WRITTEN QUESTION E-3505/00

by Piia-Noora Kauppi (PPE-DE) to the Commission

(10 November 2000)

Subject: Monitoring of farm subsidies and policy on penalties

Finland is likely to have to repay around 25 million marks in agricultural subsidies received from the EU, on account of inadequate monitoring. This sum relates to the whole period of Finland's membership of the EU.

Our Minister of Agriculture, Kalevi Hemilä, has publicly complained that the erroneous allocation of subsidies was caused by the EU's extremely strict, bureaucratic and precisely regulated monitoring.

In his opinion, unreasonable penalties are being imposed for minor faults in the administration of subsidies. If a single cow's eartag is missing, all the cattle may be denied subsidies. Similarly, if a stone ruin or a small barn is omitted from surface area calculations, a whole area of arable farmland may be declared ineligible for subsidy.

The Ministers of Agriculture have accordingly proposed to the Commission that the penalty system be simplified.

1. Has a working party already been set up to plan a simplified penalty system?

2. What is the Commission's view of the proposal that the loss of subsidy could apply only to an individual case on each occasion?

Answer given by Mr Fischler on behalf of the Commission

(9 January 2001)

With regard to comments on the imposition of unreasonable penalties, the Commission would emphasise the importance attached to the respect of proportionality of sanctions in the Integrated administration and central system (IACS) legislation. Nevertheless, there is a clear need for a sanctions system to ensure the proper management and safeguarding of Community funds. Persons claiming Community aids should respect the rules, especially those related to eligibility for aids, and those found to be in non-compliance should be penalised proportionately. In respect of the examples cited in the Honourable Member's question, the Commission is unaware of any sanctions being applied in the way described (i.e. total refusal for a relatively minor irregularity), although it confirms that a percentage reduction might be applicable to the overall aid application.

The Commission would inform the Honourable Member that:

- the Commission organises regular committee and other experts group meetings to discuss and amend Commission 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(1) in collaboration with the Member States. These discussions are expected to intensify in the course of 2001. Moreover, an ad-hoc working group as referred to in the Council declaration of 25 October 2000 charged with the task to co-ordinate the analysis and the discussion of proposals related to simplification in general had its first meeting on 11 December 2000;

- the Commission cannot agree with the concept that sanctions should be limited only to the offending element, for example one ineligible animal, as this would result in aid applicants being in a no-lose situation, possibly encouraging wilful non-compliance with governing rules.

(1) OJ L 391, 31.12.1992.