WRITTEN QUESTION E-3120/97 by Daniela Raschhofer (NI) to the Commission (13 October 1997)

Subject: Answer to Question E-1849/97

The answer to question E-1849/97 ((OJ C 76, 11.3.1998, p. 59. )) states that the scope of incorrectly declared surfaces as well as the resulting impact on the Community [budget] are difficult to quantify. The Commission thus confirms that although it is difficult to do so, the impact can be quantified. Unfortunately the impact was still not quantified in the answer.

Furthermore the question refers to current penalties and not proposals on penalties, as described in the answer.

I must therefore repeat my questions even if the data are to be forwarded directly to me, as I am entitled to an answer to my questions. The Commission should not be able to avoid answering by referring to a direct forwarding of data to Members.

What is the percentage of false returns in Austria?

Which EU country has the highest percentage and which has the lowest percentage?

What is the level of damage caused to the EU as a result?

What penalties can the Commission impose, and what scope does it have for compensation, in such instances?

Answer given by Mr Fischler on behalf of the Commission (13 November 1997)

The Commission considers that it gave a full answer to the Honourable Member's written question No E-1849/97, which consisted of nine sub-questions. In addition to the body of the answer (1 page) it forwarded data (12 pages in all) direct to the Honourable Member and to Parliament's Secretariat in response to one sub-question. The Commission has to forward data direct when it is too voluminous to include in the body of an answer.

Implementation of the aid measures is a matter for the Member States, whereas the task of the Commission is to ensure that this is done correctly. As already stated in the answer to the Honourable Member's written question No E-1849/97, the proportion of incorrect applications established by the national administrations during processing is reported to the Commission annually by the Member States in the relevant statistics submitted within the application of Regulation (EEC) No 3887/92 of 23 December 1992 laying down detailed rules for applying the integrated administration and control system for certain Community aid schemes ((OJ L 391, 31.12.1992. )). The figures for 1995 were sent direct to the Honourable Member and to Parliament's Secretariat for information. Figures are not yet completely available on the volume of incorrect applications in 1996.

A simple comparison between the Member States concerning discrepancies in areas detected is problematic since no direct conclusions can be drawn from this information about the quality of implementation of the aid system in the Member States. According to the preliminary information received, the largest percentage of incorrectly declared areas for 1996 including application of sanctions as result of field inspections was established in Italy at 5.2%. Ireland with O.13% was the Member State with the lowest percentage of incorrect declared areas. In Austria a total of 174 602 area aid applications were submitted in 1996. All these applications were subjected to an administrative check, and for 13 858 applications an on-farm inspection was carried out. In this way a total of 2 088 hectares were found to have been incorrectly declared. This is equivalent to 0.18% of the total area for which aid was claimed.

There is no financial risk to the Community budget from the discrepancies detected by the Member States since they are discovered before carrying out the payment and they are taken into account in calculating the aid. The real risk for the Community budget lies in the irregularities that go undetected.

Community legislation aims to reduce this risk in several complementary ways. Firstly, Community law provides for additional sanctions for discrepancies in declared area, inter alia, in Article 9 of Regulation (EEC) No 3887/92. The deterrent effect of these strict penalty clauses should not be underestimated in assessing the risk. Indeed, the area actually determined is to be reduced by twice the difference detected if this is more than 3% or 2 hectares up to 20%. In extreme cases the prescribed reduction can lead to total loss of aid for the scheme in question in the current and the following year. Equally, the rules of Regulation (EC) No 2988/95 on the protection of the European Communities' financial interests ((OJ L 312, 23.12.1995. )) are to be considered which foresee general rules relating to homogenous checks and to administrative measures and penalties concerning irregularities with regard to Community law. Finally, Member States are obliged, according to Article 8 of Regulation (EC) No 729/70 of the Council of 21 April 1970 on the financing of the common agricultural policy ((OJ L 94, 28.4.1970. )) to prevent and deal with irregularities and to recover sums lost as a result of irregularities. Irregularities found have to be communicated to the Commission under Regulation (EEC) No 595/91 of 4 March 1991 concerning irregularities and the recovery of sums wrongly paid in connection with the financing of the common agricultural policy and the organisation of an information system in this field and repealing Regulation (EEC) No 283/72 ((OJ L 67, 14.3.1991. )).

The Commission has also undertaken numerous checks in all Member States. As already explained in the answer to written question No E-1849/97, where these have shown that Community regulations are not being properly applied, financial corrections have been proposed in the framework of the clearance of accounts procedure. This does not mean that financial corrections are not to be made until some future date, but merely that the clearance of accounts procedures for previous years have not yet been completed. As the final decision has not been taken yet by the Commission, information about possible corrections cannot be given at this stage.

Financial risks for the Community arising from a generally poor performance in implementing Community law in a given Member State cannot always be accurately evaluated. For this reason, the Commission estimates these risks and, in the light of the seriousness of infringements, proposes flat-rate corrections of 2, 5 or 10% of expenditure. In exceptional circumstances, all the appropriate expenditure can be corrected.