CELEX: 51976PC0412
Language: en
Date: 1976-07-27
Title: PROPOSAL FOR A COUNCIL DIRECTIVE on the scrutiny, by Member States, of transactions forming part of the system of financing by the Guarantee Section of the European Agricultural Guidance and Guarantee Fund (submitted to the Council by the Commission)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (76) 412
Vol. 1976/0124
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In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983
concerning the opening to the public of the historical archives of the European Economic
Community and the European Atomic Energy Community (OJ L 43, 15.2.1983, p. 1), as
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 ---pagebreak---  COMMISSION OF THE EUROPEAN COMMUNITIES
                                            COM(76)412 final.
                                            Brussels , 27 July 1976 .
                       S                          \
                                              \
                  PROPOSAL FOR A COUNCIL DIRECTIVE
         on the scrutiny , "by Member States , of transactions
         forming part of the system of financing "by the Gua­
        rantee Section of the European Agricultural Guidance
                         and Guarantee Fund
            ( submitted to the Council by the Commission )            /
COM(76 ) 412 final .
 ---pagebreak---                                 EXPLANATORY MEMORANDUM
 It has been found that there is considerable variation from one Member State to
 another       as regards the scrutiny, in particular by means of the inspection of
 commercial documents and accounts , of undertakings .which receive or pay sums under
  the system of financing by the EAGGP . While in some Member States this type of
  scrutiny is fairly widespread , in others it is never used or only in clearly de­
  fined cases , mainly where an irregularity is suspected .
  Examination of cases of irregularities notified by Member States to the Commission
  pursuant to Article 3 of Regulation (EEC) No 283/72 (l ) , shows, however , that most
  of them were discovered following scrutiny of undertakings on the basic of all
  commercial documents , in particular the accounts , correspondence and ether informa­
  tion regarding their business activities . Further , more irregularities have been
  discovered and sums recovered for the EAGGF in those Member States with a system
  of inspecting the commercial documents of undertakings than in those without such
   a system ( 2 ) .
   Therefore , provision should be made for this type of inspection in all Member States
   of the Community to better protect EAGGP funds and to reinforce the campaign against
   irrtegularities in agriculture . This initiative indeed reflects a wish expressed
   by the Special Committee of Inquiry which has also stressed the importance it
   attaches to generalizing the inspection of commercial documents and accounts .
   Therefore , the proposal for a directive requires Member States to scrutinize on
    their own responsibility and on a scale and at a pace to be decided by them ac­
.. wording to circumstances , the commercial documents of undertakings that receive
    or pay sums in connection with transactions financed by the EAGGP . Further , a
    Community threshold is fixed after which such inspection becomes mandatory .
    While the new inspection system is being launched , the obligation will be limited
    to part of the undertakings concerned to enable Member States to constitute the
    teams of inspectors required . Further , the proposal specifies some of the powers
    which inspectors must be given to enable them to perform their duties .
     (1 ) Council Regulation of 7 February 1972 concerning irregularities and the
          recovery of suras wrongly paid in connection with the financing of the common
          agricultural policy and the organization of an information system in this
          field , OJ No L 36 , 10.2.1972 , p. 1 .
    (2) Details are given in the Annex.
 ---pagebreak---                                                                                                 ANNEX
  Summarised state* i»nt of the irregularities cases communicated by the Member States
  nndor Article 3 of Re lation (BSC ) No 383/72 (years 1973 , 1974 and 1975 ) .
  Bote ; In certain cases the scrutiny of commercial documents may be applied following
            information or other types of control . In certain cases the number of irregula­
            rities detected by the scrutiny of commercial documentation could be greater
            than is revealed in the table "below , since the information available to the
           EAGGF does not always allow the method of detection of the irregularities to
           be determined with exactitude ,
                                Cases recorded by the Member                 Number of cases established by
  Member States                               States                         the scrutiny of commercial do­
                                                                                             cuments
                                Number          Amounts in UA
                                                    ( rounded )
  Belgium                           8              11.000
I Denmark                          33         1.000.000
                                                                                               31
                          i       168                                                        168
  Germany                                     2.540.000
  France                  I        20      ; 3.320.000                                         18
                                                                         i
  United Kingdom                   14              38.000                                       1
                –
  Ireland                           5              22.000             I
                                            1 1        .1              1
   Italy                 i         30             400.000              !
   Luxer,'îburg
   The Netherlands                                106.000
                                                                                                 5
   Total                          291           7.437 . OOO                                   223                   I
     certain amounts not yet communicated .
    Undertakings receiving from or paying to the EAGGF Guarantee Section more than
    50.000 UA per year .
                              50.000 - 100.000 UA           100.000 - 500.000 UA        more than           TOTAL
    Member States
                                                                                        500.000 UA
                                        62                          101                     66                 229
    Belgium
    Denmark                             70                          125                   110                  305
  I Germany                 I          500                          800                   430             1.730
                                                                    338                   210         i        724
  [ France                             176
                                    1.023                           360                    104            1 . 487
    United Kingdom
   jlrelami                             81                          115
                                                                                     ι
                                                                                            99 "      i
                                                                                                      r
                                                                                                     1»
                                                                                                             _ poC
   J Italy                          1.294
                                                          I
                                                                    904                    136            2.334
     Luxemburg                           2                                 6       !        . 1
     TVip TTp+.herl nnds              122                           151                _.JLZ1         T–h–cTYl
                                                                                        1-^77           1  ( .    1
     Total                          3.330
 ---pagebreak---                                  Proposal for a
                                C0yNCIL_5IRECTIVE
      the inspection by Member States of transactions forming part of the system
      financing by the Guarantee Section of the European Agricultural Guidance
                           N . and Guarantee Fund
HE COUNCIL OF THE EUROPEAN COMM^jIES ,
 aving regard to the Treaty establish"w%^he European Economic Community, and
 n particular Article 43 thereof ;
               "d to the proposal from the Commissiotf'Sv^;
                                                          - χ -- .
                                                                Χι \
Having regard to the Opinion of the European Parliaments-
Whereas Article 8 of Regulation ( EEC ) No 729 / 70 on the finar\i ng Qf t h e common
                        2)
agricultural policy , as last amended by Regulation ( EEC ) No ^^8/72          provides
that Member States shall take the measures necessary to satisfy themselves that
 transactions financed by the European Agricultural Guidance and Guarantee Fund
  ( EAGGF ) are actually carried out and are executed correctly, to prevent and deal
 with irregularities and to recover sums lost as a result of irregularities or
 negligence ;
  Whereas the inspection of the commercial documents of undertakings receiving or
  making payments is a very effective means of checking the transactions financed
,^'jHhe Guarantee Section of the EAGGF and should therefore be made general
    L     "     SO Community by laying down minimum number of 'inspections to be carried
   out by the Membe . ôtdttc
  whereas the basic documents for such inspections should be those which aUow a
   full inspection of the business activities concerned;
  Whereas Hember States should in the first place determine the frequency and
  scope of these inspections in the light of the nature of the transactions that
 take place under their responsibility; whereas, however, a minimum frequency
 should be laid down for inspecting the commercial documents in cases of special
 interest because of their financial scale;
Whereas the specific stock records kept by undertakings should not only be
inspected but should also be compared with other information to verify their
accuracy ;
1)
2) 0J No L 94, 28 . 4.1970, p. 13 .
3 ) 0J No L 2 5 , 30.12.1972, p. 1 .
 ---pagebreak---                                       - 2 -
 Whereas the powers of the officials responsible for the inspection and the
 obligations of undertakings to make the commercial documents available to
 them during a specific period should be specified ; whereas provision should
 be made for the seizure of commercial documents in certain cases ;
Whereas the international structure of the trade agricultural products
 requires a degree of cooperation between the Member States ;
Whereas information should be exchanged at Community level so that the results
of applying this Directive may be used to the best advantage ;
Whereas the commercial and industrial secrecy of the undertakings that have
been subject to inspection must be respected ;
Whereas pursuant to this Directive the Member States must set up a new system
of inspection which will require a team of specialized inspectors ; whereas there
should therefore be a transitional period during which the number of inspections
may be restricted ,
HAS ADOPTED THIS DIRECTIVE :
                                   Article 1
1 . This Directive relates to the inspection of the commercial documents of
    undertakings receiving or making payments , hereinafter referred to as
    " the undertakings ", to ascertain that transactions forming part of the
    system of financing of the Guarantee Section of the EAGGF have actually
    been carried out and executed correctly .
2 . For the purposes of this Directive " commercial documents " means all the
    books , registers , vouchers and supporting documents , accounts and correspondence
    relating to the business activity of the undertaking .
                                   Article 2
1 . Without prejudice to the right to make random checks or special inspections ,
    particularly in the case of a suspected irregularity , Member States shall
    carry out the inspection of the commercial documents of the undertakings .
    The scope and frequency of such inspection shall be determined by the competent
    authorities in the Member States , account being taken of the type of transactions
    to be inspected .                                         •
 ---pagebreak---                                      - 3 -
 , Nevertheless / where the receipts of a single undertaking or its payments to the
      Guarantee Section of the EAGGF , or the total thereof , exceed 100 000 units of account
     per year , the commercial documents shall "be Inspected at least once every two
     yearG . Th6 inspection shall extend over a appropriate period to be determined by
      the competent authorities of the . Member States .
                                     Article 3
/here undertakings keep specific stock records in accordance with Community
>r national provisions , the inspection of these records shall in appropriate cases in-
jlude a comparison with the commercial documents and , if necessary , the actual quan­
tities in stock .
                                     Article 4
Member States shall require undertakings to keep the oommeroial documents referred to in
Article 1 ( 2 ) for at least five years .
                                      Article 5
  1 . Member States shall take all necessary steps to 1 ensure that the officials respon­
       sible for the inspection have access to the premises and commercial documents of
       the undertakings .
   2 . ; Tomber States shall provide that the officials responsible for the inspection may
        take     extracts or copies of the documents referred to in paragraph 1 .
                                      Article 6
   ./here it is suspected that an irregularity which may give rise to legal or administra­
  tive proceedings has been committed by an undertaking undergoing inspection , the
  officials responsible for the inspection shall be authorized to take possession of the
  commercial documents concerned , or to arrange for the competent persons to do so .
                                      Article 7
  Member States shall assist each other in carrying out the inspection provided for in
  Articles 2 and 3 when an undertaking is established in a Member State other than that
   in which the payment of the amount concerned has been or should have been made or
    received .
 ---pagebreak---                                  Article 3
1 . In the reports drawn up pursuant to Article 4(3 ) of Regulation ( EEC ) No 729 / 70
    Member States shall devote a special chapter to the application of this Directive
                                                                                          V
                                                                                        I
2 . At the request of the Commission , Member States shall forward inspection reports o
    specific sectors or transactions .
                                 Article 9
1 . Information collected in the course of inspections in pursuance of this Directive
    shall be covered "by the obligation of professional secrecy . It may not be commu­
    nicated to any persons other than those who "by reason of their duties in the
    Member States or Community institutions are required to have knowledge thereof .
2 . In exchanges of information between Member States and between them and the
    Commission , information jeopardizing the commercial and industrial secrecy of
    undertakings shall not be forwarded unless this is necessary in order for the
    inspection referred to in this Directive to be carried out .
                                 Article 10
During the first three years following the year when this Directive i3 put into
effect as provided in Article 11 , the inspection referred to in Article 2(2 ) may,
 at the choice of the Member State , be cinfined to :
- undertakings where the amount referred to .therein is not less than
   250 000 units of account ; or
- a representative number of the undertakings referred therein , such number being
   at least one third of such undertakings .
                                 Article 11
Member States shall bring into force the measures necessary to comply with this
Directive within twelve months of its notification and shall inform the Commission
thereof .. ithout delay .
 ---pagebreak---                                 - 5 -
                                Article 12
Thi3 Directive is .addressed, to the Member States .
                                                     For the Council
Done at
                                                      The President