Council Regulation (EC) No 1258/1999 of 17 May 1999 on the financing of the common agricultural policy
Date: 1999-05-17
Institutions: Council of the European Union
Subjects: EAGGF, EU financing, aid to agriculture, common agricultural policy

26.6.1999

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Official Journal of the European Communities

L 160/103

COUNCIL REGULATION (EC) No 1258/1999

of 17 May 1999

on the financing of the common agricultural policy

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community, and in particular Article 37 thereof,

Having
regard
Commission (1),

to

the

proposal

from the

Having regard to the opinion of
Parliament (2),

the European

certain

information on the common agricultural policy
and
be
financed by the (cid:28)Guarantee’ section of the Fund
in order to achieve the objectives set out
in
Article 33(1) of the Treaty;

evaluation

actions

should

(3) Whereas the (cid:28)Guidance’ section of

the Fund
should finance expenditure for certain rural
regions whose
development measures
development is lagging behind as well as for the
rural development Community initiative;

in

Having regard to the opinion of the Economic and
Social Committee (3),

Having regard to the opinion of
Auditors (4),

the Court of

(4) Whereas the Commission is responsible for the
administration of the Fund and whereas close
cooperation between Member States and the
Commission is provided for within a committee
for the Fund;

Council

(1) Whereas by means of Regulation No 25 on the
financing of the common agricultural policy (5),
European
established
the
Agricultural Guidance and Guarantee Fund
(EAGGF), hereinafter referred to as (cid:28)the Fund’,
which forms part of the general budget of the
European Communities; whereas that Regulation
laid down the principles which should apply for
the financing of the common agricultural policy;

the

(2) Whereas at the single market stage, in view of
the fact that price systems are standardised and
the agricultural policy is a Community policy,
the financial consequences devolve upon the
Community; whereas,
in accordance with that
laid down in Article 2(2) of
principle as
Regulation No 25, refunds on exports to third
stabilising
countries,
intervention aimed at
agricultural
development
measures, specific veterinary measures as laid
down in Council Decision 90/424/EEC of 26
June 1990 on expenditure in the veterinary
field (6), measures
provide

markets,

intended

rural

to

(1) OJ C 170, 4.6.1998, p. 83.
(2) Opinion delivered on 6 May 1999 (not yet published in

the Official Journal).

(3) OJ C 407, 28.12.1998, p. 222.
(4) OJ C 401, 22.12.1998, p. 3.
(5) OJ L 30, 20.4.1962, p. 991/60. Regulation as last
amended by Regulation (EEC) No 728/70 (OJ L 94,
28.4.1970, p. 9).

(6) OJ L 224, 18.8.1990, p. 19. Decision as last amended by

Decision 94/370/EC (OJ L 168, 2.7.1994, p. 31).

(5) Whereas

have

been made; whereas

the responsibility for checking the
Fund's Guarantee Section expenditure lies, in the
first place, with the Member States, which
designate the authorities and bodies empowered
to effect expenditure; whereas the Member States
must carry out this task fully and effectively;
whereas the Commission, being responsible for
implementing the Community budget, must
verify the conditions under which payments and
checks
the
Commission can only finance expenditure where
those conditions offer all necessary guarantees
regarding compliance with Community rules;
system of
whereas,
management of Community expenditure,
is
essential that the Commission, as the institution
responsible for funding, its entitled and enabled
to carry out all checks on the management of
expenditure it considers necessary and that there
should be full and effective transparency and
mutual assistance between the Member States
and the Commission;

decentralised

in

it

a

(6) Whereas, during the clearance of accounts, the
Commission is able to determine within a
reasonable time the total expenditure to be
the Guarantee Section in the
entered against
general account only if
satisfactory
it has
assurance that the national controls are adequate
and transparent and that the paying agencies
verify the legality and regularity of the payment
requests which they execute; whereas provision
should therefore be made for the accreditation of
paying agencies by Member States; whereas in

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order to ensure consistency in the standards
required for accreditation in the Member States
the Commission provides guidance on the
criteria to be applied; whereas, for that purpose,
it should be stipulated that only expenditure
effected by paying agencies accredited by the
Member States should be financed; whereas,
moreover, in order to ensure the transparency of
national
regards
payment
authorisation,
procedures, the number of authorities and bodies
to which these responsibilities are delegated
should, where appropriate, be restricted taking
account of the constitutional arrangements of
each Member State;

in particular
and

validation

controls,

as

(7) Whereas

management

decentralised

of
Community funds, in particular following reform
of the common agricultural policy, leads to the
designation of several paying agencies; whereas,
therefore, where a Member State accredits more
than on paying agency, it must designate a single
consistency in the
contact body to ensure
to provide liaison
management of
between the Commission and the
various
accredited paying agencies and to ensure that the
the Commission
information
concerning the operations of
several paying
agencies is made rapidly available;

the funds,

requested

by

(8) Whereas financial resources must be mobilised
by the Member States in accordance with the
needs of
their disbursing agencies, while the
Commission makes advance payments against
the booking of the expenditure effected by the
disbursing agencies; whereas in the framework of
rural development measures, genuine advance
payments for programme implementation should
be provided for; whereas it is appropriate to
treat these advance payments according to the
financial mechanisms established for advances on
the provision for expenditure effected in a
reference period;

(9) Whereas

two types of decisions

should be
established, one concerning the clearance of the
the other
Guarantee Section of
determining
including
to be drawn from the
financial corrections,
checks on conformity, with
results of
Community rules, of the expenditures;

the Fund,
consequences,

the

the

(10) Whereas

the checks on conformity and the
ensuing clearance decisions will
therefore no
longer be linked to the implementation of the
budget in a particular financial year; whereas the
maximum period to which the consequences to

be drawn from the checks on conformity may be
applied must be determined; whereas, however,
the pluriannual character of rural development
measures does not allow the application of such
a maximum period;

(11) Whereas measures must be taken to prevent and
deal with any irregularities and to recover the
amounts lost as a result of such irregularities or
negligence; whereas the financial responsibility
for such irregularities or negligence must be
determined;

(12) Whereas Community expenditure must be made
subject to close supervision; whereas, in addition
to supervision carried out by Member States on
their own initiative, which remains essential,
provisions should be made for verification by
officials of the Commission and for it to have
the right to enlist the help of Member States;

(13) Whereas information technology needs to be
fully as possible for producing the
used as
to the Commission;
information to be sent
whereas, when
the
carrying
Commission just have full and immediate access
to information on expenditure held in both
documents and electronic files;

checks,

out

(14) Whereas the extent of Community financing
makes it necessary for the European Parliament
and the Council to be kept regularly informed by
means of financial reports;

it

to bring

is desirable

the Fund closer

(15) Whereas, with a view to simplifying financial
the
management,
financing period of
to the
financial year as set out in Article 272(1) of the
Treaty; whereas carrying out such an operation
the funds
requires having a clear picture of
the
currently available towards
therefore,
financial year concerned; whereas,
provision should be made for the Commission to
have the powers necessary to adapt the financing
period of
the Fund where there are enough
remaining budgetary resources available;

the end of

agricultural

(16) Whereas Council Regulation (EEC) No 729/70
the
of 21 April 1970 on the financing of
been
common
substantially amended on several occasions;
whereas, now that new amendments are being
made to the said Regulation, it is desirable, in
order to clarify matters, that the provisions in
question should be recast,

policy (1)

has

(1) OJ L 94, 28.4.1970, p. 13. Regulation as last amended
by Regulation (EC) No 1287/96 (OJ L 125, 8.6.1995, p.
1).

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HAS ADOPTED THIS REGULATION:

Article 1

The

European Agricultural Guidance

1.
and
Guarantee Fund (hereinafter called the (cid:28)Fund’) shall
the European
the general budget of
form part of
Communities.

It shall comprise two sections:

— the Guarantee Section,

— the Guidance Section.

2.

The Guarantee Section shall finance:

(a) refunds on exports to third countries;

2.
Intervention intended to stabilise the agricultural
markets, undertaken in accordance with Community
rules within
common
framework
organisation of agricultural markets, shall be financed
under Article 1(2)(b).

the

the

of

3.
The Council, acting by a qualified majority on a
proposal from the Commission, shall, as far as is
necessary, adopt
financing the
measures referred to in paragraphs 1 and 2.

the procedure for

Article 3

Rural development measures outside Objective 1
accordance with
shall be financed under Article

undertaken

in

1.
programmes
Community rules
1(2)(c).

(b) intervention intended to stabilise the agricultural

market;

2.
Veterinary and plant health measures undertaken
in accordance with Community rules shall be financed
under Article 1(2)(d).

(c) rural development measures outside Objective 1
development

rural

the

programmes
except
Community initiative;

(d) the Community's financial contribution towards
specific veterinary measures, inspection measures
in the veterinary field and programmes for the
eradication and monitoring of animal diseases
(veterinary measures) as well as towards plant
health measures;

(e) measures intended to provide information on the
common agricultural policy and certain evaluation
actions of measures financed by the Guarantee
Section of the Fund.

The Guidance

3.
rural
Section
development measures which are not covered by
paragraph 2, point (c).

finance

shall

4.
Expenditure relating to administrative costs and
personnel borne by Member States and by recipients
of aid from the Fund shall not be taken over by the
Fund.

Article 2

3.
Information measures and evaluation actions
undertaken in accordance with Community rules shall
be financed under Article 1(2)(e).

4. Detailed rules for the application of this Article
shall be adopted in accordance with the procedure laid
down in Article 13.

Article 4

Each Member State shall communicate to the

1.
Commission:

(a) details of the authorities and bodies it accredits to
pay the expenditure referred to in Articles 2 and
3, hereinafter referred to as (cid:28)paying agencies’,

(b) where more than one paying agency is accredited,
details of the authority or body it charges, first,
the information to be
with bringing together
supplied to the Commission and sending it the
same,
the
harmonised application of Community rules,
hereinafter referred to as the (cid:28)coordinating body’.

second, with

promoting

and,

1.
Refunds on export to third countries, granted in
accordance with the Community rules within the
framework of the common organisation of agricultural
markets, shall be financed under Article 1(2)(a).

2.
Paying agencies shall be authorities and bodies of
the Member States, which, as regards payments in the

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areas for which they are responsible, offer sufficient
guarantees that:

(a) the admissibility of claims and compliance with
Community rules are checked before payment is
authorised;

(b) the payments effected are correctly and fully

recorded in the accounts; and

(c) the necessary documents are submitted within the
time and in the form laid down in Community
rules.

carrying out of

The paying agencies must hold documents
3.
effected and documents
justifying the payments
the prescribed
concerning
the
administrative and physical
the
relevant documents are kept by the bodies responsible
those bodies must
for authorising the expenditure,
transmit reports to the paying agency on the number
of checks carried out, their content and the measures
taken in the light of the results.

controls. Where

4. Only expenditure effected by accredited paying
agencies may be the subject of Community financing.

Each Member State shall, taking into account its
5.
constitutional and institutional structures,
the
number of accredited paying agencies to the minimum
necessary in order to effect the expenditure referred to
in Articles 2 and 3 under satisfactory administrative
and accounting conditions.

limit

necessary adjustments within a time limit to be fixed
in relation to the seriousness of the problem. The
Member
inform the
Commission.

concerned

State

shall

8. Detailed rules for the application of this Article
shall be adopted in accordance with the procedure laid
down in Article 13.

Article 5

1.
The financial resources required to cover the
expenditure referred to in Articles 2 and 3 shall be
made
the
to the Member
Commission by means of advances on the provision
for expenditure effected in a reference period.

States by

available

Advance payments for programme implementation in
the framework of rural development measures referred
to in Article 3(1) may be granted by the Commission
on the approval of the programmes concerned and
shall be deemed to be expenditure effected on the first
day of the month following the granting decision.

the

Until

2.
advances on the provision for
expenditure effected are paid, the resources necessary
to meet that expenditure shall be mobilised by the
Member States in accordance with the needs of their
accredited paying agencies.

3. Detailed rules for the application of this Article
shall be adopted in accordance with the procedure laid
down in Article 13.

Each Member State shall communicate to the
concerning
following particulars

6.
Commission the
those paying agencies:

Article 6

(a) their name and their statutes;

(b) the administrative, accounting and internal control
conditions under which payments are made
relating to the implementation of Community
the common
rules within the framework of
agricultural policy;

(c) the act of accreditation.

The Commission shall be informed forthwith of any
change in those particulars.

7. Where one or more of
for
accreditation are not, or are no longer, fulfilled by an
accredited paying agency, accreditation shall be
the
withdrawn unless

the paying agency makes

the conditions

States

1. Member
intervals,
shall,
transmit to the Commission the following information
and
concerning
coordinating bodies and relating to the transactions
financed by the Guarantee Section of the Fund:

accredited

agencies

regular

paying

the

at

(a) statements of
financial needs;

expenditure

and estimates of

(b) annual accounts, accompanied by the information
required for clearance and an attestation regarding
the integrality, accuracy and veracity of
the
accounts transmitted;

2. Detailed rules for the application of this Article
and, in particular, those covering the attestation of the
accounts
shall be
referred to in paragraph 1(b)
adopted in accordance with the procedure laid down
in Article 13.

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Article 7

The Commission, after consulting the Fund
in

the decisions

1.
Committee shall adopt
paragraphs 2, 3 and 4.

set out

The Commission shall decide on monthly
2.
advances on the provision for expenditure effected by
the accredited paying agencies.

for October

shall be attributed to
Expenditure
October if it is effected from 1 to 15 October and to
November if it is effected from 16 to 31 October.
Advances shall be paid to the Member State not later
the second month
than the third working day of
following that in which the expenditure is effected.

Additional
Committee being informed at the next consultation.

advances may be made,

the Fund

3.
The Commission shall, before 30 April of the
year following the financial year concerned, on the
basis of the information referred to in Article 6(1)(b),
clear the accounts of the paying agencies.

The clearance of accounts decision shall cover the
the accounts
integrality, accuracy and veracity of
the
submitted. The decision shall not prejudice
adoption of a subsequent decision pursuant
to
paragraph 4.

4.
The Commission shall decide on the expenditure
to be excluded from the Community financing referred
to in Articles 2 and 3 where it finds that expenditure
has not been effected in compliance with Community
rules.

Before a decision to refuse financing is taken, the
results of the Commission's checks and the replies of
the Member State concerned shall be notified in
writing, after which the two parties shall endeavour to
reach agreement on the action to be taken.

If no agreement is reached, the Member State may ask
for a procedure to be initiated with a view to
mediating between the respective positions within a
period of four months, the results of which shall be set
out
to and examined by the
Commission, before a decision to refuse financing is
taken.

in a report

sent

account

non-compliance found. The Commission shall
into
of
nature
infringement and the financial
Community.

take
the
loss suffered by the

gravity

and

the

A refusal to finance may not involve:

(a) expenditure referred to in Article 2 effected prior
to 24 months preceding the Commission's written
communication of the results of those checks to
the Member State concerned;

(b) expenditure for a measure or action referred to in
Article 3 in respect of which the final payment
was effected prior to 24 months preceding the
the
Commission's written communication of
results of
to the Member State
concerned.

those checks

However, the fifth subparagraph shall not apply to the
financial consequences:

(a) of irregularities as referred to in Article 8(2);

(b) concerning national aids, or infringements,

for
which the procedures referred to in Articles 88
and 226 of the Treaty have been initiated.

5. Detailed rules for the application of this Article
shall be adopted in accordance with the procedure laid
down in Article 13. Those rules
in
particular the treatment of advance payments referred
second subparagraph under
to in Article 5(1),
paragraphs 2, 3 and 4 of
this Article and the
procedures relating to the decisions referred to in the
said paragraphs 2, 3 and 4.

shall cover

Article 8

The Member States shall,

1.
in accordance with
national provisions laid down by law, regulation or
administrative action, take the measures necessary to:

(a) satisfy themselves that transactions financed by
the Fund are actually carried out and executed
correctly;

(b) prevent and deal with irregularities;

The Commission shall evaluate the amounts to be
excluded having regard in particular to the degree of

(c) recover sums lost as a result of irregularities or

negligence.

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The Member States shall inform the Commission of
those purposes and in
the measures
particular of
the administrative and
judicial procedures.

taken for
the state of

(b) whether the requisite supporting documents exist
and tally with the transaction financed by the
Fund;

2.
In the absence of total recovery, the financial
consequences of irregularities or negligence shall be
borne by the Community, with the exception of the
negligence
consequences
attributable to administrative authorities or other
bodies of the Member States.

irregularities

or

of

The sums recovered shall be paid to the accredited
paying agencies and deducted by them from the
expenditure financed by the Fund. The interest on
sums recovered or paid late shall be paid into the
Fund.

3.
The Council, acting by a qualified majority on a
proposal from the Commission, shall lay down general
rules for the application of this Article.

Article 9

the Fund and shall

1. Member States
shall make available to the
Commission all information required for the proper
working of
suitable
to facilitate the supervision which the
measures
Commission may consider necessary to undertake
within the
the management of
Community financing,
including inspections on the
spot.

framework of

take all

laid

down

Member States shall communicate to the Commission
provisions
or
administrative action which they have adopted for the
application of legal acts of the Community relating to
the common agricultural policy in so far as those acts
have financial consequences for the Fund.

regulation

law,

by

(c) the conditions under which transactions financed

by the Fund are carried out and checked.

The Commission shall give due notice before the
inspection is
to the Member State
concerned or to the Member State on whose territory
it is to take place. Officials of the Member State
concerned may take part in the inspection.

carried out

the request of

the Commission and with the
At
agreement of
inspections or
the Member State,
inquiries concerning the transactions referred to in this
Regulation shall be carried out by the competent
authorities of
the
Commission may also participate.

that Member State. Officials of

To make verification more effective, the Commission
may, with the agreement of
the Member States
concerned, arrange for the administrative authorities
of those States to participate in certain inspections or
inquiries.

3.
The Council, acting by a qualified majority on a
proposal from the Commission, shall, as far as is
necessary, lay down general rules for the application
of this Article.

Article 10

Before 1 July of each year,
the Commission shall
submit to the European Parliament and to the Council
a financial report on the administration of the Fund
during the preceding financial year and, in particular,
on the state of its resources and the nature of its
expenditure
achieving
Community financing.

conditions

and

the

for

by

laid

law,

down

regulation

2. Without prejudice to the supervision effected by
in accordance with national
the Member States
provisions
or
administrative action and without prejudice to Article
248 of the Treaty, or to any inspection organised on
the basis of Article 279(c) of the Treaty, authorised
representatives appointed by the Commission to carry
out inspections on the spot shall have access to the
books and all other documents, including information
created or
relating to
stored in electronic form,
expenditure financed by the Fund.

Article 11

for

The Committee
the European Agricultural
Guidance and Guarantee Fund (hereinafter called the
(cid:28)Fund Committee’) shall assist
the Commission in
administering the Fund, as laid down in Articles 12 to
15.

They may, in particular, check:

Article 12

(a) whether administrative practices are in accordance

with Community rules;

The Fund Committee shall consist of representatives of
the Commission. Each
the Member States and of

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Member State shall be represented on the Fund
Committee by not more than five officials. The Fund
Committee
the
a
shall have
Commission as chairman.

representative of

Article 13

1. Where the procedure laid down in this Article is
to be followed, the matter shall be referred to the
Fund Committee by the chairman, either on his own
initiative or at the request of the representative of a
Member State.

The representative of

2.
the Commission shall
submit to the committee a draft of the measures to be
taken. The committee shall deliver its opinion on the
draft within a time limit which the chairman may lay
down according to the urgency of the matter. The
opinion shall be delivered by the majority laid down
in Article 205(2) of the Treaty in the case of decisions
which the Council is required to adopt on a proposal
from the Commission. The votes of the representatives
of the Member States within the committee shall be
weighted in the manner set out in that Article. The
chairman shall not vote.

3.

(a) The Commission shall adopt measures which

shall be immediately applicable.

(b) However,

it

in
such measures
accordance with the opinion delivered by the
Fund Committee, they shall be communicated
by the Commission to the Council forthwith.
In that event:

are not

— the Commission may defer for not more
than one month from the date of such
communication,
the
application
measures which it has adopted,

of

— the Council, acting by a qualified majority,
may adopt a different decision within the
time limit referred to in the preceding
indent.

Article 14

1.

The Fund Committee shall be consulted:

coming financial year and,
additional estimates;

if necessary,

in

(c) on draft reports on the Fund to be submitted to

the Council.

2.
The Fund Committee may examine any other
question referred to it by its chairman either on his
own initiative or at the request of a representative of a
Member State.

It shall be informed regularly of the activities of the
Fund.

Article 15

The chairman shall convene the Fund Committee.

Secretarial services shall be provided for the Fund
Committee by the Commission.

The Fund Committee shall lay down its own rules of
procedure.

Article 16

1.

Regulation (EEC) No 729/70 shall be repealed.

2.
References to the repealed Regulation shall be
construed as references to this Regulation and should
be read in accordance with the correlation table set
out in the Annex.

Article 17

Article 15,
Decision 90/424/EEC shall be deleted.

third subparagraph and Article 40 of

Article 18

The measures required to facilitate the transition from
the arrangements provided in Regulation (EEC) No
729/70 to those established by this Regulation shall be
adopted in accordance with the procedure laid down
in Article 13.

(a) in cases where provision is made for it to be

consulted;

Article 19

(b) for the assessment of the Fund's credits to be
the
entered in the Commission's estimate for

The Commission may delete the first sentence of
Article 7(2), second subparagraph in accordance with
the procedure laid down in Article 13 where the
budgetary funds attributed to the Guarantee Section of

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the Fund, which are available toward the end of a
given financial year, would allow the Fund to finance
the additional expenditure resulting from that deletion
for that financial year. Where the Commission makes
use of this power, it may in accordance with the same
procedure postpone the starting date of those payment
windows of measures, which start to run between 16
and 31 October inclusive, to 1 November.

Article 20

This Regulation shall enter into force on the seventh
day following its publication in the Official Journal of
the European Communities.

It shall apply to expenditure effected as from 1
January 2000.

This Regulation shall be binding in its entirety and directly applicable in all Member
States.

Done at Brussels, 17 May 1999.

For the Council

The President

K.-H. FUNKE

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ANNEX

CORRELATION TABLE

Regulation (EEC) No 729/70

This Regulation

Article 1(1)

Article 1(1)

Article 1(2)(a) and (b)

Article 1(2)(a) and (b)

Article 1(4)

Article 2(1)

Article 2(2)

Article 3(1)

Article 3(2)

Article 3(3)

Article 1(4)

Article 2(1)

Article 2(3)

Article 2(3)

Article 2(3)

—

Article 4(1)(a), first subparagraph

Article 4(1)(a)

Article 4(1)(a), second subparagraph

Article 4(1)(a), third subparagraph

Article 4(2)

Article 4(3)

Article 4(1)(b), first subparagraph

Article 4(1)(b)

Article 4(1)(b), second subparagraph

Article 4(2)

Article 4(3)

Article 4(4)

Article 4(4)

Article 4(5)

Article 4(6)

Article 4(7)

Article 4(5), first sentence

Article 5(1), first subparagraph

Article 4(5), second sentence

Article 5(2)

Article 4(6)

Article 5(1)

Article 5(2)(a)

Article 5(2)(b)

Article 5(2)(c)

Article 5a

Article 6

Article 6a

Article 6b

Article 6c

Article 7

Article 8

Article 9

Article 10

Article 11

Article 4(8) and Article 5(3)

Article 6(1)

Article 7(2)

Article 7(3)

Article 7(4)

—

—

—

—

—

—

Article 8

Article 9

Article 10

Article 11

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Regulation (EEC) No 729/70

This Regulation

Article 12(1)

Article 12(2)

Article 13

Article 14

Article 15

Article 16

Article 12

—

Article 13

Article 14

Article 15

—