COMMISSION STAFF WORKING DOCUMENT accompanying the  REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL 3rd FINANCIAL REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL  on the  EUROPEAN AGRICULTURAL FUND FOR RURAL DEVELOPMENT (EAFRD)   2009 FINANCIAL YEAR
Date: 2010-09-23
Institutions: European Commission
Subjects: agricultural expenditure, aid to agriculture, common agricultural policy, implementation of the budget, report, rural development

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EUROPEAN COMMISSION 

Brussels, 23.9.2010 
SEC(2010) 1091 final 

COMMISSION STAFF WORKING DOCUMENT 
accompanying the 

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND 
THE COUNCIL 

3rd FINANCIAL REPORT FROM THE COMMISSION 
TO THE EUROPEAN PARLIAMENT AND THE COUNCIL 
 on the 
 EUROPEAN AGRICULTURAL FUND FOR RURAL DEVELOPMENT (EAFRD)  

2009 FINANCIAL YEAR 

COM(2010) 497 final 

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TABLE OF CONTENTS 

1. 

1.1. 

1.2. 

1.3. 

1.4. 

1.5. 

1.6. 

2. 

Budget procedure ......................................................................................................... 4 

Financial framework .................................................................................................... 4 

Preliminary Draft Budget (PDB) 2009 ........................................................................ 5 

Draft Budget (DB) 2009............................................................................................... 5 

Amending Letter (AL) 2009 ........................................................................................ 5 

Council second reading ................................................................................................ 5 

The adoption of the 2009 Budget................................................................................. 5 

Management of appropriations .................................................................................... 6 

2.1. 

Management of Commitment appropriations .............................................................. 6 

2.1.1.  EAFRD operational programmes................................................................................. 6 

2.1.2.  Technical assistance ..................................................................................................... 6 

2.2. 

Management of payment appropriations...................................................................... 6 

2.2.1.  EAFRD operational programmes................................................................................. 6 

2.2.2.  Technical assistance ..................................................................................................... 7 

3. 

3.1. 

3.2. 

3.3. 

The implementation of the 2009 EAFRD budget ........................................................ 7 

Introduction .................................................................................................................. 7 

Modification of EAFRD programmes ......................................................................... 7 

Implementation of commitment appropriations........................................................... 8 

3.3.1.  EAFRD operational programmes................................................................................. 8 

3.3.2.  Technical assistance ..................................................................................................... 9 

3.4. 

Implementation of payment appropriations ................................................................. 9 

3.4.1.  EAFRD operational programmes................................................................................. 9 

3.4.2.  Technical assistance ................................................................................................... 13 

3.5. 

3.6. 

4. 

4.1. 

4.2. 

5. 

Analysis of expenditure declared by axis and by measure ........................................ 13 

Implementation rate of EAFRD programmes ............................................................ 15 

Control measures........................................................................................................ 17 

Introduction ................................................................................................................ 17 

Integrated Administration and Control System (IACS)............................................. 18 

Clearance of accounts ................................................................................................ 19 

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5.1. 

5.2. 

Conformity clearance - Introduction.......................................................................... 19 

Conformity clearance – audits and decisions adopted in 2009 .................................. 20 

Audits.......................................................................................................................... 20 

Conformity decisions.................................................................................................. 20 

5.3. 

Financial clearance..................................................................................................... 20 

5.3.1. 

Introduction ................................................................................................................ 20 

5.3.2.  Decisions .................................................................................................................... 21 

5.3.2.1.  Financial clearance for financial years 2006 and 2007.............................................. 21 

5.3.2.2.  Financial clearance decision for the financial year 2008 ........................................... 21 

5.4. 

Appeals brought before the Court of Justice against clearance decisions ................. 21 

Judgments handed down ............................................................................................ 21 

Appeals pending ......................................................................................................... 21 

6. 

7. 

Relations with Parliament and the European Court of Auditors................................ 22 

Basic rules governing the EAFRD and amendments made in 2009 .......................... 22 

7.1. 

General ....................................................................................................................... 22 

Basic legislation ......................................................................................................... 22 

Recent modifications .................................................................................................. 22 

Declarations................................................................................................................ 23 

Checks ........................................................................................................................ 23 

Clearance of accounts ................................................................................................ 24 

7.2. 

7.3. 

7.4. 

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1. 

BUDGET PROCEDURE 

1.1. 

Financial framework  

CAP expenditure is funded within the current financial framework as agreed in 
Inter-institutional Agreement between the European Parliament and the Council 
in May 2006, amended to take into account the Galileo-programme in 2007, the 
reprogramming  of  rural  development  in  2008  and  the  European  Economic 
Recovery  Package  (EERP)  in  2009.  CAP  expenditure  is  part  of  Heading  2: 
Preservation  and  management  of  natural  resources.  A  specific  sub-ceiling  has 
been decided for market related expenditure and direct aids within this heading. 

To  take  account  of  the  transfer  of  amounts  to  rural  development  due  to 
compulsory  modulation  (including  the  increase  from  the  CAP  Health  Check) 
increase, to the reform of the cotton, tobacco and wine sectors as well as to the 
voluntary  modulation  decided  for  the  UK,  the  expenditure  ceiling  for  market 
measures and direct aids had to be reduced accordingly. 

The CAP amounts included in heading 2 of the financial framework (2007-2013) 
are: 

HEADING 2.  Preservation and 
Management of Natural 
resources 

 TOTAL a), b) 

   of which : 

- Rural development a), c), d) 

- Market related expenditure 
and direct aids, c)  

2007 

2008 

2009 

2010 

2011 

2012 

2013 

(In EUR million current prices) 

55 143 

59 193 

57 639 

60 113 

60 338 

60 810 

61 289 

10 902 

13 303 

14 002 

14 364 

14 436 

14 617 

14 817 

44 753 

44 592 

44 887 

44 276 

44 467 

44 710 

44 939 

a) After reprogramming of rural development (1 469 Mio €). 

b) After transfer of EUR 1 600 million to Galileo in 2007 and of EUR 2 000 million to the European Economic 
Recovery Package in 2009. 

c) After transfer into Rural Development of the lower expected expenditure resulting from the reforms of the 
tobacco, cotton and wine CMOs and from the compulsory and voluntary modulation (UK), art 136 of regulation 
73/2009 and reduction due to financing of the EERP (D 273/2010 EU).  

d) Including the reinforcement of Rural Development by EUR 1 020 million included in the European Economic 
Recovery Package, of which EUR 600 million is financed in 2009 within heading 2 while, for 2010, 
EUR 420 million has been allocated to Rural Development on the basis of Commission Decision N° 636/2006. 

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1.2. 

Preliminary Draft Budget (PDB) 2009 

The 2009 Preliminary Draft Budget (PDB) was adopted by the Commission and 
proposed  to  the  Budgetary  Authority  on  6  May  2008.  The  proposal  for  the 
European  Agricultural  Fund 
(EAFRD)  under  
heading 2 of the Financial Framework 2007-2013 totalled EUR 13 395 millions 
in commitment appropriations and 9 842 in payment appropriations. 

for  Rural  Development 

Budget Item 

Commitment 
appropriations 
(in €)  

Payment 
appropriations 
(in €)  

05.040501 (Rural dev. programmes)  

13 373 504 584 

9 832 000 000

05.040502 (Technical assistance) 

21 913 625 

9 900 000

1.3. 

Draft Budget (DB) 2009 

The  Council  adopted  the  2009  Draft  Budget  in  July  2008.  The  payments 
appropriations for EAFRD programmes were reduced by EUR 115.0 million as 
compared to the PDB. 

1.4. 

Amending Letter (AL) 2009 

In  October 2008  the  Commission  adopted  Amending  Letter  No  2  to  the  2009 
PDB.  Even  though  the  Amending  Letter  exercise  mainly  concerns  the  EAGF, 
the    appropriations    for  EAFRD  programmes  were  increased  to  reflect  an 
additional transfer from the first pillar of EUR 0.16 million relating to the wine 
reform. The increase concerned both commitment and payment appropriations. 

1.5. 

Council second reading 

The  Council  second  reading,  adopted  on  12.11.2008,  did  not  involve  any 
modification of the EAFRD appropriations proposed in the Amending Letter. 

1.6. 

The adoption of the 2009 Budget 

The  European  Parliament  adopted  the  2009  budget  in  its  plenary  session  of 
December  2008,  by  increasing  the  amounts  for  EAFRD  programmes  proposed 
in  the  second  reading  of  the  Council  by  EUR 249.8 million  for  commitment 
appropriation  and  decreasing  the  amounts  by  EUR  696.8  million  for  payment 
appropriation. 

Budget Item 

Commitment 
appropriations 
(in €)  

Payment 
appropriations 
(in €)  

05.040501 (Rural dev. programmes)  

13 623 504 584 

9 135 331 205

05.040502 (Technical assistance) 

21 913 625 

9 900 000

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2. 

MANAGEMENT OF APPROPRIATIONS 

2.1.  Management of Commitment appropriations 

2.1.1.  EAFRD operational programmes 

In 2009 the commitment appropriations of the initial budget amounted to EUR 
13.62 billion. This amount was increased (Amending Budget No 4) by EUR 0.6 
billion  corresponding  to  the  first  part  of  the  Recovery  Package  whilst  it  was 
reduced  (Amending  Budget  No  10)  by  EUR  0.25  billion  in  appropriations 
entered through and amendment by the Budget Authority and that could not be 
implemented  due  to  insufficient  legal  basis.  Hence,  the  total  amount  finally 
available for the budget year 2009 was EUR 13.97 billion. 

The total amount committed for EAFRD programmes in 2009 was EUR 13.72 
billion. An amount of EUR 252 million was carried over to 2010. 

Management of commitment appropriations in  2009 
- EAFRD 

Appropriations at the beginning of 2009 

Amending Budget No 4 – Additional allocation under 
the European Economic Recovery Program 

Amending Budget No 10 – Cancellation of non-
executable appropriations  

Appropriations available in 2009 

Appropriations used in 2009 

Budget Item 

05.040501         

(amounts in €)  

13 623 504 584

600 000 000

-249 840 000

13 973 664 584

13 721 634 827

Unused amounts at the end of 2009 – Carry over to 2010 

252 029 757

2.1.2.  Technical assistance 

Article  69,  2nd  paragraph  of  the  Council  regulation  1698/2005  stipulates  that 
0.25%  of  the  resources  for  Community  support  to  rural  development  shall  be 
devoted  to  technical  assistance  for  the  Commission.  In  the  2009  budget,  the 
amount available for this purpose was EUR 21.9 million. At the end of 2009, the 
total amount committed was EUR 5.1 million.  

2.2.  Management of payment appropriations 

2.2.1.  EAFRD operational programmes 

In  2009  the  initial  payment  appropriations  amounted  to  EUR  9.91  billion,  of 
which EUR 9.1 billion corresponded to the voted budget and EUR 775 million 
to  appropriations  carried  forward  from  2008.    In  December  the  Amending 
Budget No 10 reduced the amount by EUR 1.65 billion to take account of the 
revised  payment  forecast  submitted  by  the  Member  States  in  September. 
Consequently,  the  payment  appropriations  available  for  the  budget  year  2009 
amounted to EUR 8.26 billion.  

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The  total  amount  paid  to  Member  States  for  EAFRD  programmes  in  2009 
reached EUR 8.21 billion. 

Management of payment appropriations in  2009 – 
EAFRD 

Appropriations at the beginning of 2009 

Appropriations carried over from 2008 

Amending Budget No 10 – Reduction of payment 
appropriations following revised forecasts from MS 

Appropriations available in 2009 

Appropriations used in 2009 

Unused amounts at the end of 2009  

Budget Item 

05.040501            

(amounts in €)  

9 135 331 205

774 864 326

-1 650 000 000

8 260 195 531

8 209 373 256

50 822 275

2.2.2.  Technical assistance 

In  the  2009  budget,  the  amount  for  payment  appropriations  was  EUR  9.9 
million.  At  the  end  of  the  year,  the  total  amount  of  payments  was  EUR  3.7 
million. 

3. 

THE IMPLEMENTATION OF THE 2009 EAFRD BUDGET 

3.1. 

Introduction 

Financial year 2009 mostly represented a transition between the initial phase of 
approval and initiation of rural development programmes (including payment of 
advances)  and  a  phase  where  most  programmes  attain  their  cruising  speed. 
However, this transition slowed down to some extent because of the economic 
crisis which had an effect on the Member States ability to provide the national 
co-financing  but  also  might  have  caused  beneficiaries  to  hesitate  to  enter  into 
any commitments, the late approval of certain programmes as well as a lack of 
sufficient previous experience of some Member States in the implementation of 
Rural Development programmes. 

Another  important  element  that  characterizes  the  financial  year  2009  is  the 
reprogramming process subsequent to the approval of the Health Check and the 
European Economic Recovery Package. 

3.2.  Modification of EAFRD programmes 

In 2009, a total of 132 modifications of rural development programmes (RDPs) 
for the 2007-2013 programming period were made: 76 by notification procedure 
and  56  by  Commission  Decision  after  a  positive  opinion  of  the  Rural 
Development Committee (RDC). Of these 56 modifications, 49 were approved 
in  the  context  of  the  Health  Check  and  the  European  Economic  Recovery 
Package. The number of programmes to modify (88 in total) and the complexity 
of the preparatory work and negotiations did not permit the approval of all HC 
and EERP modifications in 2009. The Commission Decisions regarding the 39 

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programmes  outstanding  were  adopted  early  in  2010,  which  explains  the 
carry-over  of  EUR  252  million  in  commitment  appropriations  from  2009  to 
2010. 

3.3. 

Implementation of commitment appropriations 

3.3.1.  EAFRD operational programmes 

The table below shows the amounts committed per Member State in 2009 and 
the  allocation  established  by  Commission  decision  636/2006  (modification  of 
October 2009 still in force at the end of the year). 

In  2009,  the  commitment  appropriations  available  for  EAFRD  programmes 
amounted  to  EUR  13.97  billion  and  the  amount  committed  to  EUR  13.72 
billion.  The  remaining  EUR  252  million  correspond  to  programmes  for  which 
the  modifications  in  relation  to  the  Health  Check  and  the  Recovery  Package 
were not approved before the year end. These appropriations were carried-over 
to 2010 and committed entirely within the deadline of 31 March 2010. Hence, 
no amount was lost for rural development programmes. 

Commission Decision 636 / 2006 (last version in force end of 2009) vs. the amounts committed 
end of 2009 (in €):

MS

AT
BE
BG
CY
CZ
DE
DK
EE
ES
FI
FR
GR
HU
IE
IT
LT
LU
LV
MT
NL
PL
PT
RO
SE
SI
SK
UK
Total

Commission Decision 636 / 
2006  –  EU funds in 2009
(a)

Amounts committed in the 
budget year 2009
(b)

Amounts carried over for 
commitment in 2010
(c = a -b)

580,732,057
62,458,083
456,843,751
23,949,762
409,036,387
1,202,865,574
67,411,254
101,036,594
1,320,830,901
308,265,407
947,341,939
482,113,090
527,075,432
346,851,422
1,183,870,921
249,948,998
13,255,487
150,342,483
11,256,597
73,671,337
1,971,439,817
584,180,154
1,502,691,530
270,816,031
136,508,049
282,749,256
706,122,271
13,973,664,584

580,732,057
61,348,083
437,343,751
23,949,762
388,036,387
1,188,636,470
67,411,254
101,036,594
1,270,959,694
308,138,561
947,176,739
453,393,090
498,635,432
329,171,422
1,145,274,921
249,948,998
13,255,487
150,342,483
11,256,597
73,671,337
1,971,439,817
584,180,154
1,502,691,530
256,996,031
136,508,049
268,049,256
702,050,871
13,721,634,827

0
1,110,000
19,500,000
0
21,000,000
14,229,104
0
0
49,871,207
126,846
165,200
28,720,000
28,440,000
17,680,000
38,596,000
0
0
0
0
0
0
0
0
13,820,000
0
14,700,000
4,071,400
252,029,757

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3.3.2.  Technical assistance 

The table below shows the commitment appropriations for technical assistance 
consumed in 2009. The most important part is related to European Network for 
Rural Development. 

Budget line

05.040502

Amounts committed in 
budget year 2009 (in €)

Comment / description

200 000

Seminar on the implementation of 
DR programs organized in Brussels

05.040502

4 208 909

Subtotal management by DG 
AGRI

05.040502

05.040502

05.040502

Subtotal management by PMO 
and OPOCE

4 408 909

428 290

200 000

101 250

729 540

Contact point of the European 
network for RD (2nd year); semi-
subsistence seminar organized in 
Sibiu (RO)

European Network for RD (Leader+ 
subcommittee, coordination 
committee, thematic working groups) 
etc. 

Expert committee on the evaluation 
of RD programmes 
Magazine for European Network for 
RD 

Total

5 138 449

3.4. 

Implementation of payment appropriations 

3.4.1.  EAFRD operational programmes 

In the 2009 budget the amount for payment appropriations, including the carry-
over  from  2008,  was  EUR  9.91  billion.  Amending  Budget  No  10  reduced  this 
amount in December by EUR 1.65 billion so that the appropriations of the year 
finally amounted to EUR 8.26 billion. 

At  the  end  of  2009,  the  total  amount  paid  for  EAFRD  programmes  was  EUR 
8.21  billion.  The  difference  between  the  appropriations  of  the  year  (EUR  8.26 
billion)  and  the  total  amount  paid  is  EUR  51.2  million,  which  represents  an 
under-execution of 0.6%. 

The table below shows the breakdown of this amount by declaration period: 

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Reimbursement of payment claims Q2 2008
Reimbursement of payment claims Q3 2008
Reimbursement of payment claims Q4 2008
Reimbursement of payment claims Q1 2009
Reimbursement of payment claims Q2 2009
Reimbursement of payment claims Q3 2009
Total 2009

(in million €)
12.3
126.6
2 546.8
1 490.4
1 612.0
2 421.2
8 209.4  

The reimbursement of 3rd quarter 2009 for 6 EAFRD programmes was totally or 
partiality on hold at the end of the year because the commitment appropriations 
for these programmes were fully exhausted by the payment of previous claims. 
The  table  below  shows  the  6  EAFRD  programmes  and  the  corresponding 
amounts. The payment had to wait until the new commitment appropriations for 
2010 were made available.  

Programme FEADER - N° CCI

Q3 2009 (in €)

Vlaanderen (2007BE06RPO001)
Nordrhein-Westfalen (2007DE06RPO015)
Aragon (2007ES06RPO002)
Ireland National (2007IE06RPO001)
Bayern (2007DE06RPO004)
Åland (Finland) 2007FI06RPO002
Total

6,425,513.33
2,100,736.79
2,506,309.72
107,643,642.54
8,534,106.68
98,742.99
127,309,052.05  

The  monthly  consumption  of  payment  appropriations  during  the  year  (January 
to  December  2009)  is  represented  in  the  graph  below.  The  rhythm  of 
consumption is linked to the calendar for sending the four payment declarations 
(31  January,  30  April,  31  July  and  10  November  for  the  payment  claims 
corresponding respectively to Q4 2008, Q1 2009, Q2 2009 and Q3 2009). 

)
o
r
u
e
n
o

i
l
l
i

i

m
n
i
(
d
a
p
s
t
n
u
o
m
A

2000

1500

1000

500

0

EAFRD - Montly consumption of payment appropriations during 2009 (in million €)

1870

676

9
0
-
r
a
M

166

9
0
-
r
p
A

139

9
0
-
n
a
J

9
0
-
b
e
F

1096

9
0
-
y
a
M

1415

994

1006

229

9
0
-
n
u
J

61

9
0
-
l
u
J

9
0
-
g
u
A

475

9
0
-
p
e
S

82

9
0
-
t
c
O

9
0
-
v
o
N

9
0
-
c
e
D

The  breakdown  per  Member  State  and  per  declaration  period  of  the  amounts 
paid by the Commission in the budget year 2009 is shown in the following table. 
The  declaration  periods  concerned  are  from16  October  to  31  December  2008 
(Q4  2008),  from  1  January  2009  to  31  March  2009  (Q1  2009),  from  1  April 

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2009 to 30 June 2009 (Q2 2009) and from 1 July 2009 to 15 October 2009 (Q3 
2009).  

In the table below, the amounts from columns Q2 2008 and Q3 2008 relate to 
the  EAFRD  programmes  that  exhausted  their  commitment  appropriations  for 
2007 and 2008 and had to wait until 2009 to have their amounts reimbursed with 
new 2009 appropriations. 

Payments effectively made in the budget year 2009 (in €)

Q2 2008

Q3 2008

2,634,830.50

10,345,809.87

12,299,213.27

18,438,179.63

95,219,252.45

MS
AT
BE
BG
CY
CZ
DE
DK
EE
ES
FI
FR
GR
HU
IE
IT
LT
LU
LV
MT
NL
PL
PT
RO
SE
SI
SK
UK

Q4 2008

427,949,468.51
10,376,897.04
24,190,671.12
5,307,184.60
110,128,510.90
374,933,155.25
12,150,036.33
23,940,802.93
156,895,320.71
13,131,174.24
258,731,262.94
20,238,236.94
156,246,669.69
75,404,378.64
79,913,810.69
34,134,107.24
2,861,814.18
20,445,383.75

5,533,019.26
215,398,260.57
96,528,233.12
109,676,461.84
55,808,494.29
27,883,610.46
116,095,838.58
112,884,460.14

Q1 2009
37,906,840.60
7,212,858.83
39,168,066.16
3,793,620.57
110,974,831.07
103,131,605.84
20,697,171.26
41,941,283.76
99,545,639.20
6,206,336.97
107,383,212.58
29,988,515.32
96,671,967.12
55,761,624.35
35,813,253.22
48,651,779.76
4,649,597.17
28,086,479.38

15,647,058.76
351,623,965.99
12,286,838.03
61,535,621.24
21,367,421.73
19,190,587.19
32,555,030.65
98,592,173.12

Q2 2009
43,897,590.17
20,897,215.45
37,693,842.23
3,497,159.91
82,178,640.52
85,070,469.75
9,535,500.93
13,754,824.08
156,002,080.45
8,153,331.43
90,156,048.85
71,138,490.87
155,032,080.49
50,432,026.42
73,086,720.11
87,349,750.54
2,085,587.64
42,060,538.99

5,793,324.73
255,735,375.64
858,574.75
144,008,337.72
12,240,963.73
38,596,260.58
66,181,492.98
56,593,186.87

Q3 2009
40,598,431.18
16,787,346.17
26,000,411.44
3,563,803.38
36,893,946.50
356,705,369.28
11,478,786.58
15,484,239.63
175,412,539.46
163,635,234.21
323,536,247.95
52,767,205.17
89,233,671.16
52,354,140.14
167,878,512.18
77,358,004.23
3,313,511.57
13,870,990.90
3,357,533.82
9,098,570.81
221,068,079.69
125,890,304.17
250,707,458.23
16,451,526.90
15,062,003.97
74,453,967.21
78,274,074.46

12,299,213.27

Total
2,421,235,910.39
The amount paid in 2009, EUR 8.21 billion, relate to reimbursements only as all 
prefinancing foreseen was paid in 2007 and 2008. 

1,490,383,379.87 1,612,029,415.83

2,546,787,263.96

126,638,072.45

Total

550,352,330.46
57,909,147.99
127,052,990.95
16,161,768.46
340,175,928.99
930,186,409.99
53,861,495.10
95,121,150.40
618,592,972.72
191,126,076.85
779,806,772.32
174,132,448.30
497,184,388.46
329,171,422.00
356,692,296.20
247,493,641.77
12,910,510.56
104,463,393.02
3,357,533.82
36,071,973.56
1,043,825,681.89
235,563,950.07
565,927,879.03
105,868,406.65
100,732,462.20
289,286,329.42
346,343,894.59

8,209,373,255.77

The  table  in  the  next  page  compares,  for  each  Member  State,  the  EAFRD 
payments  made  in  2009  to  the  payments  in  2008.  While  interim  payments  in 
2009 increased by 35.4% compared to 2008 (EUR 8.21 billion vs. 6.06 billion), 
the total amount decreased by -3.9% (EUR 8.21 billion vs. 8.54 billion) as the 
last part of pre-financing was already paid in 2008. 

EN 

11 

   EN 

 
Payments made to Member States - Comparison 2008-2009  (in €)

MS
AT
BE
BG
CY
CZ
DE
DK
EE
ES
FI
FR
GR
HU
IE
IT
LT
LU
LV
MT
NL
PL
PT
RO
SE
SI
SK
UK
Total

Interim payments

462,608,745.20
48,530,648.29
58,185,829.70
10,456,613.17
212,624,547.33
669,504,888.17
77,174,319.94
23,926,805.54
476,135,002.53
219,979,453.44
780,526,000.66
223,673,306.91
148,885,197.46
273,117,209.35
375,009,858.38
60,813,560.24
8,934,674.20
50,651,800.03

23,141,066.23
846,530,426.94
254,613,654.63

174,434,794.46
85,257,958.43
97,790,092.73
400,627,305.52
6,063,133,759.48

2008
Prefinancing

12,866,719.12
182,636,901.72

131,421,515.15
31,126,255.72
25,013,059.92
501,043,604.54
29,631,449.29
91,330,692.29
129,755,654.84

81,897,010.65
304,567,250.20

2,961,487.62
72,877,945.28
5,364,334.84

144,063,955.11
561,575,332.14
15,181,392.86

68,929,632.73
83,462,720.48
2,475,706,914.50

Total

550,352,330.46
57,909,147.99
127,052,990.95
16,161,768.46
340,175,928.99
930,186,409.99
53,861,495.10
95,121,150.40
618,592,972.72
191,126,076.85
779,806,772.32
174,132,448.30
497,184,388.46
329,171,422.00
356,692,296.20
247,493,641.77
12,910,510.56
104,463,393.02
3,357,533.82
36,071,973.56
1,043,825,681.89
235,563,950.07
565,927,879.03
105,868,406.65
100,732,462.20
289,286,329.42
346,343,894.59
8,209,373,255.77

Difference 2009 vs. 2008

( in €)

( in %)

87,743,585.26
-3,488,219.42
-113,769,740.47
5,705,155.29
127,551,381.66
129,260,006.67
-54,439,080.56
46,181,284.94
-358,585,634.35
-58,484,825.88
-92,049,920.63
-179,296,513.45
348,299,191.00
-25,842,798.00
-322,884,812.38
186,680,081.53
1,014,348.74
-19,066,352.29
-2,006,801.02
12,930,907.33
197,295,254.95
-163,113,659.67
4,352,546.89
-83,747,780.67
15,474,503.77
122,566,603.96
-137,746,131.41
-329,467,418.21

19.0%
-5.7%
-47.2%
54.6%
60.0%
16.1%
-50.3%
94.4%
-36.7%
-23.4%
-10.6%
-50.7%
233.9%
-7.3%
-47.5%
307.0%
8.5%
-15.4%
-37.4%
55.9%
23.3%
-40.9%
0.8%
-44.2%
18.2%
73.5%
-28.5%
-3.9%

Total

Interim payments

2009
Prefinancing

462,608,745.20
61,397,367.41
240,822,731.42
10,456,613.17
212,624,547.33
800,926,403.32
108,300,575.66
48,939,865.46
977,178,607.07
249,610,902.73
871,856,692.95
353,428,961.75
148,885,197.46
355,014,220.00
679,577,108.58
60,813,560.24
11,896,161.82
123,529,745.31
5,364,334.84
23,141,066.23
846,530,426.94
398,677,609.74
561,575,332.14
189,616,187.32
85,257,958.43
166,719,725.46
484,090,026.00
8,538,840,673.98

550,352,330.46
57,909,147.99
127,052,990.95
16,161,768.46
340,175,928.99
930,186,409.99
53,861,495.10
95,121,150.40
618,592,972.72
191,126,076.85
779,806,772.32
174,132,448.30
497,184,388.46
329,171,422.00
356,692,296.20
247,493,641.77
12,910,510.56
104,463,393.02
3,357,533.82
36,071,973.56
1,043,825,681.89
235,563,950.07
565,927,879.03
105,868,406.65
100,732,462.20
289,286,329.42
346,343,894.59
8,209,373,255.77

12 

0.00

EN 

EN 

 
  
 
3.4.2.  Technical assistance 

In the 2009 budget the amount for payment appropriations is € 9.9 million. The 
table hereafter presents the payments for technical assistance with a total amount 
is  related  to  European  Network  for 
of  €  3.7  million.  The  most  important  part 
Rural Development. 

Budget lines

Amounts paid in budget year 
2009 (in €)

Comment / description

05.040502-C1-AGRI AGRI-G3

3 441 139

Subtotal management by DG AGRI

05.040502-C1-AGRI/EMPL

05.040502-C1-AGRI/PMO

Subtotal management by DG 
EMPL et PMO

Total

3 441 138

176 392

116 278

292 670

3 733 809

European Network for Rural 
Development contact point, Leader+ 
seminar in Portugal, Leader+ 
magazines and best practices, etc. 

IT maintenance and development 
(SFC 2007)

European Network for Rural 
Development – reimbursement of 
charges for participating experts

3.5. 

Analysis of expenditure declared by axis and by measure 

The  table  below  shows  the  payment  claims  declared  by  Member  state  and  by 
axis/measure for rural development in 2009 (Q4 2008 to Q3 2009), from 2007 to 
2009 (Q4 2006 to Q3 2009) and also the financial plans of EAFRD programmes 
(2007-2013; EU27). 

In  year  2009,  the  expenditure  continues  to  be  concentrated  in  axis  2  (57.8%), 
followed  by  axis  1  with  32%,  axis  3  with  4.4%  and  axis  4  with  1.1%.  This 
repartition  of  expenditure  still  significantly  diverges  with  the  repartition  in  the 
financial  plans  for  the  2007-2013  programming  period  (33.6%,  44.4%,  13.3% 
and 5.9% for respectively axis 1 to 4). 

Axis  2  measures  mainly  involve  annual  payments  (e.g.  agro-environmental 
measures)  whilst  Axis  1  and  3  mainly  relate  to  multiannual  measures  that 
require  longer  proceedings  for  their  approval  and  implementation  (e.g. 
investment projects). 

Compared with the average for the first 3 years (2007-2009), in the year 2009 
the  expenditure  is  more  balanced  between  the  axis  and  the  level  of  each  axis 
tends to be closer compared to the levels of the axis in the financial plans. For 
instance, Axis 2 decreases from 75.0% in 2008 to 57.8% in 2009 while Axis 1 
increases form 21.3% in 2008 to 32.0% in 2009. 

EN 

13 

   EN 

 
 
EAFRD payment claims, by axis and by measure – year 2009 (Q4 2008 to Q3 2009),
EAFRD Payment claims, by axis and by measure - 2007 to 2009 (Q4 2006 to Q3 2009) and,
EAFRD financial plans in force (at 17 March 2010; including HC & RP; year 2007 to year 2013)

Axis / Measure EAFRD

2009 (Q4 2008 to Q3 
2009, in €)

2009 (Q4 2008 to Q3 
2009, in %)

2007 to 2009 (Q4 2006 
to Q3 2009, in €)

2007 to 2009 (Q4 
2006 to Q3 2009, in 
%)

Financial plans 2007-
2013 (in €) *

Financial plans 2007-
2013 (in %) *

111 Vocational training and information actions 
112 Setting up of young farmers
113 Early retirement 
114 Use of advisory services
115 Setting up of management, relief and advisory ..
121 Modernisation of agricultural holdings
122 Improvement of  the economic value of forests 
123 Adding value to agricultural and forestry ..
124 Cooperation for development of new products
125 Infrastructure related to the development …
126 Restoring agricultural production potential 
131 Meeting standards based on Community ..
132 Participation of  farmers in food quality …
133 Information and promotion activities 
141 Semi-subsistence farming 
142 Producer groups
143 Direct Payment (BG + RO)
144 Holdings undergoing restructuring due to a reform of a CMO
Axe 1
211 Natural handicap payments to farmers in mountain…
212 Payments to farmers in areas with handicaps, other .
213 Natura 2000 payments and payments linked ..
214 Agri-environment payments
215 Animal welfare payments
216 Non-productive investments
221 First afforestation of agricultural land
222 First establishment of agroforestry systems on ...
223 First afforestation of non-agricultural land
224 Natura 2000 payments
225 Forest-environment payments
226 Restoring forestry potential and …
227 Non-productive investments
Axe 2
311 Diversification into non-agricultural activities
312 Business creation and development 
313 Encouragement of tourism activities
321 Basic services for the economy and rural …
322 Village renewal and development 
323 Conservation and upgrading of the rural heritage
331 Training and information 
341 Skills acquisition, animation and implementation of ...
Axe 3
411 Implementing local development strategies. Compet..
412 Implementing local development strategies. Envir..
413 Implementing local development strategies. Quality ..
421 Implementing cooperation projects 
431 Running the local action group, acquiring skills and ...
Axe 4
511 Technical Assistance
611 BG RO Direct Pyaments

39,485,635.1
264,366,482.5
317,043,487.5
5,155,491.4
702,632.61
1,262,721,280.2
20,423,294.6
289,834,725.9
4,832,912.0
220,118,596.1
31,995,899.1
9,995,318.6
5,223,301.9
3,922,769.5
123,576,845.2
25,766,437.9
624,803.6

-

2,625,789,913.6
899,008,563.2
907,935,875.8
20,494,456.5
2,547,549,479.5
30,159,911.1
15,236,510.8
182,078,744.1

-

11,547,811.2
3,037,675.5
2,883,836.4
90,310,052.8
30,460,131.7
4,740,703,048.5
44,332,453.8
36,443,851.7
29,523,291.0
68,080,913.0
110,164,321.2
59,328,212.0
5,239,242.9
11,281,176.6
364,393,462.3
8,813,604.9
749,828.7
51,756,757.3
420,154.4
25,760,154.2
87,500,499.6
91,352,175.9
294,536,277.5

0.5%
3.2%
3.9%
0.1%
0.0%
15.4%
0.2%
3.5%
0.1%
2.7%
0.4%
0.1%
0.1%
0.0%
1.5%
0.3%
0.0%
0.0%
32.0%
11.0%
11.1%
0.2%
31.1%
0.4%
0.2%
2.2%
0.0%
0.1%
0.0%
0.0%
1.1%
0.4%
57.8%
0.5%
0.4%
0.4%
0.8%
1.3%
0.7%
0.1%
0.1%
4.4%
0.1%
0.0%
0.6%
0.0%
0.3%
1.1%
1.1%
3.6%

77,586,899.1
492,257,964.4
688,392,789.8
8,713,361.3
1,509,979.37
1,809,687,532.5
47,624,163.6
430,726,372.1
5,557,508.8
347,562,878.3
55,868,555.7
42,043,963.8
7,046,405.5
4,956,742.8
260,100,123.3
33,096,650.9
624,803.6

-

4,313,356,694.7
2,160,134,402.6
2,242,591,187.5
32,684,124.2
6,062,907,817.8
80,721,824.0
20,144,766.8
456,665,272.4

-

18,337,533.5
3,214,475.7
8,129,772.8
191,198,573.0
64,089,359.8
11,340,819,110.3
65,142,225.9
42,624,639.5
48,967,924.7
100,520,579.4
157,302,587.0
90,150,345.6
7,286,202.7
17,796,792.2
529,791,296.9
9,539,364.5
778,622.3
57,003,658.0
643,455.4
28,208,895.3
96,173,995.4
163,339,575.5
339,455,102.4

0.5%
2.9%
4.1%
0.1%
0.0%
10.8%
0.3%
2.6%
0.0%
2.1%
0.3%
0.3%
0.0%
0.0%
1.5%
0.2%
0.0%
0.0%
25.7%
12.9%
13.4%
0.2%
36.1%
0.5%
0.1%
2.7%
0.0%
0.1%
0.0%
0.0%
1.1%
0.4%
67.6%
0.4%
0.3%
0.3%
0.6%
0.9%
0.5%
0.0%
0.1%
3.2%
0.1%
0.0%
0.3%
0.0%
0.2%
0.6%
1.0%
2.0%

1,085,976,060.0
2,893,743,758.0
2,854,573,418.0
534,516,203.0
102,271,298.0
10,619,144,021.0
648,923,205.0
5,656,327,873.0
349,603,378.0
5,105,283,661.0
402,531,731.0
101,759,328.0
298,624,104.0
207,671,669.0
994,955,894.0
327,899,573.0
131,773,438.0
15,903,594.0
32,331,482,206.0
6,218,167,879.0
7,236,375,252.0
487,654,824.0
22,224,144,629.0
540,790,341.0
588,202,389.0
2,300,268,371.0
16,117,104.0
354,672,609.0
101,989,396.0
267,929,870.0
1,606,222,818.0
811,188,979.0
42,753,724,461.0
1,495,305,179.0
2,215,288,801.0
1,296,872,839.0
3,181,670,749.0
3,009,100,433.0
1,347,143,457.0
146,171,526.0
149,985,663.0
12,841,538,647.0
449,103,916.0
166,935,719.0
3,883,169,004.0
278,656,455.0
941,057,710.0
5,718,922,804.0
1,952,924,872.0
645,581,697.0

1.1%
3.0%
3.0%
0.6%
0.1%
11.0%
0.7%
5.9%
0.4%
5.3%
0.4%
0.1%
0.3%
0.2%
1.0%
0.3%
0.1%
0.0%
33.6%
6.5%
7.5%
0.5%
23.1%
0.6%
0.6%
2.4%
0.0%
0.4%
0.1%
0.3%
1.7%
0.8%
44.4%
1.6%
2.3%
1.3%
3.3%
3.1%
1.4%
0.2%
0.2%
13.3%
0.5%
0.2%
4.0%
0.3%
1.0%
5.9%
2.0%
0.7%

Grand total

8,204,275,377.3

100.0%

16,782,935,775.0

100.0%

96,244,174,687.0

100.0%

 * Financial plans including Health Check (HC) and Recovery Package (RP) amounts (at 17 March 2010)

EN 

14 

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3.6. 

Implementation rate of EAFRD programmes 

The graph on the next  page  presents the financial implementation rate  of rural 
development  programmes  (from  the  beginning  to  2009,  including  Q4  2009) 
compared  with  the  2007-2009  appropriations.  The  average  EAFRD  financial 
implementation rate for all EAFRD programmes is 68.4%. 

The graph shows that most Member States have absorbed more than 50% of the 
2007-2009 appropriations. 

Furthermore,  3  Member  states  have  a  level  of  declared  expenditure  which  is 
higher than the 2007-2009 commitments and the difference had to be paid with 
fresh commitments from 2010. 

EN 

15 

   EN 

 
Financial implementation rate of RD programmes (% of the EAFRD 2007 – 2009 appropriations paid or to be paid, including payment claims Q4 2009 to be paid 
in 2010) by Member state *

118%

108%

97% 98%

101%

94%

89%

84% 85%

79%

76%

58% 58% 60%

62%

64% 65% 65% 66%

69% 70%

100%

9
0
0
2
-

7
0
0
2
n
o
i
t
u
b
i
r
t
n
o
c
D
R
F
A
E

f
o
%

50%

53% 53%

48%

45%

37%

22%

0%

T
M

G
B

T
O I
R

T
P

L
P

V
L

Y
C

L
N

E
E

S
E

T
L

R
G

U
H

K
U

I

Z S
C

K
S

E
D

I

E F
S

K
D

R
F

E
B

T
A

U
L

E

I

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16 

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4. 

CONTROL MEASURES 

4.1. 

Introduction 

The  EU  legislation  provides  for  a  comprehensive  system  of  management  and 
controls which relies on four levels: 

(a) 

(b) 

(c) 

compulsory  administrative  structure  at  the  level  of  Member  States,  centred 
around the  establishment of paying agencies and an accreditation authority at 
high  level  which  is  competent  for  issuing  and  withdrawing  the  agency’s 
accreditation. The decision for issuing the accreditation is based on a detailed 
review by an external audit body; 

detailed  systems  for  controls  and  dissuasive  sanctions  to  be  applied  by  those 
paying agencies, with common basic features and special rules tailored to the 
specificities of each aid regime; 

ex-post  controls  by  independent  audit  bodies  on  the  paying  agencies'  annual 
accounts  and  the  functioning  of  their  internal  control  procedures  (under 
Regulation  (EC) No 885/20061)  and  by  special  departments  on  aid  measures 
other than direct payments covered by the IACS (checks based on Regulation 
(EC) No 485/20082); 

(d) 

clearance of accounts through the Commission (both annual financial clearance 
and multi-annual conformity clearance). 

These four levels establish a comprehensive system for the management and control 
of  agricultural  expenditure.  It  includes,  on  the  one  hand,  all  the  necessary  building 
blocks  to  guarantee  a  sound  administration  of  the  expenditure  at  Member  States’ 
level and, on the other hand, allows the Commission to counter the risk of financial 
losses  as  a  result  of  any  deficiencies  in  the  set-up  and  operation  of  those  building 
blocks through the clearance of accounts procedure.  

Article 9(1) of Regulation (EC) No 1290/20053 provides for the general obligation of 
Member States to ensure that transactions financed by the EAGF and the EAFRD are 
carried  out  and  executed  correctly,  to  prevent  and  deal  with  irregularities  and  to 
recover amounts unduly paid. 

In complement to this general obligation, there is a system of controls and dissuasive 
sanctions of final beneficiaries which reflects the specific features of the regime and 
the risk involved in its administration.  

The controls are carried out by the paying agencies or by delegated bodies operating 
under  their  supervision  and  effective,  dissuasive  and  proportionate  sanctions  are 
imposed if the controls reveal non-compliance with EU rules. The system generally 
provides  for  exhaustive  administrative  controls  of  100%  of  the  aid  applications, 

1  OJ L 171, 23.6.2006, p. 90–110. 
2  OJ L 143, 3.6.2008, p. 1–9. 
3  OJ L 209, 11.08.2005, p. 1. 

EN 

17 

   EN 

 
                                                 
cross-checks with other databases where this is considered appropriate as well as pre-
payment  on-the-spot  controls  of  a  sample  of  transactions  ranging  between  1%  and 
100%,  depending  on  the  risk  associated  with  the  regime  in  question.  For  example, 
the  control  rate  in  the  framework  of  the  Integrated  Administration  and  Control 
System (IACS) is normally 5%. If the on-the-spot controls reveal a high number of 
irregularities,  additional controls must be carried out. The sample  of transactions is 
determined on a risk and/or random basis. 

4.2. 

Integrated Administration and Control System (IACS) 

EAFRD : Axis II - Council Regulations (EC) No. 1782/20034 and (EC) No. 73/20095 
and  Commission  Regulations  (EC)  No.  796/20046  and  (EC)  No.  1122/20097  which 
contain the rules on the IACS are also applicable to Rural development support under 
Axis 2 as far as area and animal-related measures are concerned. 

A  fully  operational  IACS  consists  of:  a  computerised  database,  an  identification 
system for agricultural parcels and farmers claiming aid, a system for identification 
and  registration  payment  entitlements,  aid  applications  and  integrated  controls 
system  (claim  processing,  on-the-spot  checks  and  sanctioning  mechanisms)  and  a 
system  for  identifying  and  registering  animals  where  applicable.  The  IACS  is  fully 
automated  and  provides  highly  efficient  controls  by  maximising  the  use  of 
computerised and remote controls. 

This  system  foresees  a  100%  administrative  control  covering  the  eligibility  of  the 
claim,  complemented  by  administrative  cross-controls  with  standing  databases 
ensuring  that  only  areas  or  animals  that  fulfil  all  eligible  requirements  are  paid 
premium  and  by  a  minimum  5%  of  on-the-spot  checks  to  check  the  existence  and 
eligibility of the area or the animals claimed.   

The  use  of  standing  databases,  which  are  appropriately  updated,  is  well  adapted  to 
the schemes whereby aids are directly paid to the farmers and based on the surfaces 
or  on  the  number  of  animals,  in  that  the  risk  can  be  reduced  to  the  lowest  levels. 
Moreover,  the  result  of  the  European  Court  of  Auditors'  work  shows  that,  when 
accurate and reliable data is introduced and the system is properly implemented, the 
IACS is an effective control system to limit the risk of irregular expenditure. 

For the financial year 2009, IACS covers some 59.7% of payments made under the 
EAFRD  (89%  for  EAGF-expenditure).  The  relevant  components  of  the  IACS  are 
applicable to the rural development measures, which are based on area or number of 
animals.  Such  measures  include,  inter  alia,  agri-environment  and  animal  welfare 
measures,  less-favoured  areas  and  areas  with  environmental  restrictions  and 
afforestation of agricultural land.  

The  Commission  services  verify  the  effectiveness  of  Member  States'  IACS  and 
homogenous  implementation  by  means  of  both  on-the-spot  auditing  and  general 
supervision  based  on  annually  supplied  financial  and  statistical  data.  It  has  been 

4 OJ L 270, 21.10.2003, p. 1. 
5 OJ L30, 31.1.2009, p. 16 
6 OJ L 141, 30.4.2004, p. 18. 
7 OJ L 316, 2.12.2009, p.65 

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established already for some years now that the IACS provides an excellent and cost 
effective means of ensuring the proper use of EU funds. 

Council Regulation (EC) No 1698/20058, as amended, contains the rules on support 
for  rural  development  by  EAFRD;  Commission  Regulations  (EC)  No  1974/20069 
and 1975/200610, as amended, lay down the rules for the application and control of 
rural development support measures. 

The  control  rules  provided  by  Regulation  1975/2006  take  into  account  the 
characteristics  of  the  measures  under  Axis  2  i.e.  timing  for  the  submission  of  the 
payment claims aligned with the deadline set for the first pillar, payments made after 
the  finalization  of  the  controls,  cross-compliance  respect,  and  a  detailed  sanction 
system.  

5. 

CLEARANCE OF ACCOUNTS 

5.1. 

Conformity clearance - Introduction 

It  is  primarily  the  Member  States'  responsibility  to  satisfy  themselves  that 
transactions  are  carried  out  and  executed  correctly  via  a  system  of  control  and 
dissuasive  sanctions.  Where  Member  States  fail  to  meet  this  requirement,  the 
Commission applies financial corrections to protect the financial interests of the EU. 

The  conformity  clearance  relates  to  the  legality  and  regularity  of  transactions.  It  is 
designed to exclude expenditure from EU financing which has not been effected in 
compliance  with  EU  rules,  thus  shielding  the  EU  budget  from  expenditure  that 
should not be charged to it (financial corrections). In contrast, it is not a mechanism 
by which irregular  payments  to  beneficiaries are  recovered,  which according to  the 
principle of shared management is the sole responsibility of Member States although 
such  responsibility  should  be  executed  in  accordance  with  the  principles  of 
effectiveness and equivalence. 

Financial  corrections  are  determined  on  the  basis  of  the  nature  and  gravity  of  the 
infringement and the financial damage caused to the EU. Where possible, the amount 
is  calculated  on  the  basis  of  the  loss  actually  caused  or  on  the  basis  of  an 
extrapolation. Where this is not possible, flat-rates are used which take account of the 
severity  of  the  deficiencies  in  the  national  control  systems  in  order  to  reflect  the 
financial risk for the EU.  

Where  undue  payments  are  or  can  be  identified  as  a  result  of  the  conformity 
clearance  procedures,  Member  States  are  required  to  follow  them  up  by  recovery 
actions  against  the  final  beneficiaries.  However,  even  where  this  is  not  possible 
because  the  financial  corrections  only  relate  to  deficiencies  in  the  Member  States' 
management  and  control  systems,  financial  corrections  are  an  important  means  to 
improve these systems and thus to prevent or detect and recover irregular payments 
to  final  beneficiaries.  The  conformity  clearance  thereby  contributes  to  the  legality 

8 OJ L277, 21.102005, p 1 
9 OJ L368, 23.12.2006, p.15 
10 OJ L 368, 23.12.2006 p.74 

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and regularity of the expenditure both at the level of the financial beneficiaries and of 
the national paying agencies. 

5.2. 

Conformity clearance – audits and decisions adopted in 2009 

Audits 

In 2009, 29 conformity missions were carried out in respect of the EAFRD of which 
all enquiries for Axis 2 included the agri-environment measures. 

Conformity decisions 

During the financial year 2009, two conformity decisions were adopted which had a 
financial  impact  in  the  year.  Neither  decision  resulted  in  the  exclusion  from  EU 
financing of EAFRD expenditure:  

•  Decision 2008/960/EC of 8 December 2008 – 29th Decision.  

•  Decision No 2009/253/EC of 19 March 2009 – 30th Decision. 

Regulation  (EC)  No 1290/2005  introduced  an  automatic  clearing  mechanism  for 
non recovered irregular payments after 4 years or, in case the recovery is challenged 
in  national  courts,  8  years  after  the  establishment  of  the  irregularity.  The  financial 
consequences of non recovery are shared by the Member State concerned and the EU 
on a 50 %-50 % basis. Under EAFRD, these provisions are applicable only after the 
closure of the rural development programme. The validity of this 50%-50% rule has 
been  confirmed  by  the  General  Court  (judgement  of  22  April  2010,  joined  cases  
T-274/08 and T-275/08. 

Regarding  financial  year  2009,  Member  States  reported  the  information  about 
recovery  cases  by  1  February  2010.  The  Member  States  recovered  EUR 27  million 
during  financial  year  2009  in  relation  to  rural  development  programmes,  and  the 
outstanding  amount  still  to  be  recovered  from  beneficiaries  at  the  end  of  that 
financial  year  was  EUR 12  million.  The  amounts  recovered  can  be  reused  by  the 
Member States under the same rural development programme. As none of the rural 
development  programmes  has  been  closed  yet  the  automatic  clearance  mechanism 
set out above did not apply on the cases reported by the Member States for financial 
year 2009.  

5.3. 

Financial clearance 

5.3.1. 

Introduction 

The financial clearance covers the accounts and control systems set up by the paying 
agencies. Within this framework, DG AGRI pays particular attention to the certifying 
bodies’ conclusions and recommendations (where weaknesses are found), following 
their  reviews  of  the  paying  agencies’  management  and  control  systems.  As  part  of 
this  review,  the  DG  AGRI  departments  also  cover  aspects  relating  to  the 
accreditation criteria for the paying agencies and protecting the financial interests of 
the EU as regards the advances paid, securities obtained and intervention stocks. 

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The Commission adopts an annual clearance of accounts decision clearing the paying 
agencies'  annual  accounts  on  the  basis  of  the  certificates  and  reports  from  the 
certifying  bodies,  but  without  prejudice  to  any  subsequent  decisions  to  recover 
expenditure  which  proves  not  to  have  been  in  accordance  with  the  EU  rules.  The 
Commission must clear the accounts and adopt its clearance decision by 30 April of 
the year following the financial year in question. 

5.3.2.  Decisions 

5.3.2.1.  Financial clearance for financial year 2007 

In respect of financial year 2007, three clearance decisions were adopted in January 
2009,  clearing  the  EAGF-accounts  of  Dienst  Regelingen  (Netherlands),  PRIA 
(Estonia) and INGA (Portugal); the EAFRD-accounts of AMA (Austria), ALV and 
Région  Wallonne  (Belgium),  Baden-Württemberg  and  Bayern  (Germany)  and  also 
the TRDI-expenditure of PRIA (Estonia). At the end of 2009, three further decisions 
were  launched  clearing  the  annual  accounts  of  an  additional  5  paying  agencies  in 
respect of their expenditure funded by the EAGF, the EAFRD and the TRDI. Only 
the accounts of ARBEA (Italy) remain disjoined.  The total amount still to be cleared 
is EUR 101 million, representing 0.2 % of total expenditure in financial year 2007.  

5.3.2.2.  Financial clearance decision for the financial year 2008 

On  29  April  2009  the  Commission  adopted  three  decisions  clearing  the  annual 
accounts of 68 paying agencies in respect of their expenditure funded by the EAGF, 
the EAFRD and the TRDI. By means of these decisions it cleared an amount of EUR 
34 297 million for the EAGF, an amount of EUR 5 119 million for the EAFRD and 
an amount of EUR 452 million for the TRDI. 

At  the  end  of  2009  DG  AGRI  launched  the  procedures  for  adopting  three  further 
decisions  clearing  the  annual  accounts  of  10  paying  agencies  in  respect  of  their 
expenditure  funded  by  the  EAGF,  the  EAFRD  and  the  TRDI.    By  means  of  these 
decisions an additional amount of EUR 1 879 million for the EAGF, an amount of 
EUR  566  million  for  the  EAFRD  and  an  amount  of  EUR  2  million  for  the  TRDI 
were cleared in January 2010.  

The  accounts  of  ARBEA,  Bayern  StMLF,  ODARC  and  OPEKEPE  are  still  to  be 
cleared.  In total, EUR 2 563 million is still to be cleared for  the  EAGF, and EUR 
376 million for the EAFRD i.e. around 5 % of expenditure.  All TRDI expenditure 
has been cleared. 

5.4. 

Appeals brought before the European Courts against clearance decisions 

Judgments handed down 

In  the  financial  year  2009  no  judgements  have  been  handed  down  by  the  Court  in 
appeals brought by the Member States against clearance decisions. 

Appeals pending 

In  the  2009  financial  year  no  appeals  were  brought  by  the  Member  States  against 
clearance decisions 

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6. 

RELATIONS WITH PARLIAMENT AND THE EUROPEAN COURT OF AUDITORS 

The  relevant  information  about  the  relations  with  the  Parliament  and  the  European 
Court  of  Auditors  is  available  in  section  11  of  the  Commission  staff  working 
document accompanying the 2009 financial report on the EAGF. 

7. 

BASIC RULES GOVERNING THE EAFRD AND AMENDMENTS MADE IN 2009  

7.1. 

General 

Basic legislation 

–  Council  Regulation  (EC)  No  1698/2005  of  20  September  2005  on  support  for 
rural  development  by  the  European  Agricultural  Fund  for  Rural  Development 
(EAFRD) (OJ L 277, 21.10.2005, p.1.); as last amended by Regulation (EC) No 
473/2009 of 25 May 2009 (OJ L 144, 9.6.2009, p.3.). 

–  Commission  Regulation  (EC)  No  1974/2006  of  15  December  2006  laying  down 
detailed  rules  for  the  application  of  Council  Regulation  (EC)  No  1698/2005  on 
support  for  rural  development  by  the  European  Agricultural  Fund  for  Rural 
Development  (EAFRD)  (OJ  L  368,  23.12.2009,  p.15);  as  last  amended  by 
Regulation 482/2009 of 8 June 2009 (OJ L 145, 10.6.2009, p.17.). 

–  Commission  Regulation  (EC)  No  1975/2006  of  7  December  2006  laying  down 
detailed rules for the implementation of Council Regulation (EC) No 1698/2005, 
as regards the implementation of control procedures as well as cross-compliance 
in respect of rural development support measures (OJ L 368, 23.12.2006, p.74); as 
last  amended  by  Regulation  (EC)  No  484/2009  of  9  June  2009  (OJ  L  145, 
10.6.2009, p.25.). 

Recent modifications 

In  order  to  establish  the  legal  framework  for  the  Health  Check  and  the  European 
Economic  Recovery  Plan  (EERP),  legislation  was  updated  during  2009.  Council 
Regulation (EC) No 1698/2005 was first amended by Regulation (EC) No 74/2009 to 
introduce  the  Health  Check  amendments,  including  possibility  to  apply  higher 
amounts and rates of support and co-financing rates for the operations addressing the 
four  new  challenges  (climate  change,  water  management,  biodiversity,  renewable 
energy) and the priority "dairy restructuring".  

Additionally,  the  Council  regulation  on  direct  support  schemes  for  farmers  was 
amended by Regulation (EC) No 73/2009 which made available the additional EUR 
3.4 billion of funds "modulated" from pillar 1 to pillar 2. 

As a consequence of the EERP Council Regulation 1698/2005 was amended another 
time with Council Regulation 473/2009. This modification allows Member States to 
make use of additional funds of 1.02 billion in their rural development programmes 
in  the  years  2009  and  2010.  Furthermore,  this  amendment  specified  "support  for 
broadband infrastructure as a sixth priority on which the additional funds from EERP 
could be spend. 

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As  a  consequence  of  the  amendments  to  the  Council  regulation  the  implementing 
regulation,  Regulation  (EC)  No  1974/2006  had  to  be  amended  twice  as  well. 
Regulation  (EC)  No  363/2009  defined  the  requirement  that  the  National  Strategy 
Plans  have  to  be  revised  as  a  consequence  of  the  additional  funds  being  made 
available, defined that demarcation criteria between rural development and common 
market organisations should fall under notification procedure, raised temporarily the 
maximum amount of advances payable for investment operations, and defined output 
indicators  and  related  targets  by  type  of  operation.  Regulation  (EC)  No  482/2009 
defined procedures under which Member States could use higher co-financing rate in 
2009,  provided  the  possibility  to  grant  advances  for  the  running  costs  of  Local 
Action Groups, and made standard costs approach available for operations in natural 
heritage or high nature value sites. 

The  control  regulation  for  rural  development,  Regulation  (EC)  No  1975/2006  was 
amended by Regulation (EC) No 484/2009 which streamlined control rules of certain 
area- and animal-related measures with Pillar 1 and clarified certain other provisions. 

7.2. 

Declarations 

–  Commission Regulation (EC) No 883/2006 of 21 June 2006 laying down detailed 
rules for the application of Council Regulation (EC) No 1290/2005 as regards the 
keeping  of  accounts  by  the  paying  agencies,  declarations  of  expenditure  and 
revenue and the conditions for reimbursing expenditure under EAGF and EAFRD 
(OJ L 171, 23.6.2006, p. 1); as last amended by Commission Regulation (EC) No 
482/2009 of 8 June (OJ L145, 10.6.2009, p. 17). 

7.3. 

Checks 

–  Council  Regulation  (EC)  No  1782/2003  of  29 September 2003  (OJ  L 270, 
21.10.2003, p. 1) establishing common rules for direct support schemes under the 
common agricultural policy and establishing certain support schemes for farmers, 
and repealing Council Regulation (EEC) No 3508/92 of 27 November 2002 (OJ 
L 94, 31.3.2004, p. 70);  as last amended by Regulation (EC) No 1009/2008 of 9 
October 2008 (OJ L 276, 17.10.2008, p. 1).  

–  Council Regulation (EC) No 73/2009 of 19 January 2009 (OJ L30, 31.1.2009, p. 
16)  establishing  common  rules  for  direct  support  schemes  for  farmers  under  the 
common agricultural policy and establishing certain support schemes for farmers, 
amending Regulations (EC) No 1290/2005, (EC) No 247/2006, (EC) No 378/2007 
and  repealing  Regulation  (EC)  No  1782/2003  with  effect  from  1  January  2009 
(with some exceptions mentioned in Article 149). 

–  Commission  Regulation  (EC)  No 796/2004  of  21  April  2004  (OJ L 141,  p. 18) 
laying  down  detailed  rules  for 
implementation  of  cross-compliance, 
the 
modulation  and  the  integrated  administration  and  control  system  provided  for  in 
of  Council  Regulation  (EC)  No  1782/2003  establishing  common  rules  for  direct 
support  schemes  under  the  common  agricultural  policy  and  establishing  certain 
support  schemes  for  farmers  and  repealing  Commission  Regulation  (EC)  No 
2419/2001 of 11 December 2001 (OJ L 141, 30.4.2004, p. 8.); as last amended by 
Regulation (EC) No 1266/2008 of 17 December 2008 (OJ L 338, 17.12.2008, p. 
34.). 

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–  Commission  Regulation  (EC)  No  1122/2009  of  30 November  2009  (OJ  L  316, 
2.12.2009,  p.  65)  laying  down  detailed  rules  for  the  implementation  of  Council 
Regulation  (EC)  No 73/2009  as  regards  cross-compliance,  modulation  and  the 
integrated administration and control system, under the direct support schemes for 
farmers provided for that Regulation, as well as for the implementation of Council 
Regulation  (EC)  No 1234/2007  as  regards  cross-compliance  under  the  support 
scheme provided for the wine sector and repealing Commission Regulation (EC) 
No 796/2004 of 21 April 2004 (OJ L 141, p. 18). 

–  Council  Regulation  (EC)  No  1698/2005  of  20  September  2005  (OJ  L  277, 
21.10.2005, p. 1) on support for rural development by the European Agricultural 
Fund for Rural Development (EAFRD); as last amended by Regulation (EC) No 
473/2009 of 25 May 2009 (OJ  L 144, 9.6.2009, p. 3). 

–  Commission  Regulation  (EC)  No  1974/2006  of  15  December  2006  (OJ  L  368, 
23.12.2006,  p.  15)  laying  down  detailed  rules  for  the  application  of  Council 
Regulation (EC) No 1698/2005 on support for rural development by the European 
Agricultural  Fund  for  Rural  Development  (EAFRD);  as  last  amended  by 
Regulation (EC) No 482/2009 of 8 June 2009 (OJ L 145, 10.6.2009, p.17). 

–  Commission  Regulation  (EC)  No  1975/2006  of  7  December  2006  (OJ  L  368, 
23.12.2006, p. 74) laying down detailed rules for the implementation of Council 
Regulation  (EC)  No  1698/2005,  as  regards  the  implementation  of  control 
procedures  as  well  as  cross-compliance  in  respect  of  rural  development  support 
measures; as last amended by Regulation (EC) No484/2009 of 9 June 2009 (OJ L 
145,  10.6.2009, p. 25) 

7.4. 

Clearance of accounts 

–  Council Regulation (EC) No 1290/2005 of 21 June 2005 on the financing of the 
common  agricultural  policy  (OJ  L 209,  11.8.2005,  p. 1);  as  last  amended  by 
Regulation (EC) No 473/2009 of 25 May 2009 (OJ L 144, 9.6.2009, p. 3). 

–  Commission Regulation (EC) No 885/2006 of 21 June 2006 laying down detailed 
rules for the application of Council Regulation (EC) No 1290/2005 as regards the 
accreditation  of  paying  agencies  and  other  bodies  and  the  clearance  of  the 
accounts  of  the  EAGF  and  of  the  EAFRD  (OJ  L 171,  23.6.2006,  p. 90);  as  last 
amended  by  Regulation  (EC)  No  1034/2008  of  21  October  2008  (OJ  L  279, 
22.10.2008, p. 13). 

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