WRITTEN QUESTION E-3286/01 by Paulo Casaca (PSE) to the Commission. CAP financial adjustments.
Date: 2001-11-27
Institutions: European Parliament, Provisional data
Subjects: Netherlands, Portugal, common agricultural policy, fraud against the EU, skimmed milk powder

20.6.2002

EN

Official Journal of the European Communities

C 147 E/143

The Commission has just received the Spanish authorities’ reply and is in the process of examining it.
Whatever the circumstances, as guardian of the Treaties,
the Commission will be taking any steps
necessary to ensure that Community law is complied with.

The Commission will be sure to inform the Honourable Member on the results of its investigation.

(2002/C 147 E/150)

WRITTEN QUESTION E-3285/01

by Paulo Casaca (PSE) to the Commission

(27 November 2001)

Subject: Tobacco smuggling

There emerges from the OLAF annual report for the year 2000 a highly disturbing picture of fraud in the
own-resources field which is perpetrated in particular by means of tobacco smuggling.

Could the Commission confirm whether or not the country which produces the most frequently seized
tobacco brands is a Member State?

Could the Commission confirm that the country in question is the United Kingdom?

What action has the Commission taken in order to put an end to this state of affairs?

Answer given by Mrs Schreyer on behalf of the Commission

(25 January 2002)

The Commission would like to point out that, in the year 2000, approximately 50 % of the cigarette
seizures in the Community which have been notified to the European Anti-fraud Office (OLAF) were of
brands popular in the United Kingdom. These are brands which are produced by United Kingdom
manufacturers.

The Commission co-operates closely with the relevant services in the Member States in order to identify
the source of, and to combat, international cigarette smuggling.

(2002/C 147 E/151)

WRITTEN QUESTION E-3286/01

by Paulo Casaca (PSE) to the Commission

(27 November 2001)

Subject: CAP financial adjustments

From the reply to my written question E-2107/01 (1) I have finally been able to deduce beyond any doubt
that the Commission has not carried out any financial adjustments in respect of the improper payment by
the Dutch authorities of subsidies to facilitate sales of skimmed-milk powder, despite the fact that the
Court of Auditors had detected payments made by those authorities in respect of 3 350 kg of skimmed-
milk powder, an analysis of which (carried out prior to the payments) revealed that
it had been
adulterated.

However, in its reply to paragraph 70 of the Court of Auditors report No 4, the Commission states its
intention that Portugal should be required to make financial adjustments for having failed to carry out
computerised cross-referencing of files relating to subsidies paid in respect of suckling cows and male
bovines on its own initiative, but only when it was suggested that it should do so.

C 147 E/144

Official Journal of the European Communities

EN

20.6.2002

The two cases cannot be regarded as equally serious since, in the first case, it is not possible to prove that
the subsidised quantities were not adulterated, as there is no guarantee that the quantities adulterated were
not greatly in excess of the quantities actually detected. In the second case, however, comprehensive
verification is not only possible but was actually carried out, for which reason the Commission would have
been expected to take the opposite course of action to the one it followed.

What exactly is the legal basis for the Commission’s actions? Does the Commission not think that it is
being much more strict with regard to the direct payments made to farmers covered by the IACS than
with regard to subsidies paid to trading and industrial companies in the form of sales and export refunds?
Does it not consider that these double standards distort competition to the advantage of major economic
groups (which are the main beneficiaries of the second type of subsidy) and at the expense of farmers (who
are the beneficiaries of the first type of subsidy)?

(1) OJ C 40 E, 14.2.2002, p. 187.

Answer given by Mr Fischler on behalf of the Commission

(8 January 2002)

The Honourable Member refers to previous questions with regard to the follow-up of the Court of
Auditors findings concerning the use of skimmed milk as animal feed in the Netherlands. The Honourable
Member deduces that the Commission made no financial adjustment in respect of a quantity of 3 350
kilograms (kg) of skimmed milk powder. This is correct. As previously stated, the aid in question
(NLG 5 136,89) has already been credited to the European Agricultural Guidance and Guarantee Fund
(EAGGF) in December 1997. There is therefore no financial correction to be imposed on the Netherlands.

A comparison cannot be made with the Court of Auditors finding for Portugal with regard to failure to
carry out computerised cross-referencing. In fact the financial corrections decided for Portugal in respect of
the suckler cow and male bovine premium schemes were due to a whole series of weaknesses concerning
the general control system, and established by the Commission audit conducted in 1998. Furthermore, the
Honourable Member implies that the Commission acted only when it was suggested by the Court, but this
is not at all the case since this clearance of accounts audit had already given rise to a refusal of Community
financing in the Commission Decision of 5 July 2000 (1) long before the remarks of the Court became
known.

Contrary to the audit evidence found in Portugal, the Dutch matter concerning skimmed milk was an
isolated case. The Court did not suggest that this was a widespread problem and, considering that the
expenditure involved represented a minuscule portion of the national total under the measure (0,002 %), it
would be inappropriate and disproportionate to apply a correction in this case for systems failure. The
appropriate action is recovery of the aid incorrectly paid, and, as stated, the Dutch authorities had already
recovered and credited the sum concerned.

The Commission wishes to state that the same standards for imposition of financial corrections apply in all
sectors under the clearance of accounts for EAGGF expenditure.

(1) 2000/449/EC: Commission Decision of 5 July 2000 excluding from Community financing certain expenditure
incurred by the Member States under the Guarantee Section of the European Agricultural Guidance and Guarantee
Fund (EAGGF), OJ L 180, 19.7.2000.