of which is the module for managing customs debt and traditional own resources, consideration is being given to automating the process, in order to reduce manual operations and the risk of human error to a minimum.

Reply from SPF Finances [the Federal Public Finance Service]: In 2014 Belgium introduced an automated system (debt database) for recording debts in the B account. This system provides for much more efficient monitoring of the debts registered. The system still needs to be complemented by an automated system for ongoing investigations in respect of traditional own resources. This is currently under development. The remarks on the B account concern mainly very old files. Furthermore, when assessing these files, the Commission adopts a stricter approach than the one taken at the moment of registration.

We examined the collection of TOR in Belgium, Bulgaria and Sweden. We focused our analysis on: the compilation of the A accounts; the procedures for collecting the amounts registered in the B accounts; and post-clearance audits (see paragraph 4.6). We did not identify any significant problems in the compilation of the A accounts, but we noted recurrent shortcomings in the management of the B accounts.

Sweden has not taken any action based on the observation.

Customs Agency In preparing, carrying out and reporting on the checks that form part of post-clearance control, the Bulgarian customs authorities apply the Methodological guide for customs checks in the framework of post-clearance control approved by the Director of the Customs Agency, which is in line with the Commission’s customs audit guide.

Ex post checks are also carried out based on the risk level established for the consignment and the operator (CAP indicators: R.1.6.6.1, R.1.6.6.2, R.1.6.6.3 and R.1.6.6.4)

ABC controls are also carried out on the basis of local risk analyses (indicators R.1.7.8.1 and R.1.7.8.2).

Reply from SPF Finances [the Federal Public Finance Service]: In the 2017 NOP (as in the 2016 NDP) indicators are provided for carrying out ABC controls and follow-up audits, which are determined in accordance with the risk level of the operators concerned in the medium-sized operator category. (ABC and follow-up audits: indicators R.1.7.6.1, R.1.7.6.2, R.1.7.6.3 and R.1.7.6.4).

As in previous years, we found weaknesses in how Member States identify and select importers to undergo postclearance audits, and in how these audits are carried out. Sweden and Bulgaria had set out their framework of post-clearance controls in accordance with the Commission’s customs audit guide. However, in Belgium post-clearance controls were selected based on the characteristics of individual transactions, not on the risk profiles of companies; and we observed that post-clearance audits were not generally carried out.

MF reply: Slovenia considers in this respect that it involves an error of European Commission, which submitted incorrect information to the EDF regarding post-clearance audits. Slovenia submitted the required reports to the Commission both as part of the 2015 Annual Report, which was submitted to the European Commission on 9 March 2016, as well as subsequently after a notice from the Commission at the meeting of the Advisory Committee on Own Resources (ACOR). In its letter of 14 October 2016, Slovenia officially submitted the additional information regarding the number of staff in the customs authorities carrying out post-clearance audits. Slovenia also informed the Commission and the EDF of the error in the report at the Budget Committee meeting of 6 October 2017.

We would point out that the specific national customs legislation is currently being updated. Should it be deemed necessary, this aspect will be analysed with a view to taking the necessary measures to apply best practices at EU level in subsequent customs checks.

Moreover, after the publication in Brussels, on 11 March 2016, of the document TAXUD/B2/047/2011 – Rev.6, on GUIDANCE for the authorisation of AUTHORISED ECONOMIC OPERATORS (approved by CCC-GEN (subsection on AEO) on 11 March 2016), Order No 1486/2016 of 29 April 2016 was drawn up and implemented approving the Technical rules for granting authorised economic operator status. These rules regulate the pre-audit of applicants for AEO authorisations, which consists of verifying the system of the economic operators. If there are irregularities in the application of the customs legislation in the sample checked, the specific issues are verified in a subsequent transaction-based customs check.

However, in order to improve the quality and efficiency of the re-verifications of customs declarations submitted and accepted by the Romanian customs authorities, after monthly meetings to analyse the activities at national level, in the second half of 2016 training sessions were given in accordance with the schedules in the Annex. The training areas included the following: b. Development of ex-post check competences in accordance with the guide to customs audits drawn up by TAXUD in 2014 and the Commission’s Working Document of 4 July 2016.

Concerning the amendment of the customs declarations on the basis of the audit of the system of the economic operator, this method of re-verifying customs declarations has never been applied in Romania, and at present the necessary legislation for implementing and carrying out these checks does not exist.

In accordance with the definitions accepted at the European Commission, Romania carries out transaction-based ex-post checks in order to recover circumvented customs duties. The results of these checks are periodically reported to the Commission, as requested, as ‘other ex-post checks’.

Details are given below of Portugal’s control activities as contained in the annual report provided for in Article 17(5) of Regulation (EC, Euratom) No 1150/2000 of 22 May 2000 for 2015 and 2016, which include the customs import declarations subject to post-clearance checks (number of items):

On 27 April 2017 the Customs Agency provided all the customs offices with clarification on the scope of application and the methodologies for post-clearance audits (PCA). Operational instructions for PCA were added on 18 August 2017.

Ex post checks are also carried out based on the risk level established for the consignment and the operator (CAP indicators: R.1.6.6.1, R.1.6.6.2, R.1.6.6.3 and R.1.6.6.4)

ABC controls are also carried out on the basis of local risk analyses (indicators R.1.7.8.1 and R.1.7.8.2).

Reply from SPF Finances [the Federal Public Finance Service]: In the 2017 NOP (as in the 2016 NDP) indicators are provided for carrying out ABC controls and follow-up audits, which are determined in accordance with the risk level of the operators concerned in the medium-sized operator category. (ABC and follow-up audits: indicators R.1.7.6.1, R.1.7.6.2, R.1.7.6.3 and R.1.7.6.4).

In July 2016 the Commission noted that six Member States either did not carry out any post-clearance audits or did not provide any information about these audits. These Member States accounted for about 20 % of all customs duties collected in the EU. Belgium, Estonia, Italy, Portugal, Romania and Slovenia.

The UK does not accept OLAF’s estimate of the evaded duty and is engaging with the Commission and OLAF on this issue. The relevant UK authorities are taking all necessary steps to respond to the threat of fraud.

The information provided in the 2016 annual activity reports published by DG Budget and Eurostat corroborates our observations and conclusions. We note that DG Budget had made a reservation on TOR not collected by the United Kingdom. This was the result of an OLAF investigation into the valuation of imports of textiles and footwear from China; OLAF issued its final report and recommendations in March 2017. The amount of TOR concerned by the reservation is yet to be confirmed using information to be supplied by the United Kingdom.

Annex 4.2

Numbers of outstanding GNI reservations, VAT reservations and for TOR open points by MS at 31.12.2016