Commission Regulation (EC) No 1423/2006 of 26 September 2006 establishing a mechanism for appropriate measures in the field of agricultural spending in respect of Bulgaria and Romania
Date: 2006-09-26
Institutions: European Commission
Subjects: Bulgaria, Romania, accession to the European Union, agricultural expenditure, aid system, aid to agriculture, management audit, management information system

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Official Journal of the European Union

28.9.2006

COMMISSION REGULATION (EC) No 1423/2006

of 26 September 2006

establishing a mechanism for appropriate measures in the field of agricultural spending in respect of
Bulgaria and Romania

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty of Accession of Bulgaria and
Romania, and in particular Article 4(3) thereof,

of the Community’s agricultural support in these States.
The Commission has concluded on the basis of infor-
mation provided by Bulgaria and Romania until the date
of adoption of this Regulation and on the basis of its
own inspections that
there is a real risk as to the
existence and operability of the IACS in these States.

Having regard to the Act of Accession of Bulgaria and Romania,
and in particular Article 37 thereof,

(5)

Whereas:

(1)

(2)

(3)

the Act of Accession,

the
According to Article 2 of
the acts adopted by the institutions
provisions of
before accession shall be binding on Bulgaria and
Romania and shall apply in those States under
the
conditions laid down in the Treaties and the aforesaid
Act.

or Romania

the Act of Accession enables
appropriate measures
failed

the
Article 37 of
in case
Commission to take
implement
Bulgaria
commitments
the
accession negotiations, causing a serious breach of the
functioning of the internal market or an imminent risk
of such a breach.

undertaken in the

context of

has

to

Article 17 of Council Regulation (EC) No 1782/2003 of
29 September 2003 establishing common rules for direct
support schemes under the common agricultural policy
and establishing certain support schemes for farmers and
amending Regulations
(EC) No
1452/2001, (EC) No 1453/2001, (EC) No 1454/2001,
(EC) 1868/94, (EC) No 1251/1999, (EC) No 1254/1999,
(EC) No 1673/2000,
(EEC) No 2358/71 and (EC) No
2529/2001 (1) requires Member States to set up an inte-
grated administration and control system, hereinafter
referred to as the ‘IACS’.

(EEC) No 2019/93,

(6)

(7)

(4)

As of their accession, Bulgaria and Romania are required
to have an IACS in place in order to control a large part

for direct payments

Serious deficiencies in the IACS of Bulgaria or Romania
would lead to a situation where the payments of agri-
cultural support which should be controlled under this
system would not or not properly be controlled. There
would exist, therefore, a serious risk that producers who
are not, either in total or in part, entitled to the agri-
cultural support would receive this support,
thereby
being put in a more favourable position than foreseen
in Community legislation. For each of these States ex-
penditure
and rural develop-
ment controlled under the IACS will amount to around
80 % of
and involve
substantial amounts of several hundreds of millions of
euro, which demonstrates the importance of a properly
functioning IACS for the introduction of the common
agricultural policy in the two countries and the good
functioning of the Community’s internal market. As the
more favourable position in combination with the sums
involved is likely to have an effect on trade of agri-
cultural products in the internal market, it would cause
an imminent risk of a serious breach of the functioning
of this market.

total agricultural

expenditure

This risk cannot be properly addressed solely by the
application of Articles 17 and 27 of Council Regulation
(EC) No 1290/2005 of 21 June 2005 on the financing of
the common agricultural policy (2), given the nature of
the systems and procedures foreseen in these provisions.
It is therefore necessary to have recourse to Article 37 of
the Act of Accession allowing the Commission to take
the appropriate measures aimed at eliminating the risk.

After the accession, both Bulgaria and Romania should,
on the basis of a report from an independent body, make
a declaration to the Commission stating whether their
IACS exists and is operational. In case of deficiencies,
these States should remedy the deficiencies immediately.

(1) OJ L 270, 21.10.2003, p. 1. Regulation as last amended by
L 208,

(EC) No 1156/2006 (OJ

Commission Regulation
29.7.2006, p. 3).

(2) OJ L 209, 11.8.2005, p. 1. Regulation as amended by Regulation

(EC) No 320/2006 (OJ L 58, 28.2.2006, p. 42).

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Official Journal of the European Union

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(8)

If the Commission, on the basis of the declaration made
by Bulgaria and Romania or the report from the inde-
pendent body or its own audit
findings, reaches the
conclusion that deficiencies persist which are so serious
as to affect the proper functioning of the overall system
for the management and control of agricultural expen-
diture covered by the IACS and that, therefore, there
remains an imminent risk of a serious breach of the
functioning of the internal market, it should provisionally
reduce for a fixed period of one year the monthly and
intermediate payments
to be made to Bulgaria and
Romania under Articles 14 and 26 of Regulation (EC)
reduction should
No 1290/2005. The provisional
correspond to the percentage that
the Commission
applies in accordance with its own guidelines in the
context of the conformity clearance if a Member State’s
control system is gravely deficient and there is evidence
of widespread irregularities. Such a provisional reduction
is necessary to make the State concerned remedy the
deficiencies of
its IACS so as to prevent or detect
irregular payments and fraudulent practices and recover
any unduly spent amounts, thereby eliminating the risk
of
the
Community’s internal market.

serious breach of

functioning of

the

a

Community legislation, to the extent that they relate to
the management and control of the aid regimes applicable
in Bulgaria and Romania;

(b) the IACS and the other elements necessary to ensure the
correct payment of the support referred to in Article 3 of
this Regulation are operational within their respective terri-
tories.

2.
The declaration provided for in paragraph 1 shall be made
on the basis of a report established by a body which has the
necessary expertise and is independent from the paying agency
and the coordinating body referred to in, respectively, Article
6(1) and 6(3) of Regulation (EC) No 1290/2005. Bulgaria and
Romania shall each nominate the body delivering the report.

shall

report

The
the
requirements provided for in paragraph 1 are fulfilled. It shall
be made available to the Commission.

an opinion on whether

express

(9)

The Commission should review after 12 months whether
or not to continue with the provisional reduction of the
monthly and intermediate payments.

(10)

The provisional reduction should be applied only in
respect of
that are managed and
controlled through IACS.

support measures

(11)

The provisional reduction should be followed up in the
context of the conformity clearance procedure referred to
in Article 31 of Regulation (EC) No 1290/2005 and
should be without prejudice to the decisions to be
taken in that context,

HAS ADOPTED THIS REGULATION:

Article 1

By the end of the third month following the accession,
1.
Bulgaria and Romania shall each make a declaration at mini-
sterial level to the Commission stating whether:

(a)

the elements of the integrated administration and control
system, hereinafter IACS, referred to in Article 18 of Regu-
lation (EC) No 1782/2003 have been set up within their
relevant
respective

in accordance with the

territories

Article 2

The Commission shall

1.
take a Decision provisionally
reducing the monthly and intermediate payments referred to
in Articles 14 and 26 of Regulation (EC) No 1290/2005 by
25 % if it concludes, either on the basis of the declaration or the
report referred to in Article 1 of this Regulation or its own
audit findings, and after giving the Member State concerned
opportunity to submit
its comments within a reasonable
period of time, that:

(a) Bulgaria or Romania does not comply with its obligations

under Article 1(1) and (2);

(b) the elements referred to in Article 1(1)(a) have not been set

up;

(c) although the elements referred to in Article 1(1)(a) have
been set up, the IACS or the other elements necessary to
ensure the correct payment of the support referred to in
Article 3 are so seriously deficient as to affect the proper
functioning of the overall system.

Bulgaria and Romania shall take all the necessary measures to
remedy immediately any deficiencies identified.

The provisional reduction shall be applied in respect of
from 1
and intermediate payments made

2.
the monthly
December 2007 up to 30 November 2008.

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The Commission shall prolong the provisional reduction
3.
for further periods of 12 months if one or more of
the
conditions referred to in paragraph 1 continue to be fulfilled.

The provisional reduction shall be without prejudice to
4.
any reductions or suspensions pursuant to Articles 17 and 27
of Regulation (EC) No 1290/2005.

Article 3

The provisional reduction provided for in Article 2 shall be
applied in respect of support granted under the following
measures:

(a)

the transitional simplified income support for farmers in the
new Member States provided for in Article 143b of Regu-
lation (EC) No 1782/2003 or the aid regimes referred to in
Titles III and IV of that Regulation;

(c)

the payments provided for in points (i) to (v) of Article
36(a) and in points (i) to (v) of Article 36(b) of Council
Regulation (EC) No 1698/2005 (1) with the exception of
those relating to the measures referred to in Article 39(5)
of that Regulation and the measures pursuant to Article
36(b)(i) and (iii) as far as establishment costs are concerned.

Article 4

Any decision taken on the basis of
this Regulation or the
absence of such a decision shall be without prejudice to the
conformity clearance referred to in Article 31 of Regulation (EC)
No 1290/2005.

(b) the complementary national direct payments provided for in
Article 143c of Regulation (EC) No 1782/2003, financed
under subsection E of section I of Annex VIII to the Act of
Accession;

This Regulation shall enter into force subject to and on the date
of the entry into force of the Treaty of Accession of Bulgaria
and Romania to the European Union.

Article 5

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

Done at Brussels, 26 September 2006.

For the Commission

Mariann FISCHER BOEL
Member of the Commission

(1) OJ L 277, 21.10.2005, p. 1.