Report from the Commission - Third Report from the Commission on the operation of the inspection arrangements for traditional own resources (1997-1999) - (Article 18(5) of Council Regulation (EC, Euratom) No 1150/00 of 22 May 2000)
Date: 2001-02-05
Institutions: European Commission
Subjects: auditing, financial control, financing of the EU budget, fraud against the EU, management audit, own resources

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 05.02.2001
COM(2001) 32 final

REPORT FROM THE COMMISSION

Third report from the Commission on the operation of the inspection arrangements for
traditional own resources (1997-1999)

(Article 18(5) of Council Regulation (EC, Euratom) No 1150/00 of 22 May 2000)

CONTENTS

1.

2.

2.1

2.2

3.

3.1

3.2

3.3

4.

4.1

4.2

4.3

Introduction.............................................................................................................. 4

Legal framework and objectives of inspections......................................................... 5

Legal framework ...................................................................................................... 5

Objectives of inspections .......................................................................................... 5

Operation of the inspection system at Community level............................................ 6

Checks on regulations............................................................................................... 8

Checks on documents ............................................................................................... 8

On-the-spot inspections in the Member States ........................................................ 10

Inspections by the Commission in 1997-99............................................................. 10

Procedures for carrying out on-the-spot inspections................................................ 10

Summary of inspections ......................................................................................... 11

Main results of inspections ..................................................................................... 11

4.3.1

Comments on management of customs ................................................................... 11

4.3.2

Comments on management of accounting procedures............................................. 12

4.3.3

Other procedures .................................................................................................... 13

4.4

Regulatory and financial follow-up to Commission inspection measures ................ 14

4.4.1

Regulatory aspects.................................................................................................. 14

4.4.2

Financial aspects .................................................................................................... 15

4.4.3

Organisational aspects ............................................................................................ 16

4.5

4.6

5.

5.1

5.2

5.3

Financial responsibility of the Member States......................................................... 17

Application of Article 17(2) of Regulation No 1150/00 .......................................... 19

Assessment of how the inspection arrangements operate ........................................ 21

General assessment: inspections are still necessary ................................................. 21

Relations with the Court of Auditors: increased importance.................................... 21

Joint audit initiative ................................................................................................ 22

2

EXECUTIVE SUMMARY

This report, which is sent to the budgetary authority pursuant to Article 18(5) of Regulation
No 1150/00, gives an account of the operation of the inspection arrangements for traditional
own resources over the period 1997-99. This information, which covers three years, gives an
overall view of the Commission's multiannual inspections of both customs and accounting
procedures and identifies the main strategies it intends to develop to improve results.

This report first describes the general objectives pursued by the Commission via inspections
of traditional own resources, in particular to keep a level playing field for operators in the
European Union, improve recovery and inform the budgetary authority. It also presents the
legal and regulatory framework surrounding the various inspection arrangements, followed by
a factual description of the inspection system operating at Community level between 1997
and 1999.

Over the period in question the Commission conducted 70 inspections (joint and autonomous)
in all fifteen Member States. These inspections revealed 246 anomalies, 185 relating to
accounting practices and 61 to do with customs. As a result of these anomalies,
the
Member States have so far paid a total of
6 971 898 in
interest for late payment.

3 035 347 in principal amounts and

€

€

Apart from the aspects linked to the accounts, the anomalies detected during these inspections
are an essential source of information on the problems encountered by the Member States in
applying customs and accounting regulations. They can reveal any incompatibility between
national provisions and the spirit of Community law and highlight the possible impact in
terms of own resources. Analysis of these anomalies can lead to the reform of existing
provisions and improve the clarity of Community legislation.

The report concludes that there is a need for inspection measures to cover the various
aspects - customs-related, financial and regulatory - of how the whole system for the
inspection of traditional own resources works.

Finally, the report turns to the overall development of the inspection and collection system; it
sets out the broad lines of the strategy which the Commission intends to develop in the
medium term, firstly as regards methods and secondly as part of a renewed partnership
between the Commission and the Member States.

As regards inspection measures, the Commission wishes to improve the utilisation of all
practical instruments likely to make the conduct of inspections more efficient or permit better
monitoring.

Alongside these methodological considerations, the Commission aims to make the Member
States assume more responsibility. It is therefore continuing to examine the operational
consequences of holding the Member States liable for some of the errors committed by their
administrations. This approach forms part of the attempt to achieve a fairer distribution of the
financial burden between the Member States in accordance with the principles of sound and
efficient management set out in SEM 2000. However, the Commission is also considering a
new approach to associated inspections based on the Joint Audit Initiative which requires a
different form of cooperation between the Community authorities and the Member States and
which also seeks to respond to the changes in inspection procedures that will be required with
the forthcoming enlargement of the European Union.

3

REPORT FROM THE COMMISSION

Third report from the Commission on the operation of the inspection arrangements for
traditional own resources (1997-1999)

(Article 18(5) of Council Regulation (EC, Euratom) No 1150/00 of 22 May 2000)

1.

INTRODUCTION

Every three years the Commission compiles a report for the European Parliament and the
Council on the operation of the inspection system for Community own resources, pursuant to
Article 18(5) of Council Regulation (EC, Euratom) No 1150/00 of 22 May 20001
implementing Decision 94/728/EC/Euratom on the system of the Community's own
resources2 ("Regulation No 1150/00 ").3

The first report, concerning the period 1989-1992, was submitted to the budgetary authority
on 4 January 1994,4 and the second, concerning the period 1993-1996, was submitted on
8 December 1997.5

This report describes and analyses the operation of the inspection system for traditional own
resources between January 1997 and December 1999. It outlines the follow-up action on the
various cases up to the end of December 1999. The report is structured as follows: outline of
the general objectives pursued by the Commission via inspections concerning traditional own
resources and presentation of the legal framework surrounding the various inspection
arrangements, followed by a factual description of the inspection system operating at
Community level.

The report goes on to describe the Commission's inspection measures as carried out between
1 January 1997 and 31 December 1999. It then assesses the results of the inspections and
draws conclusions and assesses the Commission's inspection measures.6 Finally, the report
outlines the financial and regulatory follow-up to these inspections and summarises their
impact with regard to the development of the various rules in place.

As part of the improvement of the means of collecting traditional own resources, the report
also tackles the question of the financial responsibility of the Member States and discusses the
development of the joint audit initiative.

1

2

3

4

5

6

OJ L 130, 31.5.2000, p. 1-9.
OJ L 293, 12.11.1994, p. 9.
The results of inspections carried out by the Member States are reported to the Commission on the basis
of Article 17(3) of Regulation No 1150/00.
COM(93) 691 final of 4.1.1994.
COM(97) 673 of 1.12.1997.
The report focuses on the checks made by the Community institutions (the Commission and the Court
of Auditors). It does not cover the checks made by the Member States, the detailed results of which are
set out in specific reports.

4

Where serious shortcomings have been found, the Commission has considered it appropriate
to cite the cases in question, the measures needed to correct the situation, via infringement
proceedings in some instances, having already been taken.

2.

LEGAL FRAMEWORK AND OBJECTIVES OF INSPECTIONS

2.1

Legal framework

Inspection of the system of collection of own resources is based on three pieces of legislation.

Council Decision 94/728/EC, Euratom of 31 October 19947 constitutes the legal basis for the
Community own resources system. It defines the own resources that are entered in the
Community budget.

The legal arrangements for
the implementation of Decision 94/728 were created by
Regulation No 1150/00. This regulation establishes the system for the collection of traditional
own resources (Article 2), the rules for entering these resources in the "A" or "B" account
(Article 6(3)) and the procedure for making them available to the Commission (Article 10). It
also contains provisions governing the obligation on Member States to report
to the
Commission cases of fraud and irregularities they have detected, the aim being to monitor
recovery procedures more closely in such cases (Article 6(4)) and provisions relating to the
waiving of the obligation to make own resources available to the Commission (Article 17(2))
and inspections (Article 18(2) and (3)).

An amendment to Articles 2 and 17 of Regulation No 1150/00, prompted by the need to
tighten up the procedure for collecting own resources and to make the rules clearer, is before
the Council.

Council Regulation (EC, Euratom) No 1026/99 of 10 May 19998 applies to inspections
carried out jointly with the national administrations of the Member States.9 It lays down the
rights and obligations of the officials appointed by the Commission in the exercise of their
powers of inspection.

2.2

Objectives of inspections

The collection of traditional own resources may be checked in different ways: checks on
documents, checks on regulations and on-the-spot checks. Inspections have three specific
objectives:

–

7

8

9

to maintain a level playing field between economic operators who import goods
from third countries. Only genuine monitoring by an impartial supranational body,
with the results reported to the European Parliament and, via the Council, to all the
Member States, can avoid possible distortion of competition. The Commission must
ensure that the Member States apply Community rules correctly. Also, analysis of
the problems encountered by the Member States in implementing the rules and of

OJ L 293, 12.11.1994, p. 9.
OJ L 126, 20.5.1999, p. 1.
Pursuant to Article 18(2) of Regulation No 1150/00.

5

–

–

shortcomings can help to make the body of Community law clearer, and more
transparent;

to improve the situation as regards recovery so that the financial burden is shared
out correctly among the Member States, i.e. it must be borne by the country which
has enjoyed the economic benefit of the transaction. Given that any deficit
in
traditional own resources is "automatically" offset by an increase in contributions
through the fourth resource (GDP), such losses are in fact borne by the taxpayers of
the systematic checks by the Commission on the
the Member States. As
Member States' collection systems give rise to financial corrections, the national
administrations are obliged to take their responsibilities seriously when it comes to
collecting own resources;

to inform the budgetary authority. The Commission needs to monitor the measures
taken by the Member States with regard to collection in order to see how things are
organised in each country and to assess the efficiency and diligence of national
administrations in recovering the own resources of the European Union. This
overview will allow the Commission to report to the budgetary authority on the
implementation of the budget in terms of revenue.

3.

OPERATION OF THE INSPECTION SYSTEM AT COMMUNITY LEVEL

The system for the collection of traditional own resources by the Member States is subject to
several types of control within the Commission: apart from the internal Commission audits
carried out by the Budget Directorate-General in its capacity as authorising department for
budget revenue, the operation of the system of traditional own resources is monitored as part
of the general framework for the management of Community entitlements. The Commission
is also required to respond to and take action on the observations made by the Court of
Auditors in connection with the inspections carried out under Article 248 of the Treaty,
contained in its Annual Report, special reports or sector letters, and also the requests made by
the European Parliament during the discharge procedure in respect of the implementation of
the budget.

Responsibility for collecting traditional own resources is delegated to the Member States. In
practical terms, they assume responsibility for implementing the system and they are allowed
to retain a collection fee of 10% of all amounts of own resources established. The
Commission ensures that the Member States apply the Community regulations correctly and
reports to the budgetary authority. This complementarity of the Member States' and the
Commission's responsibilities is based on the rules in force.

The Member States are expressly required to carry out checks themselves10 and to report to
the Commission. However, these checks carried out at national level do not mean that the
Commission need not exercise its powers in this field. Its own checks thus enable it to ensure
that the Member States are all complying with their Community obligations at the same level
as one another. The objective of the checks is thus to see that the own resources made over to
is legally due. To this end,
the Commission by the Member States correspond to what
Community revenue is monitored from the chargeable event to entry in the Commission
accounts via the procedures of establishment, entry in the accounts and making available.

10

Article 18(1) of Regulation No 1150/00.

6

To achieve this, the Commission11 carries out three types of inspection: checks on regulations,
checks on documents and on-the-spot checks in the Member States. The Community control
and inspection arrangements for traditional own resources, as provided for at Community
level and implemented by the Commission, can be represented schematically as follows:

Type of check

Member States'
arrangements

Regulation No
1150/00

Article 4(1)(b)

Arrangements

Checks on Member States' provisions concerning the
system for collecting TOR.

Accounting
information

Article 6(4)

Monthly statement of “A” and "B" accounts

Article 7

Annual summary account of entitlements established and
recovered

Analysis of
statements and
reports

Article 6(5)

Article 17(2)

Article 17(3)

Cases of fraud and irregularities involving entitlements of
over

10 000

€

Cases of non-recoverable entitlements written off (sums
over

10 000)

€

Annual report on outcome of inspections in Member States

Joint inspections

Article 18(2)

inspections

Joint
Commission

by

the Member States

and

the

Autonomous
inspections

Article 18(3)

Autonomous Commission inspections on its own initiative

n
o

s
k
c
e
h
C

s
n
o
i
t
a
l
u
g
e
r

s
t
n
e
m
u
c
o
d
n
o
s
k
c
e
h
C

s
k
c
e
h
c

t
o
p
s
-
e
h
t
-
n
O

11

The controls carried out by the Commission, in particular those conducted by DG BUDG, are not all the
inspections carried out by the Community institutions. The Court of Auditors is empowered to carry out
audits in this field (Article 248 of the Treaty) and the European Parliament can also play an inspection
role (Article 276 of the Treaty).

7

3.1

Checks on regulations

This type of check involves looking at the laws, regulations and administrative provisions of
the Member States in the field of accounts and customs. Checks are made in particular during
the preparation of inspections or during the follow-up to such inspections. Examination of the
reports submitted by the Member States pursuant to Article 17(2) of Regulation No 1150/00
(where entitlements are written off) may give rise to this type of analysis. If national
provisions are not in line with Community rules, the Commission suggests the necessary
amendments. This usually makes it possible to find satisfactory solutions without the need for
infringement proceedings.

3.2

Checks on documents

The documentary checks carried out by the Commission consist in analysing accounting
statements and reports and the annual reports from Member States on inspection findings.

Under Article 6(3)(a) of Regulation No 1150/00, Member States keep an "A" account of own
resources. Established entitlements which have been recovered12, in accordance with Article 2
of Regulation No 1150/00, are entered in this account and Member States send a monthly
statement to the Commission.13 The Commission may make corrections by amending the
statements. Following such corrections interest on late payments may be charged to the
Member States.

Article 6(3)(b) of Regulation No 1150/00 requires that established entitlements that have not
been entered in the “A” account because they have not yet been recovered and no security has
been provided must be entered in a “separate account” known as the “B account”. This
account may also contain established entitlements which, although covered by guarantees,
have been challenged by operators. All the amounts entered in this separate account are
shown in quarterly statements sent by the Member States to the Commission.14

The Commission checks that each quarterly statement accords with the statement from the
previous quarter, looking at entitlements established, corrections, cancellations and sums
recovered in the course of the quarter covered by the statement. In the event of a discrepancy,
the Commission contacts the Member State concerned to ascertain the reason.

Under Article 17(2), Member States notify the Commission of amounts written off, i.e. cases
where it proved impossible to recover the entitlements for reasons not attributable to the
Member State. The Commission has six months in which to give its opinion. Article 17(2) of
Regulation No 1150/00 is the sole exception to the rule that all established entitlements
(pursuant to Article 2 of the same Regulation) must be made available to the Commission. It
requires an assessment of the precautions taken by the Member State in its measures to enter
in the accounts and recover entitlements. As well as looking at Community provisions, the
Commission checks how national administrative and regulatory provisions on (enforced)

12

13

14

i.e. entitlements due which have first been entered in the accounts and notified to the debtor.
The monthly statement of the “A” account must be submitted to the Commission, at the latest, by the
first working day after the 19th day of the second month following the month in which the entitlement
was established.
The quarterly statement of the “B” account must be submitted to the Commission, at the latest, by the
first working day after the 19th day of the second month following the quarter in which the entitlement
was established.

8

recovery have been implemented. If the provisions have been complied with, the Commission
agrees to waive the obligation to make the entitlements available.

the Member State has failed to take all

If the Commission deems that
the necessary
precautions to safeguard the financial interests of the Community, the Member State may be
held responsible on the basis of Article 8 of the Own Resources Decision (94/728/EC,
Euratom) and on the basis of Articles 2 and 17(1) of Regulation No 1150/00;
the
Member State is requested to make available to the Commission, by a certain date, an amount
equal to the non-recovered entitlements. If this amount is not made available by the date set,
interest for late payment may be demanded.

By 1 April each year, the Member States are required by Article 7 of Regulation No 1150/00
to provide the Commission with a summary account of all the entitlements established and
recovered in the previous year. This must be accompanied by a report on the collection of
own resources. The Commission evaluates the information in these reports, comparing it with
other accounting data from different sources at its disposal.

Under Article 17(3) of Regulation No 1150/00, the Member States send the Commission an
annual report presenting the results of their own inspections. This report contains aggregate
figures and the questions of principle relating to the main problems posed by application of
Regulation No 1150/00, with particular reference to cases of litigation. For each financial year
the Commission draws up a summary report from which it is possible to glean two main types
of information: first, a picture of the actual inspection measures of the Member States, and
second an assessment of the results as regards the prevention of fraud and irregularities.15

The Commission also monitors the Member States' measures for recovery in the field of
traditional own resources on the basis of information it receives from them though the
"Ownres" computerised system. This information is mostly on cases of
fraud and
irregularities reported under Article 6(5) of Regulation No 1150/00. All the information sent
via the "Ownres" software is also analysed by the Anti-Fraud Office (OLAF).

Given the very large number of cases of fraud and irregularities involving amounts of over
€
10 000 ("fraud reports" and "mutual assistance reports"), the Commission has established
two procedures for processing data: the first is a statistical processing of the "fraud reports",
and the other a detailed examination of certain particularly difficult cases reported under the
system of mutual assistance.

The purpose of the first procedure, known as "Sample A", is to present the general aspects of
the recovery situation. The first report of this type was sent to the budgetary authority in 1995
(Report A94 of 6 September 1995). A second report is scheduled for 2000.

The purpose of the second procedure, known as "Sample B", is to monitor, until final
clearance, recovery operations relating to a number of representative cases. Two reports of
this type, B94 and B98, have been drawn up, and a third (B2000) is being prepared. The first
124 million
report, B94, concerns six cases representing entitlements amounting to around

€

15

The Commission has drawn up the following reports:
-
-
-

1996 Report: XIX/24329/98 of 27.5.1998
1997 Report: COM(1999) 110 final of 12.3.1999
1998 Report: COM(2000) 107 final of 29.2.2000

9

and the second, B98, concerns nine cases representing entitlements amounting to around
€
136 million.16

A comparison of Reports B94 and B98 shows that recovery has become more far more
effective in the Member States. The actual rate of recovery rose from 2% in Report B94 to
12% in Report B98, and the proportion of cases out of time dropped sharply from 12% to 4%.
The Member States whose negligence made it impossible to recover the own resources in
question were held financially responsible for the loss to the Community budget.

3.3

On-the-spot inspections in the Member States

Checks on regulations and documents are essential to the process of verifying application of
the Community rules. However, an effective monitoring system also requires "on-the-spot"
inspections. This provides the Commission with the opportunity to verify and where
necessary,
tighten application of Community rules on traditional own resources and to
cross-check the conclusions deriving from the other forms of control.

transactions. In order to provide a clearer framework for inspections,

The strategy of on-the-spot
the Member States properly
inspections is to ensure that
implement arrangements in line with Community rules in order to guarantee the regularity of
the
commercial
Commission has established new inspection arrangements by drawing up detailed
questionnaires sent to the Member States before each visit and inspection handbooks to be
used only by the officials appointed to carry out the inspections. This aspect is dealt with in
section 4.4.3. During inspections, the Member States must allow the officials appointed by the
Commission free access to all supporting documents.

There are two types of on-the-spot
inspection, both closely coordinated with national
administrations: the joint inspection, conducted in collaboration with the Member State and
the own inspection, carried out on the initiative of the Commission, both of which comply
with the provisions of Regulations Nos 1150/00 and 1026/99. The Member States with the
greatest impact in terms of own resources are subject to both types of inspection each year.

4.

INSPECTIONS BY THE COMMISSION IN 1997-99

4.1

Procedures for carrying out on-the-spot inspections

The Commission carries out its inspections on the basis of an annual programme drawn up
by the Budget Directorate-General; the Member States are informed of the subjects of joint
inspections. Other Commission departments may be involved in implementing the
programme, depending on the subject under investigation. On-the-spot checks account for
over 35% of the work of the unit responsible for checking the collection of traditional own
resources. Inspections are carried out in close collaboration with the national authorities
concerned and follow a procedure which guarantees openness and the dissemination of
information. After each inspection a report is drawn up which covers the summary of the
inspection and any anomalies discovered and being checked. The Member State has three
months in which to submit its comments. The Commission follows up contentious points until
the case is finally settled.

16

Commission Reports on the recovery of traditional own resources in cases of fraud and irregularities
("Sample A94", COM(95) 398 final of 6 September 1995, "Sample B94", COM (97) 259 final of
9 June 1997 and "Sample B98", COM(1999) 160 final of 21 April 1999.

10

4.2

Summary of inspections

The Commission carried out a total of 70 inspections during the period 1997-1999,
comprising 45 joint inspections and 25 autonomous inspections. The tables in Annexes 1 and
2 indicate, by year, the nature and the subject of inspections (customs and accounting
procedures) and the Member States concerned.

4.3 Main results of inspections

Over 100 million customs declarations are processed each year in the European Union. The
result of the inspections carried out over the period 1997-99 is favourable, despite the
anomalies, of varying seriousness, which were detected. Assessment of application by the
national administrations of Community rules, from both customs and financial angles,
revealed 246 anomalies, including 185 accounting anomalies. The following table shows the
breakdown of presumed anomalies found during inspections:

miscellaneous
15 anomalies
6%

B account
59 anomalies
24%

recovery
52 anomalies
21%

preferential
schemes
30 anomalies
12%

transit
31 anomalies
13%

sugar
10 anomalies
4%

fraud reports
12 anomalies
5%

repayment
17 anomalies
7%

incomplete
declarations
20 anomalies
8%

4.3.1

Comments on management of customs

–

The Commission initiated an inspection in the field of preferential
tariff
arrangements. Before the inspection, which was carried out in connection with the
tariff
Commission's
arrangements,17 the Member States were sent a detailed questionnaire on the subject.
On the basis of the results of this inspection a thematic report was drawn up
(available on request).18

the management

communication

preferential

on

of

The inspections confirmed that there are still problems with the application of
preferential tariff arrangements; in the report on the management of the arrangements
mentioned in the previous paragraph, the Commission launched a programme for the
reform of the system, which continues to be a valuable commercial policy
the difficulties of applying the
instrument. The anomalies detected highlight

17

18

COM(97)402 of 23.7.1997.
The document may be obtained from DG BUDG (Tel: (02) 296 24 65).

11

regulations the Member States face concerning ex post checks on origin and the
consequences for the recovery of resources.

The Commission has asked the Member States to improve the dissemination of
to
national
monitor closely cases pending and to make available the corresponding entitlements
as soon as possible, with interest for late payment where appropriate.

instructions or information from the Commission to local services,

in all the Member States in the field of external
Inspections were carried out
Community transit and TIR arrangements. The anomalies found - late discharge of
transit operations and deficiencies in arrangements for checking documents - lead
mainly to delays in recovery.

The Member States cited specifically in the Commission's comments were asked to
comply rigorously with the implementing provisions of the Community Customs
Code19 concerning transit and, with respect to the comprehensive guarantee, to take
all necessary steps to ensure maximum cover of the duties owed as own resources.

The Commission also initiated two infringement proceedings against Germany and
the Netherlands. The Commission maintains that the German authorities did not take
the necessary steps to initiate the recovery process for 509 TIR carnets representing
own resources amounting to
10.22 million, without guarantee. The Netherlands
refused to pay interest on late payment amounting to
2.42 million resulting from the
late establishment of own resources for non-discharged external transit documents.
Infringement proceedings may be initiated against other Member States.

€

€

The officials appointed by the Commission also found shortcomings in the
monitoring of incomplete declarations, in particular in computerised procedures.
The Commission reminded these Member States of certain obligations which
national administrations must fulfil: they must check that operators comply with
Community regulations concerning international trade, they must require guarantees,
and must make available traditional own resources within the prescribed time limit.

The procedure for repayment/remission and ex post entry in the accounts of
customs debts was inspected in all the Member States during 1999. The most
frequent anomalies concerned wrongful repayment,
lack of legal basis for the
repayment procedure and failure to keep supporting documents in cases of
repayment.

–

–

–

4.3.2

Comments on management of accounting procedures

–

19

The procedures for collecting entitlements were systematically checked in all the
Member States during the period under consideration. Several cases were found of
failure to establish own resources, very late establishment, or failure to recover
entitlements and make them available. Such failures in the system, more often than
not the result of poor monitoring of cases, were found in several Member States.
These shortcomings gave rise to a demand for corrections and interest on late
payment. The Member States were asked to review their procedures, particularly as

Council Regulation (EEC, Euratom) No 2913/92 of 12.10.1992 (OJ L 302, 19.10.1992, p. 1-50);
Commission Regulation (EEC, Euratom) No 2454/93 of 2.7.1993 (OJ L 253, 11.10.1993, p. 1-533).

12

–

–

regards ex post recovery, in all cases where they could lead to serious delays between
the date entitlements are established and the date they are made available.

The Commission carried out systematic, targeted inspections on the arrangements for
keeping the separate account - 34 inspections over the reference period. This area is
also very closely monitored by the Court of Auditors.

local

is kept at

the B account

In most Member States,
level; several thousand
collection offices are therefore involved in day-to-day management. This means that
when they are centralised at national level, individual errors inevitably occur, which
the Court of Auditors has also found and which have an effect on the making
available of traditional own resources. For the Commission,
inspection of the
B account enables it to verify the validity of items entered, including the entry of
guaranteed amounts, and those removed, in particular to ensure that cancellations do
not conceal cases of amounts written off.

Finally, five inspections of the management of the cumulative recovery system in
the rice sector were carried out in 1999 in France, Germany, the Netherlands, the
United Kingdom and Belgium. The cumulative recovery system (CRS) in the rice
sector was introduced for a trial period running from mid-1997 to the end of
June 1998 (subsequently extended to 31 December 1998) following a commitment
given by the Community to GATT. The system, which applied solely to husked rice,
was designed to adjust duties by taking into account the actual price of imported
consignments rather than the conventional system which is based on calculating
flat-rate duties using a reference price (an average world-market price). Where
importers opted for the CRS, the difference between the declared price and the
reference price gave rise to reimbursements aggregated over a six-month period.

A clearer view of the actual situation was provided by the set of inspections carried
out into how the national administrations applied the CRS. Quite apart from any
financial corrections arising from the Commission's assessment of the situation, they
will be useful for the future, in any negotiations with the World Trade Organisation.
In the immediate term, they serve as a test of how the national administrations are
able to apply a complex system and implement reliable and rapidly operational
procedures. They also show the Commission's ability to take the control measures
necessary to correct possible malfunctions in the system. For four Member States,
the inspection report found a number of essentially formal errors in the application of
in more than one respect, contrary to standard customs
a system which was,
practices. Following further investigations by OLAF, this subject is still pending
with respect to a fifth Member State.

4.3.3

Other procedures

–

Cases of failure to submit fraud reports to the Commission,
in breach of
Article 6(5) of Regulation No 1150/00, were detected. Specific observations were
made, some of them relating to the interpretation of the rules. The officials appointed
by the Commission also found a very poor financial follow-up to these cases in some
Member States.

In 2000 the Commission will be inspecting the management of the OWNRES
database of cases of fraud and irregularity and the reliability of communications
transmitted by the system.

13

–

Overall, the management of procedures for establishing and paying the sugar levy
by the Member States is satisfactory. Inspections carried out in this sector uncovered
some anomalies of little financial relevance.

4.4

Regulatory and financial follow-up to Commission inspection measures

4.4.1

Regulatory aspects

Where, in the course of their inspections in the Member States, the officials appointed by the
Commission find flaws or loopholes in national regulations or administrative provisions, they
systematically ask the Member States concerned to take the measures necessary to bring them
into line with Community requirements. Such adjustments, made in both customs law and the
financial field, are an important spin-off from the Commission's inspections.

The anomalies detected by the officials appointed by the Commission are also an essential
source of information on the problems encountered by the Member States in applying
customs regulations and their impact in terms of own resources. Analysis of these anomalies
can lead to the reform of existing provisions and improve the clarity of Community
legislation.

–

–

20

In the field of preferential schemes, there is still the problem of the Member States'
interpretation of the concept of "reasonable doubt" with respect to the applicability
of certificates of origin. The lack of Community rules on the subject for all
preferential arrangements and systems prevents uniform application in the
Member States of the withdrawal of tariff advantages from beneficiary countries
which fail to reply in time or do not provide satisfactory answers. This concept is
important for the defence of the Community's financial interests.

The answers to the questionnaire sent to the Member States before the inspections on
the subject were collated and analysed in a thematic report submitted to the
Commission and presented to all the Member States at the meeting of the Advisory
Committee on Own Resources on 10 December 1999.

The Commission is preparing a draft communication to the Council and the
European Parliament on the concept of reasonable doubt which provides for the more
routine use of an early warning system for importers where there is reasonable doubt
concerning origin. Use of this system - one of the items in the list
in the
Commission's communication (COM(97) 402 of 23.7.1997) which should help to
reform and clarify the conditions for management of preferential schemes - is aimed
at ensuring that operators do not wrongfully plead good faith. The concept is also the
subject of proposals for reform currently under consideration.

On the subject of transit, following the final report and recommendations of the
European Parliament's Committee of Inquiry, the Commission has drawn up an
action plan for transit in Europe.20

On the computerisation of the scheme, two texts establishing the legal basis of the
new system came into force on 31 March 1999: Commission Regulation (EC)

PE 220.895/fin. of 20.2.1997 and COM (97) 188 final of 30.4.1997.

14

amending appendices I,

No 502/199921 of 12 February 1999, amending certain implementing provisions of
the Customs Code, and Decision No 1/1999 of the EC-EFTA Joint Committee on
“common transit”
to the Convention
of 20 May 1987. Operational implementation is in progress. On the legislative front,
Regulation (EC) No 955/199922 of the European Parliament and of the Council of
13 April 1999 made some amendments to the Community Customs Code concerning
external
to be
transit. The corresponding implementing provisions have still
approved. The same goes for the amendments to be made to the common transit
procedure.

and III

II

The reform is based on the search for a balance between the objectives of facilitating
trade under transit procedures and maintaining a sufficient and uniform level and
quality of control in all 22 countries using the Community and common transit
procedures. Such a balance is to be achieved by adjusting formalities and control
methods to the risks involved in each transit operation so that management by
customs authorities is more efficient, simplifications can be offered to operators who
have proved their reliability, and specific constraints can be imposed for the transit of
goods identified as susceptible to fraud. While still giving the principal
the
possibility of proving that the operation has been completed or, failing that, of
identifying the place where the customs debt is incurred, this reform should make it
easier to identify the customs authority responsible for recovery of the own resources
and thus improve the entry in the accounts for the customs debt in the event of fraud.

At operational level, coordinated measures provided for in the action plan have been
launched, such as the establishment of a network of transit coordinators in the 22
Community/common transit countries
to strengthen administrative
cooperation, the drafting of national plans and reports on the management and
control of transit operations in order to ensure correct application and effective
monitoring of the rules, alone able to prevent and effectively combat fraud, and the
publication of a practical handbook.

in order

4.4.2

Financial aspects

€

Over the reference period (1997-1999), additional entitlements (principal amounts) totalling
€
3 035 347 were paid to the Commission following observations it made in reports on joint or
55 233.05 (1.81%) of this sum was paid following inspections by
independent inspections.
the Court of Auditors. Interest for late payment was also charged, pursuant to Article 11 of
Regulation No 1150/00, for delays in making available own resources detected during
Commission inspections. Over the period 1997-1999, interest for late payment paid by the
Member States totalled
4 202 739.07 (60.28%) of this sum is the result of action
by the Court of Auditors.

6 971 898.

€

€

The poor record of Member States in keeping the separate account and implementing
accounting procedures has led the Commission to pursue systematic inspections in this field,
particularly the accounting treatment given to amounts evaded or irregularities

Since the installation in 1997 of the Ownres computer application in all the Member States,
the Commission has received over 10 000 reports concerning fraud and irregularities of over

21

22

OJ L 65, 12.3.1999, p. 1-49.
OJ L 119, 7.5.1996, p. 1-5.

15

€

10 000 detected by the Member States (see Annex 4). This application also allows
Member States to indicate what recovery measures have been taken and the amount of
entitlements recovered.

The data is constantly updated in another computer application of the Budget DG which
makes it possible to carry out a detailed analysis of the information received. Processing of
this data allows not only conventional financial analysis but also very detailed risk analysis,
the results of which are presented to the Member States at the meetings of the Advisory
Committee on Own Resources in July and December each year. This information is used on a
regular basis to interrogate the base and so adapt the verification programme as necessary to
the Member States to be inspected.

The Commission hopes to ensure that the information sent by the Member States is both
reliable and complete. It has therefore included OWNRES in its inspection programme, for all
the Member States, for 2000.

This monitoring activity is carried out in close collaboration with the other Commission
departments, since recovery involves application by the Member States of different rules
covered by several Directorates-General, and of course the Anti-Fraud Office. For instance,
the choice of cases dealt with in the B report is made in agreement with OLAF. By gaining a
better knowledge of the situation concerning recovery, the Commission is better able to take
steps to safeguard the financial
remedy the
Member States' shortcomings.

the Community which will

interest of

4.4.3

Organisational aspects

In the medium term, the Commission is developing new strategies aimed at providing a
clearer framework for checks and maintaining the present level of efficiency in a context of
limited resources, especially human resources. This new way of working is based on:

–

–

to be inspected sent

to the
a detailed questionnaire on the specific subject
Member States, wherever possible, ahead of the inspection. The aim is to ensure that
the Member States are applying the Community rules properly in the area in
question. The replies to the questionnaire will give the Commission officials a
general picture of national practices in force and will enable them, if necessary, to
adapt the inspection procedure, to focus their attention on the most sensitive areas
and to formulate any observations to the Member States being inspected in more
precise terms. The replies of the national administrations can also be analysed to
produce thematic reports of interest
to other Commission departments and the
Member States (see thematic report on preferential schemes);

an inspection handbook, for the authorised Commission officials. This covers the
main guidelines to be followed before and during each inspection. The handbook is a
precise and detailed working tool. The measures listed represent the main aspects
which must be checked, both customs arrangements and accounting procedures. The
content of the handbook can of course be changed depending on the circumstances of
the mission (duration, human resources, etc.) and the national administration
involved (organisation, infrastructure, etc.).

16

4.5

Financial responsibility of the Member States

Alongside its review of working methods for a new approach to inspections, the Commission
is continuing to look at the more political, and particularly topical question of the principle of
the financial responsibility of the Member States. Its aim is to make the Member States
responsible for putting an end to a situation which encourages poor management of
Community own resources, by penalising the Member States which are most conscientious in
managing revenue.

The principle of the Member States' financial responsibility is based on Article 8 of Council
Decision 94/728/EC, Euratom. This Article lays down the principle that the Member States
are responsible for collecting own resources according to their own national provisions which
this,
must be adapted to meet Community requirements. Since,
Member States receive 10%, or even 25%, of the amounts collected, the Commission feels
that it is entitled to demand that the Member States perform their task with utmost diligence.
Traditional own resources as well as VAT and the "fourth resource" (GNP), are made
available to the Union in order to give it the funds required to cover the expenditure arising
from the implementation of budget commitments decided at Community level.

in consideration for

Therefore, errors made by a national administration in the management of the collection
system, which reduce the amount of traditional own resources made available, automatically
trigger the financial responsibility of the Member State principally because of its failure to
comply with Article 8 of the Own Resources Decision and also because it is not possible to
ensure full application of Regulation No 1150/00.

Breakdown of financial burden resulting
from administrative errors

subsidy

general level of
errors

penalty

Member State A

Member State B

Member State C

160
140
120
100
80
60
40
20
0

This table illustrates the present situation: use of the compensation mechanism by the fourth
resource to solve the problem of reduced availability of own resources resulting from
administrative errors by the Member States.

The objective of the system should be that each Member State assumes the consequences of
its own errors. At present, as the overall financial burden must remain the same for all the
Member States and the revenue not collected in the form of traditional own resources is
compensated for by GNP-based contributions, the situation is quite different.

The above chart demonstrates that, with an average level of error of 100, the national
authorities which are efficient in terms of organisation - and thus below the average level -
compensate for the shortcomings of less vigilant national authorities which are reflected in a
level of administrative errors that is higher than the average.

The financial responsibility of the Member States for failure to establish entitlements thus
making the debt out of time within the meaning of Article 221(3) of the Customs Code, and

17

responsibility in relation to requests to write amounts off has always been implemented and
has been standard practice since 1989, without any serious challenge of the legal basis by the
Member States. The same is not
true for Member States' responsibility as a result of
administrative errors which could not reasonably have been detected by the person liable for
payment (Article 220(2)(b) of the Customs Code). Although the Customs Code relieves the
person liable for payment of his responsibility, it says nothing about the responsibility of the
Member States
committed by their
administrations, this aspect falling within the scope of Community financial law, in particular
the Own Resources Decision and Regulation No 1150/00.

the Communities because of

towards

errors

Following the adoption of Regulation No 1150/00, in particular Article 2 which defines the
concept of establishment, the Commission began to consider how better to attribute the
financial consequences of administrative errors. Accordingly, in 1992 it submitted to the
Council a proposal for the amendment of Regulation No 1150/00 providing for ad hoc entry
in the accounts (“self-assessment”) by the Member States of amounts not entered in the
accounts as a result of errors. However, the proposal was opposed by the Member States,
which preferred to keep the system of compensation via the "fourth resource".

Following severe criticism by the Court of Auditors (Annual Reports of 1994 and 1995), one
of the operational conclusions of phase III of the SEM 2000 initiative, approved by the
Madrid European Council of December 1995, underlined the need to improve the financial
management of own resources.
to establish openness in the treatment of
administrative errors, without resorting systematically to control measures, in July 1997 the
Commission re-tabled a proposal to the Council to oblige Member States to establish and
make available entitlements of over
2 000 which could not be charged to the debtor because
of administrative error. Once accepted, this provision would allow the Commission to target
than on detecting isolated
its checks better and focus on analysing systems rather
administrative errors.

In order

€

This amendment, which is currently under consideration, once again aims to introduce
"self-assessment" for certain administrative errors. Since the amendment has not (yet) been
accepted, it is up to the Commission to continue to detect and act against such administrative
errors, by its own means. The Member States have some real benefits to gain from the
application of the principle of financial liability:

–

–

–

fair distribution of the financial burden according to the principle of sound and
efficient management (SEM 2000), since the loss of traditional own resources
resulting from the negligence of a Member State is made good by that Member State
and not by the national budgets of all the Member States via an increase in the fourth
resource. In this way, Member States' efforts to ensure optimal operation of their
collection systems will be rewarded;

a picture of the consequences of errors making it possible to take measures to
remedy the situation. Transparency of costs will encourage better administration;

a good performance indicator making it possible to compare the efficiency of
collection, both among the Member States and at national, or even local level.

Application of the principle of financial liability will, however, have some disadvantages for
Member States which do not (fully) meet their obligations, since it will mean extra costs
compared with the system of "compensation through the fourth resource".

18

In almost all cases where debts fall out of time because the national administration has failed
to act and the Commission decides to refuse the request to write off amounts on the grounds
that the Member State has not shown due diligence, the Commission's current practice is to
pursue each case individually. Generally speaking the Member States eventually accept the
Commission's position without the need for infringement proceedings. However, when it
comes to the financial consequences of administrative errors, in particular those which could
not reasonably have been detected by the operator, the Commission faces firm opposition
from some Member States. For this reason, it
is seeking to develop a strategy to bring
infringement proceedings in a representative case.

As soon as proceedings are initiated for this typical case, the Commission will inform all
other Member States with similar cases that the action to be taken will depend on the final
judgment of the Court of Justice. Member States will be asked to pay the amount at issue
(which will of course be reimbursed if the Court does not find in the Commission's favour) in
order to limit as far as possible the amount of interest for late payment which would otherwise
accumulate.

4.6

Application of Article 17(2) of Regulation No 1150/00

The number of reports by Member States on cases where amounts were written off has
fallen to 26 cases in 1997-1999 (see Annex 3) from 32 in the previous period. The 26 cases
reported over the period 1997-1999 represent entitlements totalling
5 064 864; for those
cases still pending additional information has been requested or the Commission will carry
out a detailed examination to determine whether the Member States concerned showed
sufficient diligence in attempting to recover the entitlements involved.

€

Such reports have been made by some Member States: Belgium (3 reports), Denmark (1),
the Netherlands (8) and the United Kingdom (9). The
Spain (1), France (3),
question is how well Member States are applying the provisions of Article 17(2) of
Regulation No 1150/00.

Ireland (1),

Reports by Member State of cases where amounts have been written off:

Reports by Member State of cases where
amounts have been written off

10
8
6
4
2
0

i

m
u
g
e
B

l

k
r
a
m
n
e
D

i

n
a
p
S

e
c
n
a
r
F

d
n
a
e
r
I

l

s
d
n
a
l
r
e
h
t
e
N

i

m
o
d
g
n
K
d
e
t
i
n
U

19

There is therefore a real, substantive problem concerning both the methods of collection
employed by the national authorities and the uniform application of the provisions of
Article 17(2) of Regulation No 1150/00.

The general picture is as follows:

Old
regulation
14.15%

Inadmissible

0.46%

Rejected
18.20%

% OF AMOUNTS

Pending
19.70%

Accepted
47.49%

Comments on pie-charts:

Inadmissible
3.84%

% OF CASES

Pending
11.53%

Accepted
53.87%

Old
regulation
11.53%

Rejected
19.23%

PRESENT SITUATION

Amount in euros

% of cases

% of amount

(a)

1 case was rejected as inadmissible

3 cases were subject to the old rules

in 5 cases payments were made following rejection

(b)

(c)

3 cases are still pending

in 14 cases, diligence was found

23 734

716 692

922 148

997 891

2 404 399

3.84 %

11.53 %

19.23 %

11.53 %

53.87 %

0.46 %

14.15 %

18.20 %

19.70 %

47.49 %

Practical application of the present system of writing off amounts is far from satisfactory,
both from the point of view of the quality of accounting information supplied to the
Commission and from the point of view of the national statutes of limitation. Some
Member States are forced by national statutes of limitation to continue recovery procedures
for Community purposes without any hope of success. For this reason, the proposal for
amendment of Article 17(2)23 makes a clear distinction between amounts declared
irrecoverable by reasoned decision of the administrative authority and amounts declared
irrecoverable after a period of five years.

the
The amendment seeks to introduce a cut-off date of five years applicable in all
Member States for removing unrecovered amounts from the B account and examining the
circumstances which led to failure to recover. The Commission has also proposed to raise the
threshold for the notification of cases to the Commission from

10 000 to

50 000.

€

€

23

COM(97) 343 of 3.7.1997.
COM(98) 209 of 3.4.1998.

20

5.

ASSESSMENT OF HOW THE INSPECTION ARRANGEMENTS OPERATE

5.1

General assessment: inspections are still necessary

–

–

–

Whenever action needs to be taken with regard to the practical operation of the
traditional own resources system, the Commission has a whole armoury of different
measures to draw on: it can make one-off corrections of the anomalies it finds,
remedy shortcomings
in the case of persistent
malfunctions, clarify Community legislation and work towards improving it.

in national procedures or,

As far as the future is concerned, the Commission's inspection activities are clearly
the specific checks performed by the authorising officer under
justified:
(Article 18) and
Regulation No 1150/00, both in scrutinising own resources
analysing information sent by the Member States on the organisation of their
inspections (Article 4(1) of the Regulation) and the results of these inspections
(Article 17(3)) give a precise picture of the operation of the inspection system for
own resources and its implementation in the Member States.

The most visible effects of on-the-spot inspections are the financial corrections
made where legislation has been applied incorrectly, and the collection of interest
for late payment to offset the loss of revenue incurred. Moreover, inspections are still
the best way of checking that customs legislation is properly enforced and
identifying any problems that crop up. The observations made by the Commission
officials may give rise to proposals designed to simplify and restructure the
legislative framework.

Analysis of malfunctions in the system for collection at national level which lead to
very low recovery rates clearly shows the unsuitability of national procedures and the
disparities between them and the slowness of legal proceedings. As soon as the
Commission learns that a case of fraud or irregularity involving a significant amount
has been detected but not reported as required by Regulation No 1150/00, it reminds
the Member State in question of its obligations as regards the protection of the
financial interests of the Community. The Commission also gathers information from
the Member States on the state of play regarding amounts established and any
amounts recovered, or the reasons why recovery has not been effected.

5.2

Relations with the Court of Auditors: increased importance

The Commission keeps up regular contact with the Court of Auditors. The Commission and
the Court exchange information about the inspections they are planning; this ensures that
there is no overlap of
the same national administration. The Court
automatically receives a copy of every inspection report sent to the Member States and the
replies they send. When preparing its own inspections, the Court is able to take advantage of
the information and experience of the Budget Directorate-General.

inspections of

The Court sends the Commission copies of the sector letters it sends to the Member States
inspected and copies of their replies. On the basis of these documents, a "task force" set up for
the purpose within the unit is able, on the basis of the reports drawn up by the inspectors
responsible for the Member States in question, to follow up individual cases by requesting
additional information from the Member States or making analyses and comments. The
annual reports and special reports and Statements of Assurance (DAS) are also followed up

21

by the task force through draft replies and informal meetings. The results are discussed at an
adversarial meeting.

As part of the audit of the Commission's activities in implementing the revenue side of the
budget, officials of the Court of Auditors monitor the activities of the departments concerned.
They have free access to all the information they require.

the Advisory Committee on Own Resources

A Special Report by the Court of Auditors on guarantees published in 1999 gave rise, at the
to three
meeting of
communications from the Commission on guarantees in the event of an appeal (Article 244 of
the Code) and in the event of deferred payment (Articles 74 and 192 of the Code) and on the
comprehensive
procedure
(Article 361 CCIP). The Commission reminded the Member States of the rules in force and
the possible consequences, in financial terms, of failure to comply.

last December,

Community

guarantee

external

transit

under

the

A questionnaire on the application of Article 244 of the Customs Code was sent to the
Member States to ensure that their national provisions were in line with Community rules.
Also, because of the consequences of entering guarantees in the accounts, the inspection
programme drawn up by the Budget Directorate-General for 2000 included as one of its main
subjects inspection of the keeping of the B account by the Member States.

5.3

Joint audit initiative

Under SEM 2000, the Commission encouraged the Member States' audit departments to pool
their experiences and best practices. The results obtained through this form of cooperation
which began just over five years ago have led the Commission to consider adopting a new
approach to joint inspections based on use of the joint audit initiative in order to meet the
need to adapt controls with a view to the forthcoming enlargement of the Union.

In 1993 and 1994 staff from the internal audit departments of the Dutch, Danish and United
Kingdom customs authorities met on several occasions to pool their experiences. They came
to the conclusion that closer cooperation between national audit departments and the
Commission could be particularly beneficial for the control of traditional own resources. The
auditors of the three pioneer Member States, soon joined by Portuguese observers, prepared
and tested a first audit module, a reference framework for the evaluation of inspections carried
out by the Member States in the field of traditional own resources and for the development of
future operational modules.

The Commission encouraged the setting up of an Audit Sub-Group within the Advisory
Committee on Own Resources in 1996, thus sowing the seed for the development and
extension of the joint audit initiative. A seminar held in Denmark in June 1998 chaired by the
Commission brought together delegates from audit services of twelve Member States. This
was a decisive step in the process of establishing the joint audit initiative, as it laid the
foundations of a real long-term audit strategy. It enabled the Member States which had taken
an active part
the
Member States the techniques they may use in their approach to the application, inspection
and audit of their own systems for controlling the collection of own resources. Delegates were
also able to compare different experiences and draw up a timetable of further activities.

in the initial development of the audit modules to present

to all

22

Much has already been achieved. The audit sub-group now has 11 active members.24 Five
audit modules have been produced on free circulation, transit, inward processing, customs
warehouses and preferential schemes; another is about to be completed on the separate
account. The modules and the data necessary to develop future modules have been collected
in an audit handbook. The Commission has taken on some of the costs of producing the
modules.

The Commission is currently considering whether the audit initiative can be a springboard for
the future development of its audit strategy to target the Member States' internal inspections.
The Commission is looking in particular at the idea of delegating joint inspections in the field
of traditional own resources, to be carried out on the basis of the modules, to national audit
bodies set up in the Member States, on the basis of an exchange of letters. The Commission
would then assess the results and the quality of the checks and ultimately give its agreement
or ask for further information. A trial will be made before the end of 2000 with the
Netherlands.

The results of this measure will be assessed to see whether this new approach gives the
Commission sufficient guarantees as to the real effectiveness of Member States' internal audit
systems. If the trial is conclusive, the Commission will then be able to establish a line of
conduct for future inspections, in cooperation with the Member States.

*

*

*

24

Austria, Belgium, Denmark, Finland, France,
United Kingdom.

Ireland, Netherlands, Portugal, Spain, Sweden,

23

Number and nature of inspections carried out in the Member States in 1997-1999

ANNEX 1

MEMBER
STATE

Belgium

Denmark

Germany

Greece

Spain

France

Ireland

Italy

Luxembourg

Netherlands

Portugal

United
Kingdom

Austria

Finland

Sweden

TOTAL

1997

1998

1999

Total

Total

Autonomous
inspection

Joint
inspection

Autonomous
inspection

Joint
inspection

Autonomous
inspection

Joint
inspection

Autonomous
inspection

Joint
inspection

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

2

3

3

3

3

2

3

2

2

2

3

3

3

3

3

3

3

3

3

3

3

3

3

3

3

15

10

15

10

15

25

45

1

1

1

1

1

5

24

Subjects inspected by year and by Member State

Customs procedures

1997

1998

1999

ANNEX 2

Specific topics

External Community transit

International road transit (TIR)

EC/San Marino Agreement

Preferential tariff schemes

Repayment/Remission

Accounting procedures

Establishment

"A" Account

"B" Account

Ex post recovery

Belgium, France

Germany

Italy, Spain

Netherlands

United Kingdom

Belgium, France

Germany

Italy, Spain

Netherlands

United Kingdom

Italy

All MS

All MS

All MS

All MS

All MS

Treatment of fraud and irregularities

All MS

Treatment of
written off

cases where

entitlements are

Application of
recovery system for rice (Reg. 703/97)

the rules on the cumulative

Sugar/Isoglucose

Making
Commission

own

All MS

All MS

1997

1998

1999

All MS

All MS

France
Spain,
Netherlands, Greece,
Portugal

Luxembourg

United Kingdom

All MS

All MS

All MS

All MS

Belgium, France

Germany, Netherlands

United Kingdom

Germany

Austria

Spain, France

Finland, Sweden

Italy, Netherlands

United Kingdom

resources

available

to

the

All MS

All MS

All MS

25

Application of Article 17(2) of Regulation No 1150/00

Reports 1997-1999

ANNEX 3

Reference
year

Member
State

Reasons given for
release from
obligation

Entitlements
at stake
(euros)

Commission position

Status of case

1997

1998

1999

BE

DK

FR

FR

FR

BE

UK

UK

UK

UK

UK

BE

UK

UK

UK

UK

NL

NL

NL

NL

NL

NL

NL

NL

IR

ES

Bankruptcy

Bankruptcy

35 910

Acceptance

11 893

Rejection

Debtor insolvent

215 125

10 734

Rejection

Bankruptcy

Bankruptcy

Paid

Old rules

Paid

23 734

Reported early

Debtor insolvent

13 390

Acceptance

Debtor insolvent

639 434

Rejection

Paid

Debtor insolvent

1 152 850

Acceptance

Debtor insolvent

178 075

Acceptance

Bankruptcy

16 606

Acceptance

Debtor insolvent

Debtor insolvent

150 622

172 192

Debtor insolvent

14 650

Acceptance

Under scrutiny

Old rules

Debtor insolvent

824 190

Information requested

Under scrutiny

Bankruptcy

Debtor insolvent

Debtor insolvent

Acceptance

Acceptance

22 585

24 183

329 375

Debtor not traced

111 837

Rejection

Debtor not traced

148 250

Rejection

Bankruptcy

Bankruptcy

Bankruptcy

Bankruptcy

Bankruptcy

33 907

24 551

33 471

75 357

70 040

Acceptance

Acceptance

Acceptance

Acceptance

Acceptance

Old rules

Paid

Paid

Debtor insolvent

708 824

Acceptance

Debtor insolvent

23 079

Information requested

Under scrutiny

Total 97/99

26 cases

5 064 864

26

ANNEX 4

OWNRES

Number of communications received by OWNRES

at 31 December 1999

1989-1996

1997

1998

1999

TOTAL

MEMBER STATES

143

74

54

1

106

113

2

792

5

370

125

99

45

15

311

93

509

8

106

254

54

384

2

907

149

22

36

47

538

188

320

2

90

229

64

191

1

215

234

25

42

98

229

87

371

3

93

203

38

152

4

64

63

7

16

8

1 221

442

1 254

14

395

799

158

1 519

12

1 556

571

153

139

168

Belgium

Denmark

Germany

Greece

Spain

France

Ireland

Italy

Luxembourg

Netherlands

Austria

Portugal

Finland

Sweden

268

725

639

2 212

3 607

2 876

572

1 910

2 204

10 605

United Kingdom

TOTAL

27