WRITTEN QUESTION E-1481/03

by Jan Mulder (ELDR) to the Council

(2 May 2003)

Subject: Protecting financial interests in the context of agricultural expenditure

On 30 January 2003 Parliament adopted report A5-0447/2002 on reform of the procedure of the clearance of accounts (P5-TAPROV(2003)0028). In this report (paragraph 28) Parliament insists that candidate countries should not benefit from support systems under the CAP if IACS, in its simplified form referred to in point 4.5.3. of the Commission Communication Enlargement and Agriculture, is not operational. It also asks the Commission (paragraph 36) to suspend or reduce substantially payments under the CAP covered by IACS to Member States which have not implemented IACS until this system has been fully implemented.

1. Can the Council state its attitude to the above viewpoints of Parliament, inter alia in the light of the forthcoming enlargement of the Union and the need to protect the EU's financial interests?

2. Does the Council agree that as far as the measures taken to protect the Union's financial interests are concerned, no distinction should be made between the present and the new Member States?

Parliament also calls on the Council in the abovementioned report (paragraph 33) to approve the Commission's proposal to extend the period to which a correction to expenditure may be applied from the current 24 months to 36 months(1). Parliament approved this proposal on 24 September 2002.

3. Can the Council say what its attitude is to this Commission proposal and when it intends to take a decision on it?

(1) COM(2002) 293.

Reply

(2 October 2003)

1. The Council would remind the Honourable Member that, as the EAGGF accounts for 45 % of the European Union's budget, it is essential to provide it with a mechanism that guarantees proper implementation of the resultant expenditure and an efficient system of accounts clearance. The Integrated Administration and Control System (IACS), which was introduced following the 1992 CAP reform and which at present forms the main instrument for administering the bulk of CAP expenditure, meets these objectives.

2. The Council underlines the importance it attaches to the protection of the EU financial interests. Therefore, particular attention has been devoted to these issues in the framework of the Accession negotiations both in chapter 7 (Agriculture) and in chapter 28 (Financial Control).

The acceding States have achieved substantial progress in this key area of the acquis and commitments undertaken by the acceding States in the negotiations, their alignment with the acquis, as well as the strengthening of their administrative capacity in order to effectively implement the relevant acquis upon accession, are closely monitored by the Union.

Furthermore, it is also clear that the acquis, including the terms agreed in the negotiations as enshrined in the Treaty and Act of Accession, to which the European Parliament has given its assent, has to be fully respected. On agricultural expenditure these terms provide for the acceding States the option of applying the standard direct payments system applicable in the current EU if they are ready to effectively implement the acquis, or to use the simplified scheme under the conditions laid down in the Act of Accession. This simplified scheme should be available for three years with the possibility of being renewed twice by one year. During the period of application of the simplified scheme, acceding States would have to take the necessary steps to set up the IACS implementation structures required for properly running the standard system of direct payments so as to be ready to apply this system immediately after the expiration of the transitional period.

3. Finally, in reply to the last question put by the Honourable Member, the Commission has in fact presented to the Council a proposed amendment to Regulation No 1258/99 on the financing of the CAP extending from 24 to 36 months the period during which adjustment of expenditure can be applied. The Council bodies examined this proposal, most recently on 7/8 October 2002, and were unable to agree to it.