COMMISSION STAFF WORKING DOCUMENT Accompanying the document REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL 8th FINANCIAL REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the EUROPEAN AGRICULTURAL FUND FOR RURAL DEVELOPMENT (EAFRD) 2014 FINANCIAL YEAR
Date: 2016-04-06
Institutions: Directorate-General for Agriculture and Rural Development, European Commission
Subjects: EAFRD, agricultural expenditure, commitment of expenditure, financial year, payment appropriation, rural development

EUROPEAN 
COMMISSION 

Brussels, 6.4.2016  
SWD(2016) 111 final 

COMMISSION STAFF WORKING DOCUMENT 
Accompanying the document 

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND 
THE COUNCIL 

8th FINANCIAL REPORT FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT AND THE COUNCIL 
on the EUROPEAN AGRICULTURAL FUND FOR RURAL DEVELOPMENT 
(EAFRD) 
2014 FINANCIAL YEAR 

{COM(2016) 181 final} 

EN 

   EN 

 
 
 
 
  
 
Table of contents 

1. 

1.1. 

1.2. 

1.3. 

1.4. 

2. 

BUDGET PROCEDURE ................................................................................................... 4 

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

Draft Budget (DB) 2014 ............................................................................................. 5 

The adoption of the 2014 Budget .............................................................................. 6 

The adoption of the Amending Budgets................................................................... 6 

MANAGEMENT OF APPROPRIATIONS........................................................................... 6 

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

2.1.1.  EAFRD rural development programmes ..................................................................... 6 

2.1.2.  Technical assistance..................................................................................................... 7 

2.2.  Management of payment appropriations................................................................. 7 

2.2.1.  EAFRD rural development programmes ..................................................................... 7 

2.2.2.  Technical assistance..................................................................................................... 8 

3. 

3.1. 

3.2. 

IMPLEMENTATION OF THE 2014 EAFRD BUDGET ..................................................... 8 

Introduction ................................................................................................................ 8 

Implementation of commitment appropriations ..................................................... 9 

3.2.1.  EAFRD rural development programmes ..................................................................... 9 

3.2.2.  Technical assistance................................................................................................... 10 

3.3. 

Implementation of payment appropriations.......................................................... 10 

3.3.1.  EAFRD rural development programmes ................................................................... 10 

3.3.2.  Technical assistance................................................................................................... 15 

3.4. 

3.5. 

4. 

4.1. 

4.2. 

5. 

5.1. 

Analysis of expenditure declared by axis and by measure – Programming period 
2007-2013 .................................................................................................................. 15 

Implementation of EAFRD programmes - Programming period 2007-2013..... 18 

CONTROL MEASURES ................................................................................................ 20 

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

Integrated Administration and Control System (IACS) ...................................... 21 

CLEARANCE OF ACCOUNTS ....................................................................................... 22 

Financial clearance................................................................................................... 22 

5.1.1. 

Introduction................................................................................................................ 22 

5.1.2 

Financial clearance for financial year 2014 ............................................................... 22 

5.1.3 

Financial clearance for financial year 2013 ............................................................. 22 

5.1.4.  Financial clearance for financial year 2012 ............................................................. 23 

2 

 
 
 
5.1.5.  Financial clearance for financial year 2011 ............................................................. 23 

5.1.6.  Financial clearance for financial year 2010 ............................................................. 23 

5.1.7.  Financial clearance for financial year 2009 and before ........................................... 23 

5.2. 

Conformity clearance – audits and decisions adopted in 2014 ............................ 24 

5.2.1. 

Introduction................................................................................................................ 24 

5.2.2.  Conformity clearance – audits and decisions adopted in 2014 ................................. 24 

5.3. 

5.4. 

6. 

6.1. 

6.2. 

6.3. 

Recoveries ................................................................................................................. 25 

Appeals brought before the Court of Justice against clearance decisions.......... 25 

BASIC RULES GOVERNING THE EAFRD AND AMENDMENTS MADE IN 2014 ............ 26 

General ...................................................................................................................... 26 

Recent modifications................................................................................................ 27 

Delegated and implementing rules ......................................................................... 27 

6.3.1.  Common rules for European Strategic and Investment Funds (Regulation (EU) No 

1303/2013) ................................................................................................................. 27 

6.3.2.  EAFRD fund specific rules (Regulation (EU) No 1305/2013)................................... 29 

6.3.3.  Rules on financing, management and monitoring of the CAP ................................... 29 

3 

 
 
 
 
1. 

BUDGET PROCEDURE 

1.1. 

Financial framework  

CAP expenditure in 2014 is funded within two financial frameworks (MFFs): 2007-
2013  and  2014-2020.  The  financial  framework  2007-2013  was  agreed  in  the  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.  The  financil  framework  2014-2020  is  provided  by  the 
Council  Regulation  (EU)  No  1311/2013.  CAP  expenditure  is  part  of  Heading  2 
"Preservation  and  management  of  natural  resources"  in  MFF  2007-2013  and   
"Sustainable  growth:  natural  resources"  in  MFF  2014-2020.  A  specific  sub-ceiling 
has been decided for market related expenditure and direct aids within this heading. 

The CAP amounts included in heading 2 are: 

Table 1a – Financial framework 2007-2013 

HEADING 2. 

Preservation and Management of 
Natural resources 

TOTAL a), b) 

of which : 

In million EUR; current prices 

2007 

2008 

2009 

2010 

2011 

2012 

2013 

55 143 

59 193 

56 333 

59 955 

59 888 

60 810 

61 289 

- Rural development a), c), d) 

10 902 

13 303 

14 002 

14 364 

14 436 

14 617 

14 817 

- Market related expenditure and 
direct aids, c) 

44 753 

44 592 

44 887 

44 276 

44 467 

44 710 

44 939 

a) After reprogramming of rural development (EUR 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 and financial needs for ITER 2011. 

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 237/2010 EU).  

Table 1b – Financial framework 2014-2020 

HEADING 2. 

Sustainable growth: natural 
resources 

TOTAL  

of which : 

In million EUR; current prices 

2014 

2015 

2016 

2017 

2018 

2019 

2020 

49 857 

64 692 

64 262 

60 191 

60 267 

60 344 

60 421 

- Rural development a), b), c), d), e) 

5 299 

18 184 

18 685 

14 372 

14 382 

14 331 

14 334 

- Market related expenditure and 
direct aids, a), b), c), d)  

43 779 

44 190 

43 949 

44 145 

44 161 

44  240 

44 263 

a) After net transfer of EUR 351.9 million between EAGF and EAFRD for the financial year 2014 (see note f) for details) 

4 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
b) After net transfer of EUR 51.6 million between EAGF and EAFRD for the financial year 2015 (see note f) for details) 

c) After net transfer of EUR 4 million between EAGF and EAFRD for the financial years 2016-2020 (see note f) for details)  

d)  After  net  transfer  of  EUR  3581.9  million  between  EAGF  and  EAFRD  for  financial  years  2015-2020  (see  note  f)  for 
details) 

e) After the reprogramming of the EAFRD allocation of year 2014 following the application of Article 19 of MFF Regulation 
(EU) No 1311/2013 a total amount of EUR 8 705 million deducted from 2014 commitments was equally distributed to 2015 
and 2016 commitments. 

f)  The  transfers  into  Rural  Development  (EAFRD)  mentioned  in  notes  a)  to  d)  above  involve:  EUR  4  million  transferred 
annually for the whole period 2014-2020 from the cotton sector (EL) on the basis of Article 66(1) of Regulation (EU) No 
1307/2013, EUR 296.3 million set for the voluntary adjustment transferred for the financial year 2014 (UK) on the basis of 
Article  10b  and  10c(2)  of  Regulation  (EC)  No  73/2009,  EUR  51.6  million  for  unspent  amounts  transferred  each  year  for 
financial years 2014 and 2015 (SE and DE) on the basis of Articles 136 and 136b of Regulation (EC) No 73/2009 and EUR 
3581.9  million  for  the  reduction  of  payments  and  the  flexibility between  pillars on  the  basis  of Articles  7(2)  and  14(1)  of 
Regulation (EU) No 1307/2 

1.2. 

Draft Budget (DB) 2014 

The 2014 Draft Budget (DB) was adopted by the Commission and  proposed  to  the 
Budgetary Authority on 28 June 2013. 

The  Draft  Budget  for  the  European  Agricultural  Fund  for  Rural  Development 
(EAFRD)  under  heading  2  of  the  Financial  Framework  2007-2013  totalled  
EUR 10 340 million in payment appropriations. No commitment appropriations were 
requested for year 2014 as the old programming period ended in 2013. For the new 
programming  period  2014-2020,  the  DB  2014  included  EUR  13  987  million  in 
commitment appropriations and EUR 1 312 million in payment appropriations. 

Table 2 

Budget Item 

Commitment 
appropriations 
(in EUR) 

Payment 
appropriations 
(in EUR) 

2007-2013 

05.040501 (Rural dev. Programmes)  

05.040502 (Operational technical 
assistance) 

-

-

10 333 305 000 

6 433 956 

2014-2020 

05.046001 (Rural dev. Programmes) 

13 970 049 059

1 303 887 960 

05.046002 (Operational technical 
assistance) 

17 222 000

7 748 500 

The  Council  adopted  its  position  on  the  2014  Draft  Budget  on  2  September  2013. 
Payment appropriations for EAFRD programmes were reduced by EUR 4.6 million 
for  the  old  programming  period  and  EUR  50  million  for  the  new  programming 

5 

 
 
 
 
 
 
 
 
 
 
period  as  compared  to  the  Commission's  DB  while  commitments  remained 
unchanged.  The  European  Parliament  adopted  its  position  on  23  October  2013 
whereby it restored the Commission's proposal. The Conciliation procedure resulted 
in  an  agreement  between  the  two  institutions.  The  Council  and  the  European 
Parliament agreed to a compromise package on 12 November 2013. 

1.3. 

The adoption of the 2014 Budget 

The Draft Budget was approved by the Parliament in a vote on 20 November 2013. 
The voted budget for the EAFRD in chapter 05 04 amounted to EUR 10 336 million 
in payment appropriations for the programming period 2007-2013 and EUR 13 987 
million  in  commitment  appropriations  and  EUR  1  275  million  in  payment 
appropriations for the period 2014-2020. 

Table 3 

Budget Item 

05.040501 (Rural dev. Programmes 
2007-2013)  

05.040502 (Technical assistance 2007-
2013) 

05.046001 (Rural dev. Programmes 
2014-2020) 

05.046002 (Technical assistance 2014-
2020) 

Commitment 
appropriations 
(in EUR) 

Payment 
appropriations 
(in EUR) 

- 

- 

10 329 896 149 

6 433 956 

13 970 049 059

1 267 275 423 

17 222 000

7 748 500 

1.4. 

The adoption of the Amending Budgets 

Amending Budget No 2 was adopted on 17 December 2014. It reduced the payment 
appropriations  for  the  Rural  Development  Programmes  2014-2020  by  EUR  20 
million. 

2. 

MANAGEMENT OF APPROPRIATIONS 

2.1.  Management of Commitment appropriations 

2.1.1.  EAFRD rural development programmes 

Budget 2014 did not include any commitment appropriations for EAFRD 2007-2013 
programmes  whilst  commitment  appropriation  for  EAFRD  2014-2020  amounted  in 
total to EUR 13 970 million. 

6 

 
 
 
 
Table 4 

Management of commitment appropriations 
in 2014 – EAFRD 

Appropriations at the beginning of 2014 

Carryover from 2013 

Appropriations available in 2014 

Appropriations used in 2014 

Budget Item 
05.040501 
(amounts in euro) 

Budget Item 
05.046001 
(amounts in euro) 

- 

- 

- 

- 

13 970 049 059

0

13 970 049 059

3 294 627 697

2.1.2.  Technical assistance 

Article 51(1) of Regulation (EU) No 1305/2013 provides that the EAFRD may use 
up to 0.25% of its annual allocation to finance, at the initiative of the Commission, 
the technical assistance actions necessary to implement the rural development policy 
and,  in  particular,  the  costs  for  setting  up  and  operating  the  European  network  for 
rural  development  and  the  European  Innovation  Partnership  (EIP)  network.  In  the 
2014 budget, the initial amount available for this purpose was EUR 17.2 million. Of 
this,  EUR  0.7  million  was  redeployed  to  other  items  of  the  budget.  At  the  end  of 
2014, the total amount committed was EUR 11.9 million.  

2.2.  Management of payment appropriations 

2.2.1.  EAFRD rural development programmes 

For  programmes  2007-2013,  payment  appropriations  of  the  voted  budget  2014 
amounted to EUR 10 330 million. In addition, the available assigned revenue, either 
carried over from 2013 or collected during the year, amounted to EUR 149.9 million. 
During the year, the monitoring of the implementation of the budget and the analysis 
of  the  forecasts  submitted  by  Member  States  revealed  an  additional  need  of  EUR 
536.4  million  in  payment  appropriations.  This  additional  need  was  covered  with 
transfers from 2014-2020 programmes and technical assistance lines  

The total amount paid to Member States for EAFRD programmes 2007-2013 in 2014 
reached  EUR  10  947  million.  EUR  69  million  of  assigned  revenue  were 
automatically carried over to 2015. 

For programmes 2014-2020, payment appropriations of the voted budget amounted 
to EUR 1 267 million. Of this amount, only EUR 225 million were implemented in 
2014 due to the late adoption of new rural development programmes. As regards the 
surplus, part was made available to old programmes (EUR 532 million) and the rest 
was  included  in  the  End  of  Year  transfer  (EUR  490  million)  or  in  the  Amending 
Budget No 2/2014 (EUR 20 million).  

7 

 
 
 
Table 5 

Management of payment appropriations in 2014 
(in euro) 

EAFRD (2007-2013) 
Budget Item - 05.040501 

Appropriations at the beginning of 2014 
Assigned revenue carried over  from 2013 
Assigned revenue collected in 2014 
Transfers from 2014-2020 RDPs and TA lines 
Appropriations available in 2014 
Appropriations used in 2014 

EAFRD (2014-2020) 
Budget Item - 05.046001 

Appropriations at the beginning of 2014 
Transfer to 2007-2013 programmes 
Amending Budget No 2/2014 
End-of-the year transfer 
Appropriations available in 2014 
Appropriations used in 2014 

10 329 896 149 
80 494 135 
69 413 811 
536 390 000 
11 016 194 095 
10 947 350 314 

1 267 275 423 
- 532 190 000 
- 20 000 000 
- 490 090 023 
224 995 400 
224 989 886 

2.2.2.  Technical assistance 

Total payment appropriations in 2014 budget amounted to EUR 14.2 million. Of this 
amount,  EUR  6.4  million  related  to  2007-2013  outstanding  needs  (open  RAL  of 
budget  item  05.040502)  whereas  EUR  7.7  million  corresponded  to  new  period's 
technical assistance (item 05.046002). At the end of the year, total payments reached 
EUR  8.4  million  while  EUR  4.2  million  were  redeployed  to  reinforce  2007-2013 
programmes. 

3. 

IMPLEMENTATION OF THE 2014 EAFRD BUDGET 

3.1. 

Introduction 

The last commitments of the programming period 2007-2013 were made in financial 
year  2013.  As  regards  payments,  the  pace  of  the  implementation  of  rural 
development programmes recorded in 2014 continued at high level even though, for 
some programmes, declarations of expenditure were not completely reimbursed due 
to the application of the 95% capping. Execution in 2014 represents 83.5% of 2012 
execution. which is the highest execution recorded during this programming period. 

8 

 
 
 
 
3.2. 

Implementation of commitment appropriations 

3.2.1.  EAFRD rural development programmes 

In  2014,  commitment  appropriations  were  available  only  for  EAFRD  programmes 
2014-2020.  The  2014  voted  budget  amounted  to  EUR  13  970  million  but  the  late 
adoption of programmes did not permit to commit the entire amount. As a result, for 
the programmes not adopted, it was necessary either to reprogramme the allocations 
or, in case the requirements set by Regulation (EU) 966/2012 were met, to carryover 
the  corresponding  appropriations  to  year  2015.  Table  6  shows  the  allocation 
established  by  Regulation  (EU)  No  1305/2013  of  17/12/2013  as  amended  by 
Commission Delegated Regulation (EU) 2015/791 of 27/04/2015 (i.e. including the 
reprogramming)  for  new  EAFRD  programmes  and  the  amounts  committed  per 
Member State in 2014. 

Table 6 

Regulation (EU) No 1305/2013 vs. the amounts committed end of 2014 

Budget item: 05.046001 

(in euro) 

Regulation (EU) No 
1305/2013  
 – EU funds 2014 
(a) 
557 806 503 
40 855 562 
- 
- 
- 
664 601 903 
90 287 658 
103 626 144 
- 
335 440 884 
4 353 019 
- 
-
- 
- 
- 
230 392 975 
- 
138 327 376 
- 
87 118 078 
1 569 517 638 
577 031 070 
- 
- 
118 678 072 
271 154 575 
475 531 544 
5 264 723 001 

MS 

AT 
BE 
BG 
CY 
CZ 
DE 
DK 
EE 
ES 
FI 
FR 
GR 

HR 
HU 
IE 
IT 
LT 
LU 
LV 
MT 
NL 
PL 
PT 
RO 
SE 
SI 
SK 
UK 
Total 

Amounts carried 
over for commitment 
in 2014 
(b) 

Amounts committed 
in the budget year 
2014 
(c=a+b) 

- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 

557 806 503 
- 
- 
- 
- 
234 970 693 
90 287 658 
- 
- 
332 522 548 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
1 569 517 638 
509 522 657 
- 
- 
- 
- 
- 
3 294 627 697 

9 

 
 
  
  
 
3.2.2.  Technical assistance 

Table 7 shows the commitment appropriations for technical assistance consumed in 
2014. The most important part relates to European Network for Rural Development. 

Table 7 

Technical assistance – Implementation of commitment appropriations 

Budget Item: 05.046002 

Description 

Contact point of the European Network for Rural Development  

Experts groups / Coordination committee / Seminars (ENRD) 
EIP (Website and Network Facility) 
Information technology 
Protection of symbols 
Events 
European Evaluation Network (evaluation helpdesk and expert 
committees) 
Total 

 (in euro) 

 Amount 
committed  

4 000 000 

1 087 693 
2 569 923 
1 927 013 
290 443 
1 000 000 

993 950 

11 869 022 

3.3. 

Implementation of payment appropriations 

3.3.1.  EAFRD rural development programmes 

For  the  programming period 2007-2013 all payment appropriations available in the 
voted budget 2014 were implemented (EUR 10 330 million). Additional payments of 
EUR 81 million and EUR 536.4 million were made respectively with apropriations 
from assigned revenue and transfers from technical assistance lines (05.040502 and 
05.046002)  and  the  line  for  new  programmes(05.046001).  At  the  end  of  2014,  the 
total  amount  paid  for  EAFRD  programmes  2007-2013  was  EUR  10  947  million. 
EUR 68.8 million of assigned revenue were carried over to 2015 

For the programming period 2014-2020 only the pre-financing in the amount of EUR 
225 million was paid.  

Table  8  below  shows  the  breakdown  of  payments  made  in  2014  by  declaration 
period: 

10 

 
 
 
 
 
 
 
 
 
 
Table 8 

Payments 2014 for EAFRD rural development 
programmes (in million euro) 

Reimbursement of payment claims Q3 2013 

Reimbursement of payment claims Q4 2013 

Reimbursement of payment claims Q1 2014 

Reimbursement of payment claims Q2 2014 

Reimbursement of payment claims Q3 2014 

Pre-financing 2014-2020 

Total 2014 

2007-2013 

2014-2020 

Item 05.040501 

Item 05.046001 

2.61 

4 927.28 

2 101.38 

1 711.84 

2 204.24 

- 

10 947.35 

- 

- 

- 

- 

- 

224.99 

224.99 

For  programmes  2007-2013,  the  monthly  consumption  of  payment  appropriations 
during the year (January to December 2014) 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  2013,  Q1  2014,  Q2  2014  and  Q3  2014)  in 
accordance  article  22  (2)  of  the  Commission  Implementing  Regulation  (EU)  No 
908/2014. 

As  regards,  programmes  2014-2020,  all  advances  (EUR  225  million)  were  paid  in 
December 2014. 

The graph shows the monthly consumption of payment appropriations. The rhythm 
of  payments  was 
that  delayed  some 
reimbursements in the first part of 2014 (January to June) and at the end of the year. 

treasury  constraints 

influenced  by 

Graph 1 

EAFRD - Monthly consumption of payment appropriations during 2014 (in million euro)

2812

1821

1373

1199

866

1214

999

209

2

61

387

4

01-2014 02-2014 03-2014 04-2014 05-2014 06-2014 07-2014 08-2014 09-2014 10-2014 11-2014 12-2014

3000

2500

2000

1500

1000

500

0

11 

 
 
 
 
 
 
The breakdown per Member State and per declaration period of the amounts paid by 
the  Commission  for  programmes  2007-2013  in  budget  year  2014  is  shown  in  table 
9a. The total amount paid, EUR 10 947  million, relates to interim payments only. 

Table 9a 

Payments effectively made between 01/01/2014 and 31/12/2014  

Budget item 05.040501  

(in euro) 

Q3 2013 

Q4 2013 

Q1 2014 

Q2 2014 

Q3 2014 

Grand Total 

MS 

AT 

BE 

BG 

CY 

CZ 

DE 

DK 

EE 

EL 

ES 

FI 

FR 

HU 

IE 

IT 

LT 

LU 

LV 

MT 

NL 

PL 

PT 

RO 

SE 

SI 

SK 

UK 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

244 873 999 

2 689 192 

284 557 645 

13 267 957 

41 674 370 

477 758 847 

22 147 611 

19 809 432 

297 262 410 

495 902 738 

56 934 909 

351 132 742 

171 302 480 

0 

51 734 

634 840 721 

0 

0 

0 

0 

0 

0 

913 213 

0 

0 

0 

0 

22 936 917 

1 287 916 

51 845 146 

4 949 774 

24 827 909 

626 415 545 

210 553 953 

345 989 125 

178 628 972 

54 749 783 

79 574 145 

0 

3 244 454 

24 550 102 

1 055 853 

187 320 552 

119 748 265 

19 064 163 

42 326 220 

28 283 661 

0 

9 266 757 

27 675 831 

4 586 052 

54 253 139 

96 522 148 

20 158 227 

0 

54 263 779 

147 877 593 

103 782 522 

0 

139 255 349 

110 912 819 

0 

244 873 999 

1 427 705 

16 628 109 

56 967 049 

393 750 627 

3 988 489 

22 898 351 

0 

223 278 056 

21 937 263 

0 

169 354 762 

216 625 787 

0 

141 896 984 

146 395 713 

283 248 060 

917 307 316 

83 307 265 

62 135 652 

549 164 613 

964 188 641 

56 934 909 

798 152 731 

550 351 068 

0 

0 

0 

211 279 181 

229 312 537 

1 204 033 199 

49 775 609 

39 769 642 

232 381 211 

0 

0 

2 451 135 

44 919 341 

335 987 350 

139 415 532 

0 

0 

3 482 391 

1 287 916 

58 786 443 

11 410 988 

21 976 313 

111 016 078 

345 944 778 

1 700 773 103 

177 413 253 

683 122 011 

0 

165 867 656 

121 740 056 

0 

128 549 026 

119 899 042 

0 

6 941 296 

527 688 

19 292 515 

392 425 430 

154 826 061 

172 531 090 

107 792 851 

196 529 406 

34 930 716 

17 568 160 

25 024 890 

7 714 548 

33 916 658 

25 142 009 

0 

11 856 850 

18 604 336 

822 842 472 

221 274 236 

118 091 451 

148 345 380 

691 044 486 

1 646 288 

211 369 622 

167 784 553 

132 767 523 

177 476 500 

Total 

2 611 235 

4 927 283 862 

2 101 379 040 

1 711 838 362 

2 204 237 814 

10 947 350 314 

For  the  programmes  2014-2020  adopted  in  2014,  the  advances  paid  amounted  to 
EUR 224.99 million. Table 9b shows the breakdown per Member State. 

12 

 
 
  
 
  
 
 
 
 
 
 
Table 9b 

Prefinancing 2014-2020 paid between 
01/01/2014 and 31/12/2014   

(in euro) 

Budget item: 05.046001 

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

Amount  

39 375 519.97 
- 
- 
- 
- 
15 994 705.09 
6 294 006.90 
- 
- 
23 596 993.38 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
85 982 808.14 
53 745 852.35 
- 
- 
- 
- 
- 
224 989 885.83 

Table 10 compares, for each Member State, the EAFRD 2007-2013 payments made 
in  2014  with  the  payments  in  2013.  The  total  payments  decreased  by  15.5%  (EUR 
10.95 billion vs. 12.95 billion). 

13 

 
 
 
 
 
 
 
 
 
 
Table 10 
Payments made to Member States - Comparison 2014 vs 2013 (in euro) 

MS 

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

2013 

Interim payments  Prefinancing 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 

526 926 131 
52 721 009 
396 641 691 
23 033 218 
373 075 923 
1 267 359 343 
62 519 910 
127 044 772 
225 793 111 
1 038 317 781 
340 230 873 
998 803 101 
491 234 841 
256 972 589 
1 275 133 647 
252 927 822 
10  094  904 
184  032  828 
9 682 192 
99 485 140 
1 820 972 541 
656 450 463 
1 191 637 130 
182 871 555 
126 635 115 
197 308 952 
763 498 948 

2014 

Difference 2014 vs. 2013 

Total 

526 926 131 
52 721 009 
396 641 691 
23 033 218 
373 075 923 
1 267 359 343 
62 519 910 
127 044 772 
225 793 111 
1 038 317 781 
340 230 873 
998 803 101 
491 234 841 
256 972 589 
1 275 133 647 
252 927 822 
10  094  904 
184 032 828 
9 682 192 
99 485 140 
1 820 972 541 
656 450 463 
1 191 637 130 
182 871 555 
126 635 115 
197 308 952 
763 498 948 

Interim payments  Prefinancing 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 
- 

244 873 999 
16 628 109 
393 750 627 
22 898 351 
283 248 060 
917 307 316 
83 307 265 
62 135 652 
549 164 613 
964 188 641 
56 934 909 
798 152 731 
550 351 068 
0 
1 204 033 199 
232 381 211 
1  287  916 
58 786 443 
11 410 988 
111 016 078 
1 700 773 103 
683 122 011 
822 842 472 
221 274 236 
118 091 451 
148 345 380 
691 044 486 

Total 

(in euro) 

244 873 999 
16 628 109 
393 750 627 
22 898 351 
283 248 060 
917 307 316 
83 307 265 
62 135 652 
549 164 613 
964 188 641 
56 934 909 
798 152 731 
550 351 068 
0 
1 204 033 199 
232  381  211 
1  287  916 
58  786 443 
11 410 988 
111 016 078 
1 700 773 103 
683 122 011 
822 842 472 
221 274 236 
118 091 451 
148 345 380 
691 044 486 

-282 052 131 
-36 092 900 
-2 891 064 
-134 866 
-89 827 863 
-350 052 027 
20 787 355 
-64 909 120 
323 371 502 
-74 129 140 
-283 295 964 
-200 650 370 
59 116 226 
-256 972 589 
-71 100 448 
-20  546  611 
-8  806  989 
-125 246 385 
1 728 796 
11 530 938 
-120 199 438 
26 671 547 
-368 794 658 
38 402 681 
-8 543 663 
-48 963 572 
-72 454 462 

(in %) 
-53.53% 
-68.46% 
-0.73% 
-0.59% 
-24.08% 
-27.62% 
33.25% 
-51.09% 
143.22% 
-7.14% 
-83.27% 
-20.09% 
12.03% 
-100.00% 
-5.58% 
-8.12% 
-87.24% 
-68.06% 
17.86% 
11.59% 
-6.60% 
4.06% 
-30.95% 
21.00% 
-6.75% 
-24.82% 
-9.49% 

Total 

12 951 405 528 

0  12 951 405 528 

10 947 350 314 

0 

10 947 350 314 

-2 004 055 214 

-15.47% 

14 

 
 
  
  
 
  
 
3.3.2.  Technical assistance 

In the 2014 budget the amount for payment appropriations was EUR 6.4 million for 
the  programmes  2007-2013  and  EUR  7.7  million  for  the  programmes  2014-2020. 
Part  of  these  appropriations  were  transferred  to  cover  payment  needs  in  relation  to 
rural development programmes under EAFRD 2007-2013: EUR 0.8 million from the 
old programming period and EUR 3.4 million from the new programming period..  

Table  11  hereafter  presents  the  payments  grouped  by  main  activities.  The  most 
important part relates to the European Network for Rural Development. 

Table 11  

Technical assistance – Implementation of payment appropriations 

Description 

Amount paid  

Budget Item: 05.040502 

European Network for Rural Development (Contact point, expert groups, 
coordination committee, seminars..)   

European Evaluation Network (expert committees, meetings…)) 

European Innovation Partnership (EIP)  

Information technology 

Protection of EU symbols 

Total 05.040502 

Budget Item: 05.046002 

European Network for Rural Development (expert groups, coordination 
committee, seminars...) 

European Evaluation Network (expert committees, meetings…) 

European Innovation Partnership (EIP) 

Information technology 

Events 

Total 05.046002 

Total technical assistance 

(in euro) 

2 333 316 

21 426 

988 626 

1 424 401 

308 241 

5 076 010 

(in euro) 

1 076 857 

64 594 

1 099 903 

694 133

400 000

3 335 487 

8 411 497 

3.4. 

Analysis of expenditure declared by axis and by measure – Programming period 
2007-2013  

Table 12 shows the payment claims declared by Member state and by axis/measure 
for rural development in 2014 (Q4 2013 to Q3 2014) for the programmes 2007-2013, 

15 

 
 
 
 
 
 
 
the cumulative declared expenditure from 2007 to 2013 (Q4 2006 to Q3 2014) and 
also the financial plans of EAFRD programmes (2007-2013; EU27). 

In 2014, the expenditure for EAFRD 2007-2013 continues to be concentrated in axis 
2 (43.7%), followed by axis 1 with 32.1%, axis 3 with 13.5% and axis 4 with 8.9%. 
Even  though  differences  decrease  for  3  axes,  this  repartition  of  expenditure  still 
diverges from  the repartition in the financial plans for the 2007-2013 programming 
period (32.6%, 46.0%, 13.2% and 6.2% for axis 1 to 4 respectively).  

Axis  2  measures  mainly  involve  annual  payments  (e.g.  agro-environmental 
measures)  whilst  Axis  1,  3  and,  to  a  lesser  extent,  Axis  4  mainly  relate  to  multi-
annual  measures 
their  approval  and 
implementation (e.g. investment projects).  

longer  proceedings  for 

that  require 

16 

 
 
 
Table 12 

EAFRD declared expenditure 2014 (Q4 2013-Q3 2014) & Total cumulative expenditure (Q4 2006 to Q3 2014)  
compared with Financial Plans 

Declared expenditure 2014 (Q4 
2013 to Q3 2014) 

Cumulative declared expenditure 
(Q4 2006 to Q3 2014) 

Financial Plans 2007-2013 

EAFRD Axis / Measure 
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 .... 

 (million €) 

136.4 
286.2 

335.0 

21.9 

4.0 

(%) 
1.1% 
2.4% 

2.8% 

0.2% 

0.0% 

121 Modernisation of agricultural holdings 

1 386.2 

11.5% 

122 Improvement of the economic value of forest 

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  
Axis 1 
211 Natural handicap payments to farmers in ... 
212 Payments to farmers in areas with handicaps... 

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... 

223 First afforestation of non-agricultural land 

224 Natura 2000 payments 

225 Forest-environment payments 

226 Restoring forestry potential and … 

227 Non-productive investments 
Axis 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.... 

331 Training and information  

341 Skills acquisition. animation and implement...  
Axis 3 
411 Implementing local development strategies... 
412 Implementing local development strategies... 

413 Implementing local development strategies.... 

421 Implementing cooperation projects  

431 Running the local action group. acquiring ... 
Axis 4 
511 Technical Assistance 

611 BG RO Direct Payments 
Grand total 

44.2 

519.8 

45.3 

779.5 

128.5 

2.2 

14.3 

23.2 

84.1 

34.5 

1.8 

32.7 
3 879.8 
613.2 
774.1 

44.4 

2 937.2 

242.9 

131.2 

184.8 

0.3 

22.4 

16.7 

13.1 

183.1 

124.0 
5 287.31 
152.9 
212.6 

140.6 

523.9 

403.2 

180.6 

13.3 

10.0 
1 637.21 
105.9 
13.6 

778.7 

26.8 

154.4 
1 079.4 
220.2 

-0.4 
12 103.5

0.4% 

4.3% 

0.4% 

6.4% 

1.1% 

0.0% 

0.1% 

0.2% 

0.7% 

0.3% 

0.0% 

0.3% 
32.1% 
5.1% 
6.4% 

0.4% 

24.3% 

2.0% 

1.1% 

1.5% 

0.0% 

0.2% 

0.1% 

0.1% 

1.5% 

1.0% 
43.7% 
1.3% 
1.8% 

1.2% 

4.3% 

3.3% 

1.5% 

0.1% 

0.1% 
13.5% 
0.9% 
0.1% 

6.4% 

0.2% 

1.3% 
8.9% 
1.8% 

0.0% 
100.0%

17 

 (million €) 

655.0 
2 382.4 

2 386.9 

111.2 

28.8 

9 589.6 

255.4 

3 510.8 

158.6 

3 117.9 

477.1 

61.8 

79.6 

89.9 

693.8 

187.5 

8.9 

179.6 
23 974.8 
6 878.8 
7 131.2 

210.3 

(%) 
0.8% 
3.1% 

3.1% 

0.1% 

0.0% 

 (million €) 

928.5 
2 949.3 

2 459.1 

167.2 

46.9 

(%) 
1.0% 
3.1% 

2.6% 

0.2% 

0.0% 

12.3% 

11 888.4 

12.4% 

0.3% 

4.5% 

0.2% 

4.0% 

0.6% 

0.1% 

0.1% 

0.1% 

0.9% 

0.2% 

0.0% 

0.2% 

30.8% 

8.8% 
9.1% 

0.3% 

356.4 

5 307.3 

284.5 

4 677.4 

686.8 

67.0 

113.6 

144.9 

802.1 

246.5 

15.8 

191.0 
31 332.7 
6 810.9 
7 718.4 

274.9 

0.4% 

5.5% 

0.3% 

4.9% 

0.7% 

0.1% 

0.1% 

0.2% 

0.8% 

0.3% 

0.0% 

0.2% 

32.6% 

7.1% 
8.0% 

0.3% 

21 536.3 

27.6% 

23 522.9 

24.5% 

641.8 

459.9 

1 410.4 

0.9 

138.4 

49.8 

54.0 

1 145.3 

504.4 
40 161.61 
866.9 
1 094.0 

623.4 

2 487.1 

2 702.3 

862.8 

71.9 

83.6 
8 792.0 
251.3 
34.9 

2 486.4 

73.8 

700.2 
3 546.5 
1 053.7 

0.8% 

0.6% 

1.8% 

0.0% 

0.2% 

0.1% 

0.1% 

1.5% 

0.6% 
51.5% 
1.1% 
1.4% 

0.8% 

3.2% 

3.5% 

1.1% 

0.1% 

0.1% 
11.3% 
0.3% 
0.0% 

3.2% 

0.1% 

0.9% 
4.5% 
1.4% 

891.5 

584.2 

1 630.2 

8.9 

204.1 

72.1 

106.7 

1 637.2 

733.7 
44 195.65 
1 220.5 
1 729.0 

1 191.8 

3 757.9 

3 337.4 

1 218.8 

102.1 

105.2 
12 662.7 
520.5 
80.0 

4 139.3 

214.6 

964.7 
5 919.1 
1 525.1 

0.9% 

0.6% 

1.7% 

0.0% 

0.2% 

0.1% 

0.1% 

1.7% 

0.8% 
46.0% 
1.3% 
1.8% 

1.2% 

3.9% 

3.5% 

1.3% 

0.1% 

0.1% 
13.2% 
0.5% 
0.1% 

4.3% 

0.2% 

1.0% 
6.2% 
1.6% 

436.6 
77 965.3

0.6% 
100.0% 

437.8 
96 073.2

0.5% 
100.0%

 
 
  
*Member  States  declare  their  expenditure  quarterly.  However  for  year  n.  Q4  declarations  are 
submitted  in  January  of  year  n+1.  Consequently.  the  corresponding  reimbursements  by  the 
Commission to the Member States in year n go from Q4 of year n-1 until Q3 of year n. 

3.5. 

Implementation of EAFRD programmes - Programming period 2007-2013 

Graph 2 presents the financial implementation rate of rural development programmes 
2007-2013  per  Member  State:  payments  from  the  beginning  of  the  programming 
period  to  2014.  including  Q4  2014  that  is  reimbursed  in  financial  year  2015. 
compared with the 2007-2013 commitments according to the financial plan. As 2013 
was the last year when commitments were made. the implementation rate equals to 
the absorption rate (payments made from the beginning of the programming period 
compared  to  the  total  2007-2013  allocation).  The  average  EAFRD  financial 
implementation rate for all EAFRD programmes is 91%. 

Graph  2  shows  that  most  Member  States  have  absorbed  more  than  90%  of  the  
2007-2013 commitments. 

Until the end of 2014 the application of the N+2 rule has resulted in relatively small 
decommitments  for  the  rural  development  programmes.  Those  decommmitments 
amount in total to EUR 171.7 million and relate to years 2008. 2009. 2010 and 2011. 
Decommitments in relation to year 2012 are made in 2015. 

18 

 
 
 
 
19 

 
 
4. 

CONTROL MEASURES 

4.1. 

Introduction 

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

(a)  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; 

(b)  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; 

(c)  ex-post  controls  by  independent  audit  bodies  on  the  paying  agencies'  annual 
accounts and the functioning of their internal control procedures (under Commission 
Delegated  Regulation 
Implementing 
Regulation  (EU)  No  908/20142)  and  by  special  departments  on  aid  measures  other 
than direct payments covered by the IACS (checks based on Chapter III of Title V of 
Regulation (EU) No 1306/20133); 

(EU) No 907/20141 

and  Commission 

(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 58 of Regulation (EU) No 1306/2013 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. 
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 

1 
2  
3 

OJ L 255, 28.8.2014, p.18 
OJ L 255, 28.8.2014, p.59 
OJ L 347, 20.12.2013, p.549 

20 

 
 
                                                            
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. 

In  addition.  for  most  regimes  which  are  not  subject  to  the  IACS.  on  top  of  the 
primary  and  secondary  control  levels.  ex-post  controls  must  be  carried  out  in 
accordance  with  the  provisions  of  Chapter  III  of  Title  V  in  Regulation  (EU)  No 
1306/2013. 

4.2. 

Integrated Administration and Control System (IACS) 
Regulation  (EU)  No  1306/2013.  Regulation  (EU)  No  1307/20134.  Commission 
Delegated  Regulation  (EU)  No  639/20145  and  Commission  Delegated  Regulation 
(EU) No 640/20146 contain the rules on the IACS.  which are also applicable to rural 
development supportas 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  the 
aid  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 areas or 
on the number of animals. in that the risk can be reduced to the lowest levels. 

For the financial year 2014. the IACS axis 2 measures (programming period 2007-
2013)  cover  around  40%  of  payments  made  under  the  EAFRD  for  measures 
including  inter  alia.  agri-environment  and  animal  welfare  measures.  less-favoured 
areas and areas with environmental restrictions and afforestation of agricultural land. 

DG AGRI verifies the effectiveness of Member States' IACS by means of both on-
the-spot  auditing  and  general  supervision  based  on  annually  supplied  financial  and 
statistical data. The Commission continues to consider that the IACS is generally an 
effective  control  system  for  limiting  the  risk  of  error  or  irregular  expenditure. 
provided that it is properly applied. 

4 
5  
6 

OJ L 347, 20.12.2013, p.608 
OJ L 181, 20.6.2014, p. 1 
OJ L 181, 20.6.2014, p.48 

21 

 
 
 
                                                            
5. 

CLEARANCE OF ACCOUNTS 

5.1. 

Financial clearance  

5.1.1. 

Introduction 

The financial clearance covers the annual accounts and the internal control systems 
set  up  by  the  Paying  Agencies.  Within  this  framework.  DG  AGRI  pays  particular 
attention  to  the  Certification  Bodies’  conclusions  and  recommendations  formulated 
based  on  the  reviews  of  the  management  and  control  systems  of  the  Paying 
Agencies. The financial clearance exercise also allows DG AGRI to obtain assurance 
that  the  Paying  Agencies  comply  with  the  accreditation  criteria  and  the  financial 
interests of the EU are protected as regards payments. advances. securities and public 
storage. 

The  Commission  adopts  an  annual  financial  clearance  decision  based  on  the 
certification  documents  (including  the  annual  accounts  and  the  Management 
Declarations  submitted  by  the  Paying  Agencies  as  well  as  Audit  Opinions  and 
reports  of  the  Certification  Bodies).  The  financial  clearance  decision  is  without 
prejudice  to  subsequent  conformity  clearance  decisions  aimed  at  recovering 
expenditure which proves not to have been paid in accordance with the EU rules. As  
of  2015.  the  deadline  for  the  Commission  to  adopt  its  annual  financial  clearance 
decision was moved from 30 April to 31 May of the year following the financial year 
in question. 

5.1.2  Financial clearance for financial year 2014 

On  28  May  2015.  the  Commission  adopted  decision  2015/842  on  the  clearance  of 
accounts of the Paying Agencies of Member States concerning expenditure financed 
by the EAFRD for financial year 2014. This decision excluded the accounts of seven 
Paying  Agencies  as  insufficient  assurance  was  obtained  on  the  completeness. 
accuracy and veracity of their annual accounts. The Paying Agencies concerned are: 
Région  Wallonne  (Belgium).  Baden-Württemberg  and  Mecklenburg-Vorpommern 
(Germany).  Comunidad  Valenciana  (Spain).  OPEKEPE  (Greece).  MRRA  (Malta) 
and RIFA (Romania). 

The  total  expenditure  cleared  amounts  to  EUR  10.425  million  while  EUR  1.619 
million  was  disjoined.  For  the  accounts  not  included  in  the  May  2015  financial 
clearance  decision.  conformity  enquiries  were  launched  to  address  the  serious 
weaknesses detected. 

5.1.3 

Financial clearance for financial year 2013 

On  29  April  2014.  the  Commission  adopted  the  financial  year  2013  EAFRD 
clearance  of  accounts  decision  (2014/251/EU).  which  excluded  the  accounts  of  6 
Paying Agencies. as no confirmation could be gained on the completeness. accuracy 
and  veracity  of  the  annual  accounts  submitted.  The  Paying  Agencies  for  which  the 
accounts  were  disjoined  are:  SFA  (Bulgaria).  DAFA  (Denmark).  OPEKEPE 
(Greece). PARDF (Romania). Andalucía and Asturias (Spain). 

The conformity enquiries for the disjoined Paying Agencies are still ongoing.  

22 

 
 
 
5.1.4.  Financial clearance for financial year 2012 

On  26  April  2013.  the  Commission  adopted  the  financial  year  2012  EAFRD 
clearance  of  accounts  decision  (2013/209/EU).  which  excluded  the  accounts  of  7 
Paying Agencies. as no confirmation could be gained on the completeness. accuracy 
and  veracity  of  the  annual  accounts  submitted.  The  Paying  Agencies  for  which  the 
accounts were disjoined are: DAFA (Denmark). ASP (France). Baden-Württemberg. 
Thüringen and Hessen (Germany). PARDF (Romania) and Andalucía (Spain). 

In  August  2014.  a  subsequent  financial  clearance  decision  was  adopted  for  three 
German Paying Agencies: Baden-Württemberg. Thüringen and Hessen. By means of 
this  decision. a  total amount  of  EUR 244 million was cleared for the EAFRD. The 
conformity enquiries for the other four disjointed Paying Agencies are still ongoing. 

5.1.5.  Financial clearance for financial year 2011 

On  27  April  2012.  the  Commission  adopted  the  financial  year  2011  EAFRD 
clearance  of  accounts  decision  (2013/234/EU).  which  excluded  the  accounts  of  9 
Paying Agencies. The Paying Agencies for which the accounts were disjoined were: 
ODARC  and  ASP  (France).  Baden-Württemberg.  Bayern.  Rheinland-Pfalz  and 
Thüringen (Germany). PARDF (Romania). Andalucía (Spain) and SGRPID (United 
Kingdom). The Paying Agencies Baden-Württemberg. Bayern. Rheinland-Pfalz and 
Thüringen (Germany) as well as SGRPID (United Kingdom) were cleared in a later 
decision in July 2013. 

In  February  2015.  a  subsequent  financial  clearance  decision  was  adopted  for  the 
Paying  Agencies  ODARC  and  ASP  (France)  as  well  as  PARDF  (Romania).  By 
means  of  this  decision.  a  total  amount  of  EUR  1.726  million  was  cleared  for  the 
EAFRD.  With  that.  there  is  only  one  Paying  Agency  for  which  the  2011  EAFRD 
accounts are still outstanding: Andalucía (Spain). for which the conformity enquiry is 
still ongoing. 

5.1.6.  Financial clearance for financial year 2010 

In April 2011. the Commission adopted the decision 2011/271/EU clearing the 2010 
annual  accounts  for  EAFRD.  8  Paying  Agencies  have  not  been  included  and  are 
subject  to  a  further  review.  The  Paying  Agencies  Baden-Württemberg.  Bayern. 
Hessen and Rheinland-Pfalz (Germany) were cleared in a later decision in February 
2012. The accounts of the Paying Agency APA (Slovakia) were cleared in July 2013. 

In  January  2015.  the  Commission  adopted  a  decision  clearing  the  2010  annual 
accounts  of  the  Paying  Agencies  ARBEA  (Italy)  and  Ministry  of  Agriculture 
(Luxembourg).  By  means  of  this  decision.  a  total  amount  of  EUR  31  million  was 
cleared  for  the  EAFRD.  With  that.  the  only  Paying  Agency  for  which  the  2010 
EAFRD accounts are still outstanding is Région Wallonne (Belgium). for which the 
conformity enquiry is still pursued. 

5.1.7.  Financial clearance for financial year 2009 and before 

All EAFRD accounts for the financial years 2009 and before have been cleared.. 

23 

 
 
5.2. 

Conformity clearance – audits and decisions adopted in 2014 

5.2.1. 

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. 

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 
and regularity of the transactions at the level of the final beneficiaries. 

5.2.2.  Conformity clearance – audits and decisions adopted in 2014 

Audits 

In 2014. Directorate J carried out 44 audit missions and 10 desk checks in respect of 
EAFRD.  plus  2  missions  concerning  SAPARD  and  1  on  IPARD.  Out  of  these  44 
missions. 15 audit targeted Axis 2 measures. of which 9 audits covered area related 
measures controlled by IACS. 

Conformity decisions 

In  2014.  three  conformity  decisions  were  adopted  which  had  a  financial  impact  by 
excluding from EU financing of EAFRD a total of EUR 39.8 million:  

•  Decision  2014/191/EU  of  04/04/2014  –  44th  Decision.  financial  impact  of  EUR 

21.7 million. 

•  Decision  2014/458/EU  of  09/07/2014  –  45th  Decision.  financial  impact  of  EUR 

10.2 million. 

•  Decision  2014/950/EU  of  19/12/2014  –  46th  Decision.  financial  impact  of  EUR 

7.9 million. 

24 

 
 
5.3. 

Recoveries 

The  Member  States  submitted  the  information  about  irregularity  cases  by  15 
February  2015  regarding  financial  year  2014.  According  to  this  data.  the  Member 
States  have  recovered  EUR  121.9  million  during  financial  year  2014.  whereas  the 
outstanding  amount  to  be  recovered  from  beneficiaries  at  the  end  of  that  financial 
year  is  EUR  340.2  million.  Regulation  (EU)  No  1306/2013  provides  an  automatic 
clearing mechanism for unduly paid amounts not recovered after 4 or 8 years (in case 
the  recovery  is  challenged  in  national  courts)  after  the  establishment  of  an 
irregularity. The financial consequences of non-recovery are shared by the Member 
State concerned and the EU on a 50-50% basis. As of financial year 2014. according 
to Regulation (EU) No 1306/2013. the so-called '50-50 rule' is applied on an annual 
basis for both the old (2007-2013) and new (2014-2020) EAFRD programmes. For 
financial  year  2014.  this  financial  consequence  of  non-recovery  amounted  to  EUR 
18.5 million for the EU. 

With regard to the reporting of the irrecoverable cases (100% of the cost assumed by 
the  Commission).  under  the  new  regime.  EAFRD  irregularity  cases  are  declared 
irrecoverable on an annual basis. rather than after the closure of the rural programme 
as in the previous regime. In view of this change. the Member States were invited to 
declare  all  those  cases  found  irrecoverable  in  financial  year  2014  and  before. 
However.  due  to  the  technical  unavailability  of  the  Commission's  software 
WinCheckCSV to receive data for cases declared irrecoverable prior to financial year 
2014.  the  Member  States  were  given  two  options  from  which  to  choose  on  how  to 
treat their old irrecoverable cases. The first option involved the resubmission of their 
data  and  amended  Annex  II  tables  together  with  new  declarations  certifying  the 
modified  data.  The second option was  to exceptionally  postpone this declaration to 
the  financial  year  2015  clearance  procedure.  Out  of  70  Paying  Agencies  managing 
the  EAFRD.  20  submitted  new  data  as  per  the  first  option.  The  rest  of  the  Paying 
Agencies  opted  for  the  submission  of  old  irrecoverable  cases  together  with  the 
annual accounts in financial year 2015. In this context. the amount to be assumed at 
100% of the cost by the Commission for financial year 2014 amounted to EUR 17.6 
million. 

5.4. 

Appeals brought before the Court of Justice against clearance decisions 

Judgments handed down 

In 2014. two judgements have been handed down by the Court in appeals brought by 
the  Member  States  against  clearance  decisions  with  regard  to  EAFRD.  The  Court 
rejected appeals brought in the following case: 

•  Judgment of 15 July 2014 in case C-71/13 P brought by Greece; 

•  Judgment of 10 July 2014 in case C-391/13 P brought by Greece. 

New appeals 

In  2014  five  new  appeals  were  brought  by  the  Member  States  against  clearance 
decisions: 

• 

• 

Case T-675/14 brought by Spain on 22/09/2014 

Case T-107/14 brought by Greece on 14/02/2014 

25 

 
 
• 

• 

• 

Case T-124/14 brought by Finalnd on 19/02/2014 

Case T-384/14 brought by Italy 03/06/2014 

  Case T-661/14 brought by Latvia on 11/09/2014 

Appeals pending 

The  situation  as  at  31  December  2014  with  regard  to  appeals  pending  is  shown. 
together with the amounts concerned. in Table 13.  

Table 13 

Appeals  against  clearance  of  accounts  decisions  pending  on  31 
December 2014 (for EAFRD) 

Case number  Member State  Challenged amount (EUR) 

T-255/13 

T-257/13 

T-259/13 

T-3/11 

T-346/13 

T-365/13 

T-367/13 

T-561/13 

T-107/14 

T-124/14 

T-384/14 

T-661/14 

T-675/14 

TOTAL 

IT 

PL 

FR 

PT 

GR 

LT 

PL 

ES 

GR 

FI 

IT 

LV 

ES 

-5 599 441.61

-28 763 238.60

-28 955 683.35

-213 224.74

-6 175 094.49

-3 448 510.00

-71 610 559.39

-757 968.97

-388 788.57

-927 827.58

-2 424 822.00

-303 187.46

-100 933.04

-149 669 279.80

6. 

BASIC RULES GOVERNING THE EAFRD AND AMENDMENTS MADE IN 2014 

6.1. 

General 

Basic legislation 

-  Regulation (EU) No 1303/2013 of the European Parliament and of the Council of 
17  December  2013  laying  down  common  provisions  on  the  European  Regional 
Development Fund. the European Social Fund. the Cohesion Fund. the European 
Agricultural  Fund  for  Rural  Development  and  the  European  Maritime  and 
Fisheries  Fund  and  laying  down  general  provisions  on  the  European  Regional 
Development  Fund.  the  European  Social  Fund.  the  Cohesion  Fund  and  the 

26 

 
 
 
 
European  Maritime  and  Fisheries  Fund  and  repealing  Council  Regulation  (EC) 
No 1083/2006 (OJ L 347. 20.12.2013. p. 320–469); 

-  Regulation (EU) No 1305/2013 of the European Parliament and of the Council of 
17  December  2013  on  support  for  rural  development  by  the  European 
Agricultural  Fund  for  Rural  Development  (EAFRD)  and  repealing  Council 
Regulation (EC) No 1698/2005 (OJ L 347. 20.12.2013. p. 487–548); 

-  Regulation (EU) No 1306/2013 of the European Parliament and of the Council of 
17 December 2013 on the financing. management and monitoring of the common 
agricultural policy and repealing Council Regulations (EEC) No 352/78. (EC) No 
165/94. (EC) No 2799/98. (EC) No 814/2000. (EC) No 1290/2005 and (EC) No 
485/2008 (OJ L 347. 20.12.2013. p. 549–607) 

-  Regulation (EU) No 1310/2013 of the European Parliament and of the Council of 
17  December  2013  laying  down  certain  transitional  provisions  on  support  for 
rural  development  by  the  European  Agricultural  Fund  for  Rural  Development 
(EAFRD). amending Regulation (EU) No 1305/2013 of the European Parliament 
and  of  the  Council  as  regards  resources  and  their  distribution  in  respect  of  the 
year 2014 and amending Council Regulation (EC) No 73/2009 and Regulations 
(EU)  No  1307/2013.  (EU)  No  1306/2013  and  (EU)  No  1308/2013of  the 
European Parliament and of the Council as regards their application in the year 
2014 (OJ L 347. 20.12.2013. p. 865–883). 

6.2. 

Recent modifications 

Regulation (EU) No 1305/2013 was modified twice in 2014. The annual breakdown 
of  Union  support  to  EAFRD  in  Annex  I  was  modified  by  Commission  Delegated 
Regulations (EU) No  994/2014  and No 1378/2014 to take into account the amount 
transferred by Member States  between the 1st and 2nd pillars of the CAP. 

6.3. 

Delegated and implementing rules 

As  foreseen  in  the  basic  legislation.  in  2014.  the  Commission  adopted  a  set  of 
Delegated and Implementing acts to supplement certain non-essential elements of the 
legal framework and to ensure uniform conditions for the implementation. 

6.3.1.  Common  rules  for  European  Strategic  and  Investment  Funds  (Regulation  (EU)  No 

1303/2013) 

-  Commission Delegated Regulation (EU) No 240/2014 of 7 January 2014 on the 
European  code  of  conduct  on  partnership  in  the  framework  of  the  European 
Structural and Investment Funds (OJ L 74. 14.3.2014. p. 1–7); 

-  Commission  Delegated  Regulation  (EU)  No  480/2014  of  3  March  2014 
supplementing  Regulation  (EU)  No  1303/2013  of  the  European  Parliament  and 
of  the  Council  laying  down  common  provisions  on  the  European  Regional 
Development Fund. the European Social Fund. the Cohesion Fund. the European 
Agricultural  Fund  for  Rural  Development  and  the  European  Maritime  and 

27 

 
 
 
Fisheries  Fund  and  laying  down  general  provisions  on  the  European  Regional 
Development  Fund.  the  European  Social  Fund.  the  Cohesion  Fund  and  the 
European Maritime and Fisheries Fund (OJ L 138. 13.5.2014. p. 5–44); 

-  Commission  Implementing  Regulation  (EU)  No  184/2014  of  25  February  2014 
laying  down  pursuant  to  Regulation  (EU)  No  1303/2013  of  the  European 
Parliament and of the Council laying down common provisions on the European 
Regional Development Fund. the European Social Fund. the Cohesion Fund. the 
European Agricultural Fund for Rural Development and the European Maritime 
and  Fisheries  Fund  and  laying  down  general  provisions  on  the  European 
Regional Development Fund. the European Social Fund. the Cohesion Fund and 
the European Maritime and Fisheries Fund. the terms and conditions applicable 
to  the  electronic  data  exchange  system  between  the  Member  States  and  the 
Commission  and  adopting  pursuant  to  Regulation  (EU)  No  1299/2013  of  the 
European  Parliament  and  of  the  Council  on  specific  provisions  for  the  support 
from  the  European  Regional  Development  Fund  to  the  European  territorial 
cooperation goal. the nomenclature of the categories of intervention for support 
from  the  European  Regional  Development  Fund  under  the  European  territorial 
cooperation goal (OJ L 57. 27.2.2014. p. 7–20); 

-  Commission  Implementing  Regulation  (EU)  No  215/2014  of  7  March  2014 
laying  down  rules  for  implementing  Regulation  (EU)  No  1303/2013  of  the 
European Parliament and of the Council laying down common provisions on the 
European Regional Development Fund. the European Social Fund. the Cohesion 
Fund. the European Agricultural Fund for Rural Development and the European 
Maritime  and  Fisheries  Fund  and  laying  down  general  provisions  on  the 
European Regional Development Fund. the European Social Fund. the Cohesion 
Fund  and 
to 
methodologies  for  climate  change  support.  the  determination  of  milestones  and 
targets  in  the  performance  framework  and  the  nomenclature  of  categories  of 
intervention  for  the  European  Structural  and  Investment  Funds  (OJ  L  69. 
8.3.2014. p. 65–84). amended by Commission Implementing Regulation (EU) No 
1232/2014 of 18 November 2014; 

the  European  Maritime  and  Fisheries  Fund  with  regard 

-  Commission Implementing Regulation (EU) No 821/2014 of 28 July 2014 laying 
down rules for the application of Regulation (EU) No 1303/2013 of the European 
Parliament  and  of  the  Council  as  regards  detailed  arrangements  for  the  transfer 
and  management  of  programme  contributions.  the  reporting  on  financial 
instruments. 
information  and  communication 
measures  for  operations  and  the  system  to  record  and  store  data  (OJ  L  223. 
29.7.2014. p. 7–18); 

technical  characteristics  of 

28 

 
 
-  Commission Implementing Regulation (EU) No 964/2014 of 11 September 2014 
laying  down  rules  for  the  application  of  Regulation  (EU)  No  1303/2013  of  the 
European Parliament and of the Council as regards standard terms and conditions 
for financial instruments (OJ L 271. 12.9.2014. p. 16–44) 

6.3.2.  EAFRD fund specific rules (Regulation (EU) No 1305/2013) 

-  Commission  Delegated  Regulation  (EU)  No  807/2014  of  11  March  2014 
supplementing  Regulation  (EU)  No  1305/2013  of  the  European  Parliament  and 
of  the  Council  on  support  for  rural  development  by  the  European  Agricultural 
Fund  for  Rural  Development  (EAFRD)  and  introducing  transitional  provisions 
(OJ L 227. 31.7.2014. p. 1–17); 

-  Commission Implementing Regulation (EU) No 808/2014 of 17 July 2014 laying 
down rules for the application of Regulation (EU) No 1305/2013 of the European 
Parliament and of the Council on support for rural development by the European 
Agricultural Fund for Rural Development (EAFRD) (OJ L 227. 31.7.2014. p. 18–
68) 

6.3.3.  Rules on financing. management and monitoring of the CAP 

-  Commission  Delegated  Regulation  (EU)  No  640/2014  of  11  March  2014 
supplementing  Regulation  (EU)  No  1306/2013  of  the  European  Parliament  and 
of  the  Council  with  regard  to  the  integrated  administration  and  control  system 
and conditions for refusal or withdrawal of payments and administrative penalties 
applicable  to  direct  payments.  rural  development  support  and  cross  compliance 
(OJ L 181. 20.6.2014. p. 48–73); 

-  Commission Implementing Regulation (EU) No 809/2014 of 17 July 2014 laying 
down rules for the application of Regulation (EU) No 1306/2013 of the European 
Parliament  and  of  the  Council  with  regard  to  the  integrated  administration  and 
control  system.  rural  development  measures  and  cross  compliance  (OJ  L  227. 
31.7.2014. p. 69–124); 

-  Commission  Delegated  Regulation  (EU)  No  907/2014  of  11  March  2014 
supplementing  Regulation  (EU)  No  1306/2013  of  the  European  Parliament  and 
of  the  Council  with  regard  to  paying  agencies  and  other  bodies.  financial 
management.  clearance  of  accounts.  securities  and  use  of  euro  (OJ  L  255. 
28.8.2014. p. 18–58); 

-  Commission  Implementing  Regulation  (EU)  No  908/2014  of  6  August  2014 
laying  down  rules  for  the  application  of  Regulation  (EU)  No  1306/2013  of  the 
European Parliament and of the Council with regard to paying agencies and other 
bodies. financial management. clearance of accounts. rules on checks. securities 
and transparency (OJ L 255. 28.8.2014. p. 59–124). 

29