Proposal for a Council Regulation on scrutiny by Member States of transactions forming part of the system of financing by the European Agricultural Guarantee Fund (Codified version)
Date: 2006-12-19
Institutions: European Commission
Subjects: EAGGF Guarantee Section, State aid, administrative check, codification of EU law, control of State aid, disclosure of information

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 19.12.2006 
COM(2006) 813 final 

2006/0265 (CNS) 

Proposal for a 

COUNCIL REGULATION 

on scrutiny by Member States of transactions forming part of the system of financing by 
the European Agricultural Guarantee Fund 

(Codified version) 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

In  the  context  of  a  people’s  Europe,  the  Commission  attaches  great  importance  to 
simplifying  and  clarifying  Community  law  so  as  to  make  it  clearer  and  more 
accessible to the ordinary citizen, thus giving him new opportunities and the chance 
to make use of the specific rights it gives him. 

This aim cannot be achieved so long as numerous provisions that have been amended 
several times, often quite substantially, remain scattered, so that they must be sought 
partly  in  the  original  instrument  and  partly  in  later  amending  ones.  Considerable 
research work, comparing many different instruments, is thus needed to identify the 
current rules. 

For  this  reason  a  codification  of  rules  that  have  frequently  been  amended  is  also 
essential if Community law is to be clear and transparent. 

On  1  April  1987  the  Commission  therefore  decided1  to  instruct  its  staff  that  all 
legislative acts should be codified after no more than ten amendments, stressing that 
this  is  a  minimum  requirement  and  that  departments  should  endeavour  to  codify  at 
even  shorter  intervals  the  texts  for  which  they  are  responsible,  to  ensure  that  the 
Community rules are clear and readily understandable. 

The  Conclusions  of 
the  Edinburgh  European  Council 
(December 1992) confirmed this2, stressing the importance of codification as it offers 
certainty as to the law applicable to a given matter at a given time. 

the  Presidency  of 

Codification  must  be  undertaken  in  full  compliance  with  the  normal  Community 
legislative procedure. 

Given  that  no  changes  of  substance  may  be  made  to  the  instruments  affected  by 
codification, the European Parliament, the Council and the Commission have agreed, 
by  an  interinstitutional  agreement  dated  20  December  1994,  that  an  accelerated 
procedure may be used for the fast-track adoption of codification instruments. 

is 

this  proposal 

to  undertake  a  codification  of  Council 
The  purpose  of 
Regulation (EEC) No 4045/89 of 21 December 1989 on scrutiny by Member States 
of transactions forming part of the system of financing by the Guarantee Section of 
the  European  Agricultural  Guidance  and  Guarantee  Fund  and 
repealing 
Directive 77/435/EEC3.  The  new  Regulation  will  supersede  the  various  acts 
incorporated in it4; this proposal fully preserves the content of the acts being codified 
and hence does no more than bring them together with only such formal amendments 
as are required by the codification exercise itself. 

COM(87) 868 PV. 
See Annex 3 to Part A of the Conclusions. 
Carried out pursuant to the Communication from the Commission to the European Parliament and the 
Council – Codification of the Acquis communautaire, COM(2001) 645 final. 
See Annex I to this proposal. 

1. 

2. 

3. 

4. 

1 
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3 

4 

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5. 

The codification proposal was drawn up on the basis of a preliminary consolidation, 
in  all  official  languages,  of  Regulation  (EEC) No 4045/89  and  the  instruments 
amending  it,  carried  out  by  the  Office  for  Official  Publications  of  the  European 
Communities, by means of a data-processing system. Where the Articles have been 
given new numbers, the correlation between the old and the new numbers is shown 
in a table contained in Annex II to the codified Regulation. 

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(cid:208) 4045/89 (adapted) 

2006/0265 (CNS) 

Proposal for a  

COUNCIL REGULATION 

on scrutiny by Member States of transactions forming part of the system of financing by 
the European Agricultural Guarantee Fund  

THE COUNCIL OF THE EUROPEAN UNION, 

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

Having regard to the proposal from the Commission, 

Having regard to the opinion of the European Parliament1, 

Whereas: 

(cid:208) 

(1) 

Council Regulation (EEC) No 4045/89 of 21 December 1989 on scrutiny by Member 
States of transactions forming part of the system of financing by the Guarantee Section 
of 
the  European  Agricultural  Guidance  and  Guarantee  Fund  and  repealing 
Directive 77/435/EEC2 has been substantially amended several times3. In the interests 
of clarity and rationality the said Regulation should be codified. 

1 
2 

3 

OJ C ⌦ […] ⌫. 
OJ L 388, 30.12.1989, p. 18. Regulation as last amended by Regulation (EC) No 2154/2002 (OJ L 328, 
5.12.2002, p. 4). 
See Annex I. 

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(cid:208) 4045/89 recital 1 (adapted) 

(2) 

Under  Article  ⌦ 9 ⌫  of  Council  Regulation  (EC)  No ⌦ 1290/2005  of  21  June 
2005 ⌫ on the financing of the common agricultural policy4, the Member States are 
to  take  the  measures  necessary  to  ⌦ ensure  effective  protection  of  the  financial 
interests  of  the  Community,  and  particularly  in  order  to  check  the  genuineness  and 
compliance  of  operations ⌫  financed  by  the  European  Agricultural  Guarantee  Fund 
(EAGF)  ⌦ and  by  the  European  Agricultural  Fund  for  Rural  Development 
(EAFRD) ⌫, to prevent and ⌦ pursue ⌫ irregularities and to recover sums lost as a 
result of irregularities or negligence. 

(cid:208) 4045/89 recital 2 (adapted) 

(3) 

Scrutiny  of  the  commercial  documents  of  undertakings  ⌦ receiving ⌫  or  making 
payments can be a very effective means of surveillance of transactions forming part of 
the  system  of  financing  by  the  EAGF.  This  scrutiny  supplements  other  inspections 
already carried out by the Member States. Furthermore, national provisions relating to 
scrutiny  which  are  more  extensive  than  those  provided  for  in ⌦ this ⌫  Regulation 
are not affected by ⌦ it ⌫. 

(4) 

The documents used as a basis for such scrutiny should be determined in such a way 
as to enable a full scrutiny to be carried out. 

(cid:208) 4045/89 recital 5 

(5) 

The undertakings to be scrutinised ⌦ should ⌫ be selected on the basis of the nature 
of  the  transactions  carried  out  on  their  responsibility  and  the  breakdown  of  the 
undertakings receiving or making payments according to their financial importance in 
the system of financing by the EAGF. 

(cid:208) 4045/89 recital 6 (adapted) 

(cid:208) 4045/89 recital 7 (adapted) 

(6) 

Furthermore,  it  is  necessary  to  provide  for  a  minimum  number  of  inspections  of 
commercial documents. This number ⌦ should ⌫ be determined by a method which 
precludes substantial differences between the Member States by virtue of differences 
in the structure of their expenditure under the EAGF. This method may be established 
by referring to the number of undertakings of a certain ⌦ financial ⌫ importance in 
the system of financing by the EAGF. 

4 

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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(7) 

The  powers  of  the  officials  responsible  for  scrutiny  and  the  obligations  on 
undertakings to make commercial documents available to such officials for a specified 
period and to supply such information as may be requested by them should be defined. 
It should also be stipulated that commercial documents may be seized in certain cases. 

(cid:208) 4045/89 recital 8 

(cid:208) 4045/89 recital 9 (adapted) 

(8) 

It  is  necessary  to  organise  cooperation  among  the  Member  States  on  account  of  the 
international structure of agricultural trade and with a view to the ⌦ functioning ⌫ 
of  the  internal  market.  It  is  also  necessary  for  a  centralised  documentation  system 
concerning undertakings receiving or making payments established in third countries 
to be set up at Community level. 

(cid:208) 4045/89 recital 10 

(9)  While it is the responsibility of the Member States in the first instance to adopt their 
scrutiny programmes,  it is necessary that these programmes be communicated to the 
Commission so that it can assume its supervisory and coordinating role and to ensure 
that the programmes are adopted on the basis of appropriate criteria. Scrutiny can thus 
be concentrated on sectors or undertakings where the risk of fraud is high. 

(10)  The  departments  carrying  out  scrutiny  pursuant  to  this  Regulation  ⌦ should ⌫  be 

organised independently of the departments carrying out scrutiny prior to payment. 

(cid:208) 4045/89 recital 11 (adapted) 

(11) 

It  is  essential  that  each  Member  State  have  a  special  department  responsible  for 
monitoring the application of this Regulation and for coordinating the scrutiny carried 
out in accordance with this Regulation. The officials belonging to that department may 
make inspections of undertakings in accordance with this Regulation. 

(cid:208) 4045/89 recital 12 

(12) 

Information collected during the scrutiny of commercial documents must be protected 
by professional secrecy. 

(cid:208) 4045/89 recital 15 

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(13)  Arrangements should be made for an exchange of information at Community level so 
that the results of the application of this Regulation can be used to greater effect, 

(cid:208) 4045/89 recital 16 

HAS ADOPTED THIS REGULATION: 

(cid:208) 4045/89 

Article 1 

(cid:208) 2154/2002 Art. 1 pt. 1(a) 
(adapted) 

1. This Regulation relates to scrutiny of the commercial documents of those entities receiving 
or  making  payments  relating  directly  or  indirectly  to  the  system  of  financing  by  the 
⌦ European  Agricultural  Guarantee  Fund ⌫  (EAGF),  or  their  representatives,  hereinafter 
‘undertakings’,  in  order  to  ascertain  whether  transactions  forming  part  of  the  system  of 
financing by the EAGF have actually been carried out and have been executed correctly. 

(cid:208) 3094/94 Art. 1 pt. 2 (adapted) 

2. This Regulation shall not apply to measures covered by the integrated administration and 
control  system  established  by  ⌦ Council ⌫  Regulation  (EC)  No ⌦ 1782/2003 ⌫5.  The 
Commission shall, in accordance with ⌦ the procedure referred to in ⌫ Article ⌦ 41(2) of 
Regulation (EC) No 1290/2005 ⌫, establish a list of other measures to which this Regulation 
does not apply. 

(cid:208) 2154/2002 Art. 1 pt. 1(b) 
(adapted) 

3.  Scrutinies  of  rural  development  measures  and  projects  not  explicitly  excluded  from  the 
scope  of  such  scrutinies,  pursuant  to  the  Annex  to  ⌦ Commission ⌫  Regulation  (EC) 
No 2311/20006,  shall  pay  particular  attention  to  the  special  conditions  governing  the 
implementation of such measures and projects. 

4. For the purposes of this Regulation ⌦ the following definitions shall apply: ⌫ 

(cid:208) 3094/94 Art. 1 pt. 1 (adapted) 

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6 

OJ L ⌦ 270, 21.10.2003, p. 1 ⌫. 
OJ L 265, 19.10.2000, p. 10. 

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⌦ (a) ⌫ 

‘commercial  documents’  mean⌦ s ⌫  all  books,  registers,  vouchers  and 
supporting documents, accounts, production and quality records, and correspondence 
relating  to  the  undertaking's  business  activity,  as  well  as  commercial  data,  in 
whatever form they may take, including electronically stored data, in so far as these 
documents  or  data  relate  directly  or  indirectly  to  the  transactions  referred  to  in 
paragraph 1; 

⌦ (b) ⌫ 

’third  party’  mean⌦ s ⌫  any  natural  or  legal  person  directly  or  indirectly 

connected with transactions carried out within the financing system by the EAGF . 

(cid:208) 3094/94 Art. 1 pt. 2 (adapted) 

(cid:208) 4045/89 (adapted) 
(cid:206)1 2154/2002 Art. 1 pt. 2(a) 
(cid:206)2 3094/94 Art. 1 pt. 3 

Article 2 

1.  Member  States  shall  carry  out  systematic  scrutiny  of  the  commercial  documents  of 
undertakings taking account of the nature of the transactions to be scrutinised. Member States 
shall ensure that the selection of undertakings for scrutiny gives the best possible assurance of 
the effectiveness of the measures for preventing and detecting irregularities under the system 
of  financing  by  the  EAGF.  Inter  alia  the  selection  shall  take  account  of  the  financial 
importance of the undertakings in that system and other risk factors. 

2. The scrutiny referred to in paragraph 1 shall apply, for each period of scrutiny referred to in 
paragraph 7, to a number of undertakings which may not be less than half the  undertakings 
whose receipts or payments, or the sum thereof, under the system of financing by the EAGF, 
amounted  to  more  than  (cid:206)1 EUR 150 000   for  the  (cid:206)2 EAGF  financial  year   preceding 
the beginning of the period of scrutiny in question. 

(cid:208) 3094/94 Art. 1 pt. 5 

3. In relation to each current scrutiny period, Member States shall, without prejudice to their 
obligations  defined  in  paragraph  1,  select  the  undertakings  to  be  scrutinised  on  the  basis  of 
risk analysis in the export refunds sector, and for all other measures where it is practicable to 
do so. The Member States shall submit to the Commission their proposals for the use of risk 
analysis. The proposals shall include all relevant information concerning the approach to be 
followed,  the  techniques,  the  criteria  and  the  method  of  implementation.  They  shall  be 
presented not later than 1 December of the year prior to commencement of the scrutiny period 
for which they are to be applied. The Member States shall take account of the comments of 
the Commission on the proposals, which shall be given within eight weeks of their receipt. 

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(cid:208) 3094/94 Art. 1 pt. 5 
(cid:206)1 2154/2002 Art. 1 pt. 2(b) 

4.  For  measures  for  which  a  Member  State  considers  the  use  of  risk  analysis  not  to  be 
practicable, it shall be compulsory for undertakings the sum of whose receipts or payments or 
the  sum  of  those  two  amounts  within  the  system  of  financing  by  the  EAGF  was  more  than 
(cid:206)1 EUR 350 000   and  which  were  not  scrutinised  in  accordance  with  this  Regulation 
during either of the two preceding scrutiny periods, to be scrutinised. 

(cid:208) 4045/89 
(cid:206)1 2154/2002 Art. 1 pt. 2(c) 

5.  Undertakings  the  sum  of  whose  receipts  or  payments  amounted  to  less  than 
(cid:206)1 EUR 40 000  shall be scrutinised in accordance with this Regulation only for specific 
reasons  to  be  indicated  by  the  Member  States  in  their  annual  programme  as  referred  to  in 
Article 10 or by the Commission in any proposed amendment to that programme. 

6. In appropriate cases, the scrutiny provided for in paragraph 1 shall be extended to natural 
and legal persons with which undertakings within the meaning of Article 1 are associated and 
to such other natural or legal persons as may be relevant for the pursuit of the objectives set 
out in Article 3. 

7. The scrutiny period shall run from 1 July to 30 June of the following year. 

Scrutiny shall cover a period of at least 12 months ending during the previous scrutiny period; 
it may be extended for periods, to be determined by the Member State, preceding or following 
the 12-month period. 

(cid:208) 3094/94 Art. 1 pt. 7 

(cid:208) 4045/89 (adapted) 
(cid:206)1 3094/94 Art. 1 pt. 8 

8.  The  scrutiny  carried  out  pursuant  to  this  Regulation  shall  not  prejudice  the  inspections 
undertaken  pursuant to (cid:206)1 Article 6 of ⌦ Council ⌫ Regulation (EEC) No 595/917  or 
those  undertaken  pursuant 
(EC) 
No ⌦ 1290/2005 ⌫. 

to  ⌦ Articles  36  and  37 ⌫  of  Regulation 

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OJ L 67, 14.3.1991, p. 11. 

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(cid:208) 4045/89 

Article 3 

(cid:208) 3094/94 Art. 1 pt. 9 (adapted) 

1. The accuracy of primary data under scrutiny shall be verified by ⌦ a ⌫ number of cross-
checks, including, where necessary, the commercial documents of third parties, appropriate to 
the degree of risk presented, including, inter alia: 

(a) 

comparisons  with  the  commercial  documents  of  suppliers,  customers,  carriers  and 
other third parties; 

(b) 

physical checks, where appropriate, upon the quantity and nature of stocks; 

(c) 

comparison  with  the  records  of  financial  flows  leading  to  or  consequent  upon  the 
transactions carried out within the financing system by the EAGF , and 

(cid:208) 4045/89 (adapted) 

(d) 

checks,  in  relation  to  bookkeeping,  or  records  of  financial  movements  showing,  at 
the time of the scrutiny, that the documents held by the paying agency as justification 
for the payment of aid to the beneficiary are accurate. 

(cid:208) 2154/2002 Art. 1 pt. 3 

2. In particular, where undertakings are required to keep particular book records of stock in 
accordance  with  Community  or  national  provisions,  scrutiny  of  these  records  shall  in 
appropriate  cases  include  a  comparison  with  the  commercial  documents  and,  where 
appropriate, with the actual quantities in stock. 

(cid:208) 4045/89 

3. In the selection of transactions to be checked, full account shall be taken of the degree of 
risk presented. 

(cid:208) 3094/94 Art. 1 pt. 10 

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(cid:208) 4045/89 (adapted) 

Article 4 

Undertakings shall keep the commercial documents for at least three years, starting from the 
end of the year in which they were drawn up. 

The Member States may prescribe a longer period for the retention of these documents. 

Article 5 

1.  The  persons  responsible  for  the  undertaking,  or  a  third  party,  shall  ensure  that  all 
commercial documents and additional information are supplied to the officials responsible for 
the scrutiny or to the persons empowered for that purpose. Electronically stored data shall be 
provided on an appropriate data support medium. 

(cid:208) 3094/94 Art. 1 pt. 11 

2. The officials responsible for the scrutiny or the persons empowered for that purpose may 
require  that  extracts  or  copies  of  the  documents  referred  to  in  paragraph  1  be  supplied  to 
them. 

(cid:208) 4045/89 

(cid:208) 3094/94 Art. 1 pt. 12 (adapted) 

3. Where, during scrutiny carried out pursuant to this Regulation, the commercial documents 
maintained  by  the  undertaking  are  considered  inadequate  for  scrutiny  purposes,  the 
undertaking shall be directed to maintain ⌦ in ⌫ future such records as ⌦ are ⌫ required 
by the Member State responsible for the scrutiny, without prejudice to obligations laid down 
in other Regulations relating to the sector concerned. 

Member States shall determine the date as of which such records are to be established. 

Where  all  or  part  of  the  commercial  documents  required  to  be  scrutinised  pursuant  to  this 
Regulation  are  located  with  an  undertaking  in  the  same  commercial  group,  partnership  or 
association  of  undertakings  managed  on  a  unified  basis  as  the  undertaking  scrutinised, 
whether located inside or outside Community territory, the undertaking shall make available 
these commercial documents to officials responsible for the scrutiny, at a place and time to be 
determined by the Member States responsible for carrying out the scrutiny. 

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(cid:208) 4045/89 (adapted) 

Article 6 

1.  Member  States  shall  ensure  that  officials  responsible  for  scrutiny  ⌦ are ⌫  entitled  to 
seize  commercial  documents,  or  have  them  seized.  This  right  shall  be  exercised  with  due 
regard for relevant national provisions and shall not affect the application of rules governing 
proceedings in criminal matters concerning the seizure of documents. 

2. Member States shall adopt appropriate measures to penalise natural or legal persons who 
fail to fulfil their obligations under this Regulation. 

(cid:208) 3094/94 Art. 1 pt. 13 (adapted) 

Article 7 

1. Member States shall assist each other for the purposes of carrying out the scrutiny provided 
for in Articles 2 and 3 ⌦ in the following cases ⌫: 

(a) 

where an undertaking or third party is established in a Member State other than that 
in  which  payment  of  the  amount  in  question  has  or  should  have  been  made  or 
received; 

(b)  ⌦ where  an  undertaking  or  third  party  is  established  in  a  Member  State ⌫  other 
than  that  in  which  the  documents  and  information  required  for  scrutiny  are  to  be 
found. 

The  Commission  may  coordinate  joint  actions  involving  mutual  assistance  between  two  or 
more Member States. Provisions for such coordination shall be established in accordance with 
⌦ the procedure referred to in ⌫ Article ⌦ 41(2) of Regulation (EC) No 1290/2005 ⌫. 

(cid:208) 2154/2002 Art. 1 pt. 4(a) 
(adapted) 

two  or  more  Member  States 

Where 
in  under 
Article 10⌦ (2) ⌫  a  proposal  for  joint  action  involving  extensive  mutual  assistance,  the 
Commission may, on request, allow a reduction of up to a maximum of 25 % of the minimum 
number of scrutinies as determined under Article 2(2) to (5) for the Member States concerned. 

the  programme  sent 

include 

in 

2.  During  the  first  three  months  following  the  EAGF  financial  year  of  payment,  Member 
States  shall  send  a  list  of  the  undertakings  referred  to  in ⌦ point  (a) ⌫  of  paragraph  1  to 
each Member State in which such an undertaking is established. The list shall contain all the 
details necessary to enable the Member State of destination to identify the undertakings and to 

(cid:208) 3094/94 Art. 1 pt. 13 (adapted) 

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undertake  its  scrutiny  obligations.  The  Member  State  of  destination  shall  be  responsible  for 
the scrutiny of such undertakings in accordance with Article 2. A copy of each list shall be 
sent to the Commission. 

The Member State receiving or making the payment may ask the Member State in which the 
undertaking is established to scrutinise some of the undertakings on that list ⌦ in accordance 
with ⌫ Article 2, indicating why it is necessary to make such a request and in particular the 
risks associated with it. 

The Member State receiving the request shall take due account of the risks associated with the 
undertaking, which shall be communicated by the requesting Member State. 

The  requested  Member  State  shall  inform  the  requesting  Member  State  of  the  follow-up 
accorded  to  the  request.  Where  scrutiny  of  an  undertaking  on  the  list  takes  place,  the 
requested  Member  State  that  carried  out  the  scrutiny  shall  inform  the  requesting  Member 
State  of  the  results  of  that  scrutiny  at  the  latest  three  months  after  the  end  of  the  scrutiny 
period. 

An overview of such requests shall be sent to the Commission on a quarterly basis, within one 
month after the end of each quarter. The Commission may demand that a copy of individual 
requests be provided. 

(cid:208) 2154/2002 Art. 1 pt. 4(b) 

3.  During  the  first  three  months  following  the  EAGF  financial  year  of  payment,  Member 
States  shall  send  the  Commission  a  list  of  undertakings  established  in  a  third  country  for 
which payment of the amount in question has or should have been made or received in that 
Member State. 

(cid:208) 3094/94 Art. 1 pt. 13 (adapted) 

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(cid:208) 2154/2002 Art. 1 pt. 4(c) 

4. If additional information is required in another Member State as part of the scrutiny of an 
undertaking in accordance  with Article  2,  and  in particular cross-checks in accordance with 
Article 3, specific scrutiny requests may be made indicating the reasons for the request. An 
overview of such specific requests shall be sent to the Commission on a quarterly basis within 
one  month  after  the  end  of  each  quarter.  The  Commission  may  demand  that  a  copy  of 
individual requests be provided. 

The scrutiny request shall be met not later than six months after its receipt; the results of the 
scrutiny  shall  be  communicated  without  delay  to  the  requesting  Member  State  and  to  the 
Commission. The communication to the Commission shall be on a quarterly basis within one 
month after the end of each quarter. 

5. In accordance with ⌦ the procedure referred to in ⌫ Article ⌦ 41(2) of Regulation (EC) 
No  1290/2005, ⌫  the  Commission  shall  determine  minimum  requirements  regarding  the 
contents of the requests referred to in paragraphs 2 and 4 ⌦ of this Article ⌫. 

(cid:208) 3094/94 Art. 1 pt. 13 (adapted) 

(cid:208) 4045/89 

Article 8 

1. Information collected in the course of scrutiny as provided for in this Regulation shall be 
protected  by  professional  secrecy.  It  may  not  be  communicated  to  any  persons  other  than 
those  who,  by  reason  of  their  duties  in  the  Member  States  or  in  the  institutions  of  the 
Communities,  are  required  to  have  knowledge  thereof  for  the  purposes  of  performing  those 
duties. 

2. This Article shall not prejudice national provisions relating to legal proceedings. 

Article 9 

1. Before 1 January following the scrutiny period Member States shall send the Commission a 
detailed report on the application of this Regulation. 

The report must set out any difficulties encountered and the measures taken to overcome them 
and put forward, where appropriate, suggestions for improvements. 

2.  The  Member  States  and  the  Commission  shall  have  regular  exchanges  of  views  on  the 
application of this Regulation. 

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3. The Commission ⌦ shall ⌫ evaluate annually the progress achieved, in its annual report 
on  the  administration  of  the  funds  referred  to  in  Article  ⌦ 43 ⌫  of  Regulation (EC) 
No ⌦ 1290/2005 ⌫. 

(cid:208) 4045/89 (adapted)  
(cid:206)1 3094/94 Art. 1 pt. 14 

(cid:208) 4045/89 
(cid:206)1 3094/94 Art. 1 pt. 15 

Article 10 

1.  Member  States  shall  draw  up  programmes  for  scrutinies  to  be  carried  out  pursuant  to 
Article 2 during the subsequent scrutiny period. 

2. Each year, before 15 April, the Member States shall send the Commission their programme 
as referred to in paragraph 1 and shall specify: 

(a) 

the  number  of  undertakings  to  be  scrutinised  and  their  breakdown  by  sector  on  the 
basis of the amounts relating to them; 

(b) 

the criteria adopted for drawing up the programme. 

3. The programmes established by the Member States and forwarded to the Commission shall 
be implemented by the Member States, if, within (cid:206)1 eight  weeks, the Commission has not 
made known its comments. 

4. Amendments made by the Member States to the programmes shall be subject to the same 
procedure. 

5.  Exceptionally,  at  any  stage,  the  Commission  may  request  the  inclusion  of  a  particular 
category of undertaking in the programme of one or more Member States. 

(cid:208) 4045/89 (adapted) 

Article 11 

1.  In  each  Member  State  a  special  department  ⌦ shall ⌫  be  made  responsible  for 
monitoring the application of this Regulation and for: 

(a) 

(b) 

the performance of the scrutiny provided for herein by officials employed directly by 
that special department, or 

the  coordination  and  general  surveillance  of  the  scrutiny  carried  out  by  officials 
belonging to other departments. 

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Member States may also provide that scrutinies to be carried out pursuant to this Regulation 
are allocated between the special department and other national departments, provided that the 
former is responsible for their coordination. 

(cid:208) 4045/89 

2. The department or departments responsible for the application of this Regulation must be 
organised in such a way as to be independent of the departments or branches of departments 
responsible for the payments and the scrutiny carried out prior to payment. 

3. In order to ensure that this Regulation is properly applied, the special department referred 
to in paragraph 1 shall take all the measures necessary. 

4. The special department shall be responsible in addition for: 

(a) 

(b) 

(c) 

training the national officials responsible for carrying out the scrutiny referred to in 
this  Regulation,  in  order  to  enable  them  to  acquire  sufficient  knowledge  for 
performing their duties; 

administering the scrutiny reports and any other documents relating to the scrutinies 
carried out and provided for under this Regulation; 

the preparation and communication of the reports referred to in Article 9(1) and the 
programmes referred to in Article 10. 

5.  The  special  department  shall  be  entrusted  by  the  Member  State  concerned  with  all  the 
powers necessary to perform the tasks referred to in paragraphs 3 and 4. 

It shall consist of a sufficient number of officials who are suitably trained to carry out those 
tasks. 

6.  This  Article  shall  not  apply  when  the  minimum  number  of  undertakings  to  control,  in 
accordance with Article 2(2) to (5), is less than 10. 

(cid:208) 4045/89 (adapted) 

Article 12 

The  amounts  in  ⌦ euro ⌫  appearing  in  this  Regulation  shall  be  converted  ⌦ ,  where 
appropriate, ⌫  into  national  currencies  by  applying  the  rate  of  exchange  operating  on  the 
first working date of the year when the scrutiny period begins and published in the C series of 
the Official Journal of the European Union. 

Article 13 

Detailed  rules  for  the  application  of  this  Regulation  shall  be  adopted  where  necessary,  in 
accordance with the procedure ⌦ referred to ⌫ in Article ⌦ 41(2) ⌫ of Regulation (EC) 
No ⌦ 1290/2005 ⌫. 

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⌦ Articles  36  and  37 ⌫  of  Regulation  (EC)  No ⌦ 1290/2005 ⌫  shall  apply  to  the 
scrutiny of specific expenditure financed by the Community under this Regulation. 

Article 14 

(cid:208) 4045/89 (adapted) 
(cid:206)1 3094/94 Art. 1 pt. 18 (a) 

Article 15 

(cid:206)1 1.   In  accordance  with  the  relevant  national  laws,  Commission  officials  shall  have 
access  to  all  documents  prepared  either  with  a  view  to  or  following  the  scrutiny  organised 
under  this  Regulation  and  to  the  data  held,  including  those  stored  in  the  data  processing 
systems. (cid:206)1 ⌦ Those data ⌫ shall be provided upon request on an appropriate data support 
medium.  

(cid:208) 3094/94 Art. 1 pt. 18(b) 

2. The scrutinies referred to in Article 2 shall be carried out by the officials of the Member 
States. 

Officials  of  the  Commission  may  participate  in  these  scrutinies.  They  may  not  themselves 
exercise the powers of scrutiny accorded to national officials; however, they shall have access 
to the same premises and to the same documents as the officials of the Member States. 

3.  In  the  case  of  scrutinies  taking  place  under  Article  7,  officials  of  the  requesting  Member 
State may be present, with the agreement of the requested Member State, at the scrutiny in the 
requested Member State and have access to the same premises and the same documents as the 
officials of that Member State. 

Officials of the requesting Member State present at scrutinies in the requested Member State 
must at all times be able to furnish proof of their official capacity. The scrutinies shall at all 
times be carried out by officials of the requested Member State. 

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(cid:208) 3094/94 Art. 1 pt. 18 (b) 
(adapted) 

4. Where national provisions concerning criminal procedure reserve certain acts for officials 
specifically  designated  by  the  national  law, ⌦ neither ⌫  the  officials  of  the  Commission, 
⌦ nor ⌫ the officials of the Member State referred to in paragraph 3, shall take part in these 
acts. In any event, they shall not take part in, in particular, visits to the home or the formal 
interrogation of persons in the context of the criminal law of the Member State. They shall, 
however, have access to information thus obtained. 

(cid:208) . 

Article 16 

Regulation (EEC) No 4045/89 is repealed. 

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

(cid:208) 4045/89 (adapted) 

Article 17 

This Regulation shall enter into force on the ⌦ twentieth ⌫ day following ⌦ that of ⌫ its 
publication in the Official Journal of the European Union. 

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

Done at Brussels, […] 

For the Council 
The President 
[…] 

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(cid:207) 

ANNEX I 

Repealed Regulation with its successive amendments 

Council Regulation (EEC) No 4045/89 
(OJ L 388, 30.12.1989, p. 18) 

Council Regulation (EC) No 3094/94 
(OJ L 328, 20.12.1994, p. 1) 

Council Regulation (EC) No 3235/94 
(OJ L 338, 28.12.1994, p. 16) 

Council Regulation (EC) No 2154/2002 
(OJ L 328, 5.12.2002, p. 4) 

_____________ 

Article 1(1) only 

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ANNEX II 

CORRELATION TABLE 

Regulation (EEC) No 4045/89 

This Regulation 

Article 1(1) 

Article 1(2) 

Article 1(3) 

Article 1(4) 

Article 1(5) 

Article 2(1) 

Article 2(2), first subparagraph 

Article 1(1) 

Article  1(4),  introductory  wording,  and 
Article 1(4)(a) 

Article 1(4)(b) 

Article 1(2) 

Article 1(3) 

Article 2(1) 

Article 2(2) 

Article 2(2), second subparagraph 

Article 2(3) 

Article 2(2) third subparagraph 

___________ 

Article 2(2), fourth subparagraph 

Article 2(4) 

Article 2(2), fifth subparagraph 

Article 2(5)  

Article 2(3)  

Article 2(4)  

Article 2(5)  

Article 2(6)  

Article 2(7) 

Article 2(8)  

Article 3(1), introductory wording 

Article 3(1), introductory wording 

Article 3(1), first indent 

Article 3(1), second indent 

Article 3(1), third indent 

Article 3(1), fourth indent 

Article 3(2) 

Article 3(3) 

Article 4 

Article 5 

Article 3(1)(a) 

Article 3(1)(b) 

Article 3(1)(c)  

Article 3(1)(d)  

Article 3(2) 

Article 3(3) 

Article 4 

Article 5 

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Article 6 

Article 6 

Article 
introductory wording 

7(1), 

first 

subparagraph, 

Article 
introductory wording 

7(1), 

first 

subparagraph, 

Article 7(1), first subparagraph, first indent  Article 7(1), first subparagraph, (a) 

Article  7(1),  first  subparagraph,  second 
indent 

Article 7(1), first subparagraph, (b) 

Article 7(1), second subparagraph 

Article 7(1), second subparagraph  

Article 7(1), third subparagraph 

Article 7(1), third subparagraph 

Article 7(2), (3), (4) and (5) 

Article 7(2), (3), (4) and (5) 

Article 8 

Article 9(1)  

Article 9(2) 

Article 9(3) 

Article 9(4) 

Article 9(5) 

Article 10(1) 

Article 8 

Article 9(1), first subparagraph 

Article 9(1), second subparagraph 

Article 9(2) 

Article 9(3) 

__________ 

Article 10(1) 

Article 10(2), introductory wording 

Article 10(2), introductory wording 

Article 10(2), first indent 

Article 10(2)(a) 

Article 10(2), second indent 

Article 10(2)(b) 

Article 10(3), (4) and (5) 

Article 10(3), (4) and (5) 

Article 
introductory wording 

11(1), 

first 

subparagraph, 

Article 
introductory wording 

11(1), 

first 

subparagraph, 

Article 11(1), first subparagraph, first indent Article 11(1), first subparagraph, (a) 

Article  11(1),  first  subparagraph,  second 
indent 

Article 11(1), first subparagraph, (b) 

Article 11(1), second subparagraph 

Article 11(1), second subparagraph 

Article 11(2) and (3) 

Article 11(2) and (3) 

Article 11(4), introductory wording 

Article 11(4), introductory wording 

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Article 11(4), first indent 

Article 11(4)(a) 

Article 11(4), second indent 

Article 11(4)(b) 

Article 11(4), third indent 

Article 11(4)(c) 

Article 11(5) and (6) 

Article 11(5) and (6) 

Article 18 

Article 19 

Article 20 

Article 21 

Article 22 

__________ 

Article 23 

__________ 

__________ 

Article 12 

Article 13 

Article 14 

Article 15 

__________ 

Article 16 

Article 17 

Annex I 

Annex II 

_____________ 

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