Article 53 Financial provisions
1. In order to finance the coupled support, Member States may, by 1 August of the year preceding the first year of implementation of such support, decide to use up to 8 % of their annual national ceiling set out in Annex II. 2. By way of derogation from paragraph 1, Member States may decide to use up to 13 % of the annual national ceiling set out in Annex II, provided that: (a) until 31 December 2014: (i) they apply the single area payment scheme laid down in Title V of Regulation (EC) No 73/2009, (ii) they finance measures under Article 111 of that Regulation, or (iii) they are covered by the derogation provided for in Article 69(5) or, in the case of Malta, in Article 69(1) of that Regulation; and/or (a) until 31 December 2014: (i) they apply the single area payment scheme laid down in Title V of Regulation (EC) No 73/2009, (ii) they finance measures under Article 111 of that Regulation, or (iii) they are covered by the derogation provided for in Article 69(5) or, in the case of Malta, in Article 69(1) of that Regulation; and/or (b) they allocate, in total, during at least one year in the period 2010-2014, more than 5 % of their amount available for granting the direct payments provided for in Title III, Title IV, with the exception of Section 6 of Chapter 1 thereof, and Title V of Regulation (EC) No 73/2009 for financing: (i) the measures laid down in Section 2 of Chapter 2 of Title III of Regulation (EC) No 73/2009, (ii) the support provided for in subpoints (i) to (iv) of point (a) and in points (b) and (e) of Article 68(1) of that Regulation, or (iii) the measures under Chapter 1, with the exception of Section 6 of Title IV of that Regulation. (b) they allocate, in total, during at least one year in the period 2010-2014, more than 5 % of their amount available for granting the direct payments provided for in Title III, Title IV, with the exception of Section 6 of Chapter 1 thereof, and Title V of Regulation (EC) No 73/2009 for financing: (i) the measures laid down in Section 2 of Chapter 2 of Title III of Regulation (EC) No 73/2009, (ii) the support provided for in subpoints (i) to (iv) of point (a) and in points (b) and (e) of Article 68(1) of that Regulation, or (iii) the measures under Chapter 1, with the exception of Section 6 of Title IV of that Regulation. 3. The percentages of the annual national ceiling referred to in paragraphs 1 and 2 may be increased by up to two percentage points for those Member States which decide to use at least 2 % of their annual national ceiling set out in Annex II to support the production of protein crops under this Chapter. 4. By way of derogation from paragraphs 1 and 2, Member States allocating, in total, during at least one year in the period 2010-2014, more than 10 % of their amount available for granting the direct payments provided for in Title III, Title IV, with the exception of Section 6 of Chapter 1 thereof, and Title V of Regulation (EC) No 73/2009 for financing: (b) the support provided for in subpoints (i) to (iv) of point (a) and in points (b) and (e) of Article 68(1) of that Regulation; or (c) the measures under Chapter 1, with the exception of Section 6, of Title IV of that Regulation may decide to use more than 13 % of the annual national ceiling set out in Annex II to this Regulation, upon approval by the Commission in accordance with Article 55 of this Regulation. 5. By way of derogation from the percentages set out in paragraphs 1 to 4, Member States may choose to use up to EUR 3 million per year for financing coupled support. 6. Member States may, by 1 August 2016, review their decision pursuant to paragraphs 1 to 4 and decide, with effect from 2017: (a) to leave unchanged, increase or decrease the percentage fixed pursuant to paragraphs 1, 2 and 3, within the limits laid down therein where applicable, or to leave unchanged or decrease the percentage fixed pursuant to paragraph 4; (b) to modify the conditions for granting the support; (c) to cease granting the support under this Chapter. 7. On the basis of the decision taken by each Member State pursuant to paragraphs 1 to 6 of this Article, the Commission shall adopt implementing acts fixing the corresponding ceilings for coupled support on a yearly basis. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 71(2).
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal The Financial Regulation 1 sets out the principles and procedures governing the establishment and implementation of the EU budget and the control of the EU funds. Over the last 30 years, the number of general financial rules contained in the Financial Regulation has increased sharply 2 . In addition, a number of sectoral financial rules have emerged: the rules for participation to the Framework Programme for Research and Innovation 3 , the Common Provisions to the European Structural and Investment Funds 4 and the Common Implementing Rules for the External Action 5 . Users of EU funds have repeatedly complained about the proliferation of rules both at general and at sectoral level, their heterogeneity and their complexity due to the fact that they follow the architecture of the programme and multiple layers of controls. In addition, the complexity of the financial set of rules has slowed down implementation of the EU funds, making it costly and prone to errors. A first step towards more coherent and simpler financial rules was achieved in 2012: the Commission tabled proposals for the programmes covered by the MFF 2014-2020 which reduced the number of programmes and instruments, grouped them under a single framework with common rules, simplified procedures for application and declaration of costs by final beneficiaries, facilitated the deployment of innovative financial instruments, enabled EU Trust-Funds and improved the cost-efficiency of controls. Recent revisions have aligned the Financial Regulation on the results of the negotiation to the MFF 2014-2020 (2013 revision) as well as to the new Procurement Directive (2015 revision). However, there is room for further simplification . This is confirmed by the experience gained since 2014 and by the work of the High Level Group of Independent Experts on Monitoring Simplification for Beneficiaries of the European Structural and Investment Funds 6 . The public consultation on the revision of the Financial Regulation 7 also shows stakeholders’ clear expectations in the area. Efforts must therefore continue in order to remove bottlenecks, ensure synergies and complementarities between ESI Funds and the other EU funds and improve efficiency of delivery and control requirements. Simpler and more flexible financial rules will contribute to optimising spending and impact of the MFF 2014-2020 and constitute as such one of the key elements of the Commission's initiative for a Budget Focused on Results (BFOR) which aims at making sure that resources are allocated to priorities and that every action delivers maximum performance and added value 8 . In addition, this will reduce the costs related to implementation of EU rules as well the number of errors. Simpler and more flexible EU financial rules are key in enhancing EU budget’s ability to adapt to changing circumstances and to respond to unexpected developments. The present legislative proposal forms an integral part of the mid-term review/revision of the multiannual financial framework (MFF) 2014-2020 9 . It contributes to two of its main objectives: simplification and flexibility . The Commission therefore proposes in a single act an ambitious revision of the general financial rules accompanied by corresponding changes to the sectorial financial rules set out in 15 legislative acts concerning multiannual programmes. The inclusion of sectoral changes in the same legislative proposal aims at ensuring a coherent negotiation process as well as at facilitating a speedy adoption by the legislator. The focus is put on the following key areas: 1 . Simplification for recipients of EU funds: many measures aim at simplifying life for recipients of EU funds. They relate to grants (removal of the non-cumulative award check for low-value grants and of the non-profit principle; simpler rules for "contribution in kind" valuation ; recognition of volunteer work ; grant awards without calls for proposal under specific conditions) and simplified forms of grants (Title VIII). 2 . From multi ple layers of controls to cross reliance on audit, assessment or authorisation, and harmonisation of reporting requirements: the aim of these measures is to encourage reliance as far as possible on one single audit, assessment or authorisation (conformity to State aids for instance), when the audit , assessment or authorisation meet s the necessary conditions to be taken into account in the EU system. More generally, rules for implementing partners (international organisations, EIB/EIF, national promotional banks, national agencies, NGOs) will be simplified by relying increasingly on their procedures and policies once assessed positively. Financial f ramework partnership agreements concluded with long term partners will allow progressing in the harmonisation of audit, reporting and other administrative requirements among donors (Title V Articles 122, 123 and 126). 3 . Allowing the application of only one set of rules to hybrid actions or in the case of combination of measures or instruments: the proposal aims at achieving further simplification for the partners of the EU by a number of measures to avoid the parallel application of different rules and procedures, notably through facilitating the combination of European Structural and Investment Funds (ESIF) funding with financial instruments and the European Fund for Strategic Investments (Title V). 4 . More effective use of financial instruments: optimise use of reflows, ensuring a level playing field among key EU implementing partners, reducing burdensome requirements related to publication of individual data of final recipients or to the exclusion criteria (Title X). 5 . More flexible budget management: the proposal sets out several ways for more budgetary flexibility, in order to allow the Union to respond to unforeseen challenges and new tasks more effectively and to achieve swifter crisis management - among which the creation of a " flexibility cushion" for unforeseen needs and new crises in the external actions geographic instruments budget , a more efficient activation of the solidarity and globalization adjustment funds, and the extension of Trust-Funds to internal policies (Articles 14 and 22 7 ) , the creation of a EU crisis reserve with the reuse of decommitted appropriations, and for the next Multiannual Financial Framework, the possibility that financial operations other than financial instruments generate a contingent liability for the Union exceeding the financial assets provided to cover the financial liability of the Union (Article 203) and the creation of a common provisioning fund holding the resources provisioned for financial operations (Article 2 05 ). R ecent initiatives (such as the European Fund for Strategic Investments (EFSI) or the European Fund for Sustainable Development (EFSD)), have indeed shown the need to fully use the leverage of the EU budget by creating non-provisioned contingent liabilities. Title X sets the framework to authorise, manage and control these financial risks. 6 . F ocus on results and streamlining of reporting: a stronger focus on results through lump sums, prizes, payment based on output and results rather than on reimbursement of costs, payment against conditions to be fulfilled (Article 121, Title X III ). This should contribute to further reducing the costs of implementing EU funds as well as the number of errors. On the reporting side, reports are regrouped around the draft budget and the integrated financial reporting package, in order to increase efficiency and transparency both towards the general public and the budgetary authority (Articles 39 and 23 9 -24 5 ). 7. Simpler and leaner EU administration: facilitating agreements or delegations between Institutions or bodies in order to pool the implementation of administrative appropriations in European Offices or within Executive Agencies (Articles 57, 58, 64, 65 and 6 8 ); merging consultative panels competent for financial irregularities (Article 73 (6)) with the EDES panel (Article 139 ) and moving from annual to multiannual financing decisions (Article 10 8 ). 8. Providing possibility for citizen engagement : t he proposal provides a possibility for citizens to be consulted on the implementation of the Union budget by the Commission, Member States and any other entity implementing the Union budget (А rticle 54 ) . In simplifying and making EU financial rules more flexible, the present proposal paves the way for the preparation of the next generation of spending programmes (post-2020).
Revised version (Article 53 Financial provisions):
1. In order to finance the coupled support, Member States may, by 1 August of the year preceding the first year of implementation of such support, decide to use up to 8 % of their annual national ceiling set out in Annex II. 2. By way of derogation from paragraph 1, Member States may decide to use up to 13 % of the annual national ceiling set out in Annex II, provided that: (a) until 31 December 2014: (i) they apply the single area payment scheme laid down in Title V of Regulation (EC) No 73/2009, (ii) they finance measures under Article 111 of that Regulation, or (iii) they are covered by the derogation provided for in Article 69(5) or, in the case of Malta, in Article 69(1) of that Regulation; and/or (b) they allocate, in total, during at least one year in the period 2010-2014, more than 5 % of their amount available for granting the direct payments provided for in Title III, Title IV, with the exception of Section 6 of Chapter 1 thereof, and Title V of Regulation (EC) No 73/2009 for financing: (i) the measures laid down in Section 2 of Chapter 2 of Title III of Regulation (EC) No 73/2009, (ii) the support provided for in subpoints (i) to (iv) of point (a) and in points (b) and (e) of Article 68(1) of that Regulation, or (iii) the measures under Chapter 1, with the exception of Section 6 of Title IV of that Regulation. 3. The percentages of the annual national ceiling referred to in paragraphs 1 and 2 may be increased by up to two percentage points for those Member States which decide to use at least 2 % of their annual national ceiling set out in Annex II to support the production of protein crops under this Chapter. 4. By way of derogation from paragraphs 1 and 2, Member States allocating, in total, during at least one year in the period 2010-2014, more than 10 % of their amount available for granting the direct payments provided for in Title III, Title IV, with the exception of Section 6 of Chapter 1 thereof, and Title V of Regulation (EC) No 73/2009 for financing: (b) the support provided for in subpoints (i) to (iv) of point (a) and in points (b) and (e) of Article 68(1) of that Regulation; or (c) the measures under Chapter 1, with the exception of Section 6, of Title IV of that Regulation may decide to use more than 13 % of the annual national ceiling set out in Annex II to this Regulation, upon approval by the Commission in accordance with Article 55 of this Regulation. 5. By way of derogation from the percentages set out in paragraphs 1 to 4, Member States may choose to use up to EUR 3 million per year for financing coupled support. 6. Member States may, by 1 August 2016, review their decision pursuant to paragraphs 1 to 4 and decide, with effect from 2017: (a) to leave unchanged, increase or decrease the percentage fixed pursuant to paragraphs 1, 2 and 3, within the limits laid down therein where applicable, or to leave unchanged or decrease the percentage fixed pursuant to paragraph 4; (b) to modify the conditions for granting the support; (c) to cease granting the support under this Chapter. 7. On the basis of the decision taken by each Member State pursuant to paragraphs 1 to 6 of this Article, the Commission shall adopt implementing acts fixing the corresponding ceilings for coupled support on a yearly basis. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 71(2).
Article 54 Notification
1. Member States shall notify the Commission of the decisions referred to in Article 53 by the dates referred to in that Article. Except for the decision referred to in point (c) of Article 53(6), the notification shall include information on the regions targeted, the selected types of farming or sectors, and the level of support to be granted. 2. The decisions referred to in Article 53(2) and (4), or, where appropriate, in point (a) of Article 53(6), shall include a detailed description of the particular situation in the region targeted and of the particular characteristics of the types of farming or specific agricultural sectors, which make the percentage referred to in Article 53(1) insufficient to address the difficulties referred to in Article 52(3) and which justify an increased level of support.
Article 55 Approval by the Commission
1. The Commission shall adopt implementing acts, without applying the procedure referred to in Article 71(2) or (3), approving the decision referred to in Article 53(4), or, where appropriate, in point (a) of Article 53(6), where one of the following needs in the sector or region concerned is demonstrated: (a) the need to sustain a certain level of specific production due to the lack of alternatives, and to reduce the risk of production abandonment with the resulting social and/or environmental problems; (b) the need to provide stable supply to the local processing industry, thereby avoiding the negative social and economic consequence of any ensuing restructuring; (c) the need to compensate disadvantages affecting farmers in a particular sector which are the consequence of continuing disturbances on the related market; (d) the need to intervene where the existence of any other support available under this Regulation, Regulation (EU) No 1305/2013 or any approved State aid scheme is deemed to be insufficient to meet the needs referred to in points (a), (b) and (c) of this paragraph. 2. The Commission shall adopt implementing acts laying down rules on the procedure for the assessment and approval of the decisions referred to in paragraph 1 of this Article. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 71(2).
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal This proposal aims at providing certainty and continuity in the granting of support to European farmers in the years 2019 and 2020 by adapting two legislative acts of the Common Agricultural Policy (CAP). In relation to rural development, certain amendments of Regulation (EU) No 1305/2013 (Rural Development Regulation) are needed to ensure the continuity of the policy in the final years of the programming period and a smooth passage to the next programming period. These amendments concern a new degressivity schedule for phasing out payments to areas facing natural constraints other than mountain areas (ANC) and the use of EAFRD technical assistance at the initiative of the Commission for actions preparing the implementation of the future CAP. In relation to direct payments, some of the provisions in Regulation (EU) No 1307/2013 (Direct Payment Regulation) do not cover calendar year 2020 since expenditure relating to calendar year 2020 is made in financial year 2021, which is the first year of the new Multiannual Financial Framework (MFF) 2021-2027. At the time of adoption of the Regulation, it was therefore not possible to make commitments relating to the future MFF. In the absence of an amendment of Regulation (EU) No 1307/2013, some Member States would face disruptive financial implications as regards direct payments in calendar year 2020, going beyond those related to the new MFF (MFF 2021-2027). Those Member States would be faced with important changes in their direct payments and rural development envelopes with considerable effects on the payments to farmers under both pillars. In addition, other technical elements are added, as they would facilitate implementation of the current legislative framework. Consistency with existing policy provisions in the policy area The proposed amendments are consistent with the Rural Development Regulation and Direct Payment Regulation, therefore the proposal is consistent with the existing policy provisions of the CAP. Consistency with other Union policies Not applicable

EUROPEAN COMMISSIONBrussels, 7.12.2018COM(2018) 817 final2018/0414(COD)Proposal for aREGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCILamending Regulations (EU) No 1305/2013 and (EU) No 1307/2013 as regards certain rules on direct payments and support for rural development in respect of the years 2019 and 2020EXPLANATORY MEMORANDUM1.CONTEXT OF THE PROPOSAL•Reasons for and objectives of the proposalThis proposal aims at providing certainty and continuity in the granting of support to European farmers in the years 2019 and 2020 by adapting two legislative acts of the Common Agricultural Policy (CAP).In relation to rural development, certain amendments of Regulation (EU) No 1305/2013 (Rural Development Regulation) are needed to ensure the continuity of the policy in the final years of the programming period and a smooth passage to the next programming period. These amendments concern a new degressivity schedule for phasing out payments to areas facing natural constraints other than mountain areas (ANC) and the use of EAFRD technical assistance at the initiative of the Commission for actions preparing the implementation of the future CAP.In relation to direct payments, some of the provisions in Regulation (EU) No 1307/2013 (Direct Payment Regulation) do not cover calendar year 2020 since expenditure relating to calendar year 2020 is made in financial year 2021, which is the first year of the new Multiannual Financial Framework (MFF) 2021-2027. At the time of adoption of the Regulation, it was therefore not possible to make commitments relating to the future MFF. In the absence of an amendment of Regulation (EU) No 1307/2013, some Member States would face disruptive financial implications as regards direct payments in calendar year 2020, going beyond those related to the new MFF (MFF 2021-2027). Those Member States would be faced with important changes in their direct payments and rural development envelopes with considerable effects on the payments to farmers under both pillars. In addition, other technical elements are added, as they would facilitate implementation of the current legislative framework.•Consistency with existing policy provisions in the policy areaThe proposed amendments are consistent with the Rural Development Regulation and Direct Payment Regulation, therefore the proposal is consistent with the existing policy provisions of the CAP.•Consistency with other Union policiesNot applicable2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY•Legal basisArticles 42 and 43(2) of the Treaty on the Functioning of the European Union (TFEU).•Subsidiarity (for non-exclusive competence)The TFEU provides that the competence for agriculture is shared between the Union and the Member States. The Union exercises its competence through the adoption of various legislative acts,thereby defining and implementing an EU common agricultural policy as provided for in Article 38 to 44 of the Treaty on the Functioning of the European Union. Regulations (EU) No 1305/2013 and (EU) No 1307/2013 set up a system forsupport for rural development and for direct payments to farmers. According to Article 39 of the TFEU, a treaty objective of the CAP is inter alia to ensure a fair standard of living for farmers and the proposed initiative fits within this objective. Accordingly, with the European Agricultural Guarantee Fund (EAGF), the CAP funds direct payments and Regulation EU (No) 1307/2013 regulates the payments at Union level. Rural development support is an integral part of the CAP and contributes to the CAP objectives as laid down in the Treaty on the Functioning of the European Union. The added value of the proposal is to ensure certainty and stability of direct income support for European farmers in the year 2020 and of support for rural development in the final years of the current programming period. These objectives can only be achieved through an amendment of Regulations (EU) No 1305/2013 and (EU) No 1307/2013 by the EU co-legislators.•ProportionalityThe proposal does not entail any new policy developments compared to the legislative acts it intends to amend. The proposal modifies the existing Regulations only to the extent necessary to achieve the objectives outlined above.•Choice of the instrumentSince the original legislative acts are regulations of the European Parliament and the Council, the amendments must also be introduced as a European Parliament and Council regulation by means of the ordinary legislative procedure.3.RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTSThe proposal deviates from standard practice as set out in the Better Regulation guidelines and in the Toolbox. A derogation to the standard practice is necessary for the following reasons:- the proposal is highly technical in its scope;- the initiative is confined to the final years of the current programming period;- it does not introduce new political commitments.An impact assessment, public consultation and a roadmap are therefore not suitable for this proposal. Moreover, as the legislation needs to be in place in 2019, adoption by the co-legislators is urgent.•Ex-post evaluations/fitness checks of existing legislationNot applicable•Stakeholder consultationsNot applicable•Collection and use of expertiseNot applicable•Impact assessmentNot applicable•Regulatory fitness and simplificationNot applicable•Fundamental rightsThe proposal respects the fundamental rights and observes the principles recognised in particular by the Charter of Fundamental Rights of the European Union.4.BUDGETARY IMPLICATIONSThe proposed option for Member States to continue the current flexibility between direct payments and rural development in calendar year 2020 (financial year 2021), and the transfer of the estimated product of reduction from direct payments to rural development in that year, may, subject to Member States’ decisions, affect the allocation between direct payments and rural development. However, any such transfer will be neutral in terms of overall budgetary commitments.Further details on the financial implications of the present proposal are provided in the financial statement attached to the proposal.5.OTHER ELEMENTS•Implementation plans and monitoring, evaluation and reporting arrangementsNot applicable•Explanatory documents (for directives)Not applicable•Detailed explanation of the specific provisions of the proposal·Rural developmentThe proposal makes it possible for the Member States to modify the degressivity schedule for payments to areas, which had received such payments in the previous programming period, while in the ongoing period, not being classified anymore as areas facing natural constraints other than mountain areas pursuant to Article 31(5) of Rural Development Regulation. This modification follows the extension of the deadline for the new delimitation of such areas to 2019 introduced by Regulation (EU) 2017/2393, which implies, by the end of the ongoing programming period, a shorter adaptation period for farmers who are no longer eligible for these payments. This modification would allow calculating transitional payments for the years 2019 and 2020 based on payment levels of the 2014-2020 period. Furthermore, the degressivity of the transitional payments shall be less steep as it shall be established by MS so that the end level is half of the starting level.The proposal extends the use of the technical assistance at the initiative of the Commission funded by the European Agricultural Fund for Rural Development (EAFRD) to actions related to the preparation of the future CAP. The proposal concerns exclusively the scope of technical assistance without modifying the financial support.·Flexibility between pillars in year 2020 and transfer of the product of reduction of direct payments to Rural developmentThe proposal includes provisions regarding the possibility for Member States to transfer funds between pillars in calendar year 2020 (corresponding to financial year 2021). For the period 2015-2019, Member States had the possibility to transfer amounts from direct payments to rural development and vice versa. Such flexibility for calendar year 2020/financial year 2021 is not laid out under the rules in force.This financial mechanism is an important mechanism for providing Member States with flexibility in managing their financial envelopes, and optimizing the use of available funds. Experience shows this mechanism has proven an effective tool for Member States and therefore certain Member States transfer a significant amount between the two pillars. An absence of flexibility between pillars in calendar year 2020/financial year 2021 would likely create serious financial disruptions for farmers in some Member States, as the effect on their envelopes could be significant. Accordingly, the proposal calls for a transfer between pillars to remain possible in calendar year 2020 under the same conditions as currently standing and that the estimated product of reduction continues to be transferred from direct payments to rural development.2018/0414 (COD)Proposal for aREGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCILamending Regulations (EU) No 1305/2013 and (EU) No 1307/2013 as regards certain rules on direct payments and support for rural development in respect of the years 2019 and 2020THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,Having regard to the Treaty on the Functioning of the European Union, and in particular Article 42 and Article 43(2) thereof,Having regard to the proposal from the European Commission,After transmission of the draft legislative act to the national parliaments,Having regard to the opinion of the European Economic and Social Committee1,Acting in accordance with the ordinary legislative procedure,Whereas:(1)Regulation (EU) No 1305/2013 of the European Parliament and of the Council2is the current legal framework for the support for rural development. It provides for support to areas facing natural constraints other than mountain areas. Taking into account the extension to 2019 of the deadline for the new delimitation of areas facing natural constraints other than mountain areas through Regulation (EU) 2017/2393 of the European Parliament and of the Council3and the shorter adaptation period for farmers who will no longer be eligible for payments, degressive transitional payments that only start in 2019 should start at no more than 80% of the average payments fixed in the 2014-2020 programming period. The payment level should be established in such a way that the end level in 2020 is half of the starting level.(2)In order to provide assistance to Member States and stakeholders for the timely preparation of the future Common Agricultural Policy (CAP) and to ensure a smooth passage to the next programming period, it should be clarified that it is possible to finance activities linked to the preparation of the future CAP through technical assistance at the initiative of the Commission.(3)Regulation (EU) No 1307/2013 of the European Parliament and of the Council4is the current legal framework for direct payments. While most of its provisions can apply as long as that Regulation remains in force, other provisions explicitly refer to calendar years 2015 to 2019 covered by the Multiannual Financial Framework 2014-2020. For some other provisions, their applicability beyond calendar year 2019 was not explicitly envisaged. In June 2018, the Commission has submitted a proposal for a new Regulation aiming to replace Regulation (EU) No 1307/2013, but only from 1 January 2021. Therefore, it is appropriate to proceed to some technical adjustments of Regulation (EU) No 1307/2013 so that it can be smoothly applied in calendar year 2020.(4)The obligation set out in Article 11 of Regulation (EU) No 1307/2013 to reduce the part of the amount of direct payments to be granted to a farmer for a given calendar year exceeding EUR 150 000 continues to apply as long as that Regulation is in force. However, currently, that Article only provides a notification obligation for Member States as regards their decisions and the estimated product of this reduction for years 2015 to 2019. With a view to ensuring a continuation of the existing system, it should be set out that Member States are also to notify their decisions concerning year 2020 and the estimated product of reduction for that year.(5)Flexibility between pillars is an optional transfer of funds between direct payments and rural development. Under current Article 14 of Regulation (EU) No 1307/2013, Member States may make use of this flexibility as regards calendar years 2014 to 2019. In order to ensure that Member States may keep their own strategy, the flexibility between pillars should be made available also for calendar year 2020, corresponding to financial year 2021.(6)As a consequence of the amendment of Article 14 of Regulation (EU) No 1307/2013 in respect of calendar year 2020, it is appropriate to adjust the references to that Article in the context of the obligation of the Member States to linearly reduce or increase the value of the payment entitlements due to fluctuations in the annual national ceiling resulting from their notifications of the application of flexibility between pillars.(7)Regulations (EU) No 1305/2013 and (EU) No 1307/2013 should therefore be amended accordingly.(8)In order to promptly provide the necessary flexibility to the Member States and to ensure the continuity of the rural development policy in the final years of the 2014-2020 programming period, this Regulation should apply from 1 March 2019,
Revised version (Article 55 Approval by the Commission):
(a) the need to sustain a certain level of specific production due to the lack of alternatives, and to reduce the risk of production abandonment with the resulting social and/or environmental problems; (b) the need to provide stable supply to the local processing industry, thereby avoiding the negative social and economic consequence of any ensuing restructuring; (c) the need to compensate disadvantages affecting farmers in a particular sector which are the consequence of continuing disturbances on the related market; (d) the need to intervene where the existence of any other support available under this Regulation, Regulation (EU) No 1305/2013 or any approved State aid scheme is deemed to be insufficient to meet the needs referred to in points (a), (b) and (c) of this paragraph. 2. The Commission shall adopt implementing acts laying down rules on the procedure for the assessment and approval of the decisions referred to in paragraph 1 of this Article. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 71(2).
Article 56 Scope
Aid shall be granted to farmers producing cotton falling within CN code 5201 00 under the conditions laid down in this Chapter ("crop-specific payment for cotton").
Article 57 Eligibility
1. The crop-specific payment for cotton shall be granted per hectare of eligible area of cotton. The area shall be eligible only if it is located on agricultural land authorised by the Member State for cotton production, sown with varieties authorised by the Member State and actually harvested under normal growing conditions. The crop-specific payment for cotton shall be paid for cotton of sound, fair and marketable quality. 2. Member States shall authorise the land and the varieties referred to in paragraph 1 in accordance with the rules and conditions to be adopted pursuant to paragraph 3. 3. In order to ensure an efficient management of the crop-specific payment for cotton, the Commission shall be empowered to adopt delegated acts in accordance with Article 70 concerning rules and conditions for the authorisation of land and varieties for the purposes of the crop-specific payment for cotton. 4. The Commission shall adopt implementing acts laying down rules on the procedure for the authorisation of land and varieties for the purposes of the crop-specific payment for cotton and on the notifications to the producers related to this authorisation. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 71(2).
Article 58 Base areas, fixed yields and reference amounts
1. The following national base areas are established: — Bulgaria: 3 342 ha, — Greece: 250 000 ha, — Spain: 48 000 ha, — Portugal: 360 ha. 2. The following fixed yields in the reference period are established: — Bulgaria: 1,2 tonne/ha, — Greece: 3,2 tonne/ha, — Spain: 3,5 tonne/ha, — Portugal: 2,2 tonne/ha. 3. The amount of the crop-specific payment per hectare of eligible area shall be calculated by multiplying the yields established in paragraph 2 with the following reference amounts: — Bulgaria: EUR 584,88 in 2015; and EUR 649,45 for 2016 and onwards, — Greece: EUR 234,18, — Spain: EUR 362,15, — Portugal: EUR 228,00. 4. If the eligible area of cotton in a given Member State and in a given year exceeds the base area established in paragraph 1, the amount referred to in paragraph 3 for that Member State shall be reduced proportionately to the overrun of the base area. 5. In order to make it possible to apply the crop-specific payment for cotton, the Commission shall be empowered to adopt delegated acts in accordance with Article 70 concerning rules on the conditions for the granting of that payment, on the eligibility requirements and on agronomic practices. 6. The Commission may adopt implementing acts laying down rules on the calculation of the reduction provided for in paragraph 4. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 71(2).
Article 59 Approved interbranch organisations
1. For the purpose of this Chapter, an 'approved interbranch organisation' means a legal entity made up of farmers producing cotton and at least one ginner, carrying out activities such as: (a) helping to better coordinate the way cotton is placed on the market, particularly through research studies and market surveys; (b) drawing up standard forms of contract compatible with Union rules; (c) orienting production towards products that are better adapted to market needs and consumer demand, particularly in terms of quality and consumer protection; (d) updating methods and means to improve product quality; (e) developing marketing strategies to promote cotton via quality certification schemes. 2. The Member State where the ginners are established shall approve interbranch organisations that satisfy the criteria to be laid down pursuant to paragraph 3. 3. In order to ensure the efficient application of the crop-specific payment for cotton, the Commission shall be empowered to adopt delegated acts in accordance with Article 70 laying down: (a) criteria for the approval of interbranch organisations; (b) obligations for producers; (c) rules governing the situation where the approved interbranch organisation does not satisfy the criteria referred to in point (a).
Article 60 Granting of the payment
1. Farmers shall be granted the crop-specific payment for cotton per eligible hectare as established in Article 58. 2. In the case of farmers who are members of an approved interbranch organisation, the crop-specific payment for cotton per eligible hectare within the base area laid down in Article 58(1) shall be increased by an amount of EUR 2.
Article 61 General rules
1. Member States may establish a scheme for small farmers in accordance with the conditions laid down in this Title ("small farmers scheme"). Farmers who, in 2015, hold owned or leased-in payment entitlements or, in Member States applying Article 36, claim for the single area payment scheme, and fulfil the minimum requirements provided for in Article 10(1) may opt to participate in the small farmers scheme. 2. Payments under the small farmers scheme shall replace the direct payments to be granted pursuant to Titles III and IV. The first subparagraph shall not apply where a Member State opts for the payment method laid down in point (a) of the first subparagraph of Article 63(2). In that case, the payment shall be subject to the respective conditions laid down in Titles III and IV, without prejudice to paragraph 3 of this Article. 3. Farmers participating in the small farmers scheme shall be exempted from the agricultural practices provided for in Chapter 3 of Title III. 4. No advantage provided for under this Title shall be granted in favour of farmers in respect of whom it is established that they artificially created, after 18 October 2011, the conditions to benefit from the small farmers scheme.
Article 62 Participation
1. Farmers wishing to participate in the small farmers scheme shall submit an application by a date to be fixed by Member States which shall not be later than 15 October 2015. The date fixed by Member States cannot, however, be earlier than the last day for submitting an application under the basic payment scheme or the single area payment scheme. Farmers who have not applied to participate in the small farmers scheme on the date fixed by the Member State, who decide to withdraw from it after that date or who have been selected for support under point (c) of Article 19(1) of Regulation (EU) No 1305/2013 shall no longer be entitled to participate in that scheme. 2. By way of derogation from paragraph 1, Member States may provide that farmers whose amount of direct payments under Titles III and IV is lower than the maximum amount fixed by the Member State in accordance with Article 63 are to be included in the small farmers scheme automatically, unless they expressly withdraw from it by the date fixed by the Member State in accordance with paragraph 1 or in any subsequent year. Member States making use of this possibility shall inform the relevant farmers in due time about their right to withdraw from the scheme. 3. Each Member State shall ensure that an estimate of the amount of the payment referred to in Article 63 is made known to farmers in due time before the date for submitting applications or for withdrawal fixed by that Member State.
Article 63 Amount of the payment
1. Member States shall set the amount of the annual payment for each farmer participating in the small farmers scheme at one of the following levels: (a) an amount not exceeding 25 % of the national average payment per beneficiary, which shall be established by the Member States on the basis of the national ceiling set out in Annex II for calendar year 2019 and the number of farmers who have declared eligible hectares, pursuant to Article 33(1) or Article 36(2), in 2015; (b) an amount corresponding to the national average payment per hectare multiplied by a figure corresponding to a number of hectares not exceeding five, to be set by the Member States. The national average payment per hectare shall be established by the Member States on the basis of the national ceiling set out in Annex II for calendar year 2019 and the number of eligible hectares declared in accordance with Article 33(1) or Article 36(2) in 2015. The amount referred to in points (a) or (b) of the first subparagraph shall not be lower than EUR 500 and shall not be higher than EUR 1 250 . Where the application of points (a) and (b) of the first subparagraph results in an amount lower than EUR 500 or higher than EUR 1 250 , the amount shall be rounded up or down, respectively, to that minimum or maximum amount. 2. By way of derogation from paragraph 1, a Member State may decide to grant participating farmers: (a) an amount equal to the total value of the direct payments to be allocated to the farmer each year under Titles III and IV; or (b) an amount equal to the total value of the direct payments to be allocated to the farmer in 2015 under Titles III and IV, that the Member State may adjust in subsequent years to proportionately take into account the changes in the national ceiling set out in Annex II. The amount referred to in point (a) or (b) of the first subparagraph shall not be higher than an amount fixed by that Member State which shall be between EUR 500 and EUR 1 250 . Where the application of point (a) or (b) of the first subparagraph results in an amount lower than EUR 500, the Member State concerned may decide to round up this amount to EUR 500. 3. By way of derogation from paragraphs 1 and 2, in Cyprus, Croatia, Malta and Slovenia, the amount referred to in those paragraphs may be set at a value lower than EUR 500, but not less than EUR 200 or, in the case of Malta, not less than EUR 50.
Article 64 Special conditions
1. During the participation in the small farmers scheme, farmers shall: (a) keep at least a number of eligible hectares corresponding to the number of owned or leased-in payment entitlements held, or to the number of eligible hectares declared in 2015 in accordance with Article 36(2); (b) fulfil the minimum requirement provided for in point (b) of Article 10(1). 2. Payment entitlements activated in 2015 pursuant to Articles 32 and 33 by a farmer participating in the small farmers scheme shall be considered to be activated entitlements for the duration of the farmer's participation in that scheme. The owned or leased-in payment entitlements held by the farmer during the participation in that scheme shall not be considered to be unused payment entitlements which are to revert to the national reserve or regional reserves in accordance with point (b) of Article 31(1). In Member States applying Article 36, the eligible hectares declared in 2015 in accordance with Article 36(2) by a farmer participating in the small farmers scheme shall be considered to be declared for the duration of the participation of the farmer in that scheme. 3. By way of derogation from Article 34, payment entitlements held by farmers participating in the small farmers scheme shall not be transferable, except in the case of inheritance or anticipated inheritance. Farmers who, by way of inheritance or anticipated inheritance, receive payment entitlements from a farmer participating in the small farmers scheme shall be eligible to participate in that scheme provided that they meet the requirements to benefit from the basic payment scheme and that they inherit all the payment entitlements held by the farmer from whom they receive the payment entitlements. 4. Where a Member State opts for the payment method laid down in point (a) of the first subparagraph of Article 63(2) without applying the third subparagraph of Article 63(2), paragraphs 1 and 2 as well as the first subparagraph of paragraph 3 of this Article shall not apply. 5. In order to ensure legal certainty, the Commission shall be empowered to adopt delegated acts in accordance with Article 70 setting out the conditions for participation in the scheme where the situation of the participating farmer has changed.
Article 65 Financial provisions
1. In order to finance the payment referred to in this Title, Member States shall deduct from the total amounts available for the respective payments the amounts to which the small farmers would be entitled: (a) under the basic payment scheme or the single area payment scheme referred to in Chapter 1 of Title III; (b) as a redistributive payment referred to in Chapter 2 of Title III; (c) as a payment for agricultural practices beneficial for the climate and the environment referred to in Chapter 3 of Title III; (d) as a payment for areas with natural constraints referred to in Chapter 4 of Title III; (e) as a payment for young farmers referred to in Chapter 5 of Title III; and (f) as coupled support referred to in Title IV. In the case of Member States having opted to calculate the amount of the payment pursuant to point (a) of the first subparagraph of Article 63(2), where the sum of those amounts for an individual farmer exceeds the maximum amount that they have fixed, each amount shall be proportionately reduced. 2. The difference between the sum of all payments due under the small farmers scheme and the total amount financed in accordance with paragraph 1 shall be financed in one or more of the following ways: (a) by applying Article 30(7) in the relevant year; (b) by using the funds for financing the payment for young farmers laid down in Chapter 5 of Title III which are left unused in the relevant year; (c) by applying a linear reduction to all payments to be granted in accordance with Articles 32 or 36. 3. Except where a Member State has opted to set the amount of the annual payment pursuant to point (a) of the first subparagraph of Article 63(2), the elements on the basis of which the amounts referred to in paragraph 1 of this Article are established shall remain the same for the entire duration of the participation of the farmer in the small farmers scheme. 4. If the total amount of payments due under the small farmers scheme exceeds 10 % of the annual national ceiling set out in Annex II, Member States shall apply a linear reduction to the amounts to be paid in accordance with this Title in order to respect that percentage, unless they have set the amount of the payment in accordance with point (a) of the first subparagraph of Article 63(2) without applying the third subparagraph of Article 63(2). The same exception applies for Member States which have set the amount of the payment in accordance with point (b) of the first subparagraph of Article 63(2) without applying the third subparagraph of Article 63(2), whose national ceiling set out in Annex II for year 2019 is higher than for year 2015 and which apply the calculation method set out in Article 25(1) or in Article 36(2).
Article 66 Use of the annual budget for the restructuring programmes
1. For Member States which have applied the first subparagraph of Article 4(1) of Regulation (EC) No 637/2008, the relevant annual budget available pursuant to Article 5(1) of that Regulation shall be transferred with effect from 1 January 2014 and shall constitute additional Union funds for measures under rural development programming financed under Regulation (EU) No 1305/2013. 2. For Member States which have applied the second subparagraph of Article 4(1) of Regulation (EC) No 637/2008, the relevant annual budget available pursuant to Article 5(1) of that Regulation shall be included with effect from 1 January 2017 in their national ceilings as set out in Annex II to this Regulation.
Article 67 Notification requirements
1. In order to ensure the correct application of the rules set out in this Regulation, the Commission shall be empowered to adopt delegated acts in accordance with Article 70 on the necessary measures regarding notifications to be made by Member States to the Commission for the purposes of this Regulation, for the purpose of checking, controlling, monitoring, evaluating and auditing direct payments or for the purpose of complying with requirements laid down in international agreements which have been concluded by a Council decision, including notification requirements under those agreements. In so doing, the Commission shall take into account the data needs and synergies between potential data sources. Where appropriate, the information obtained may be transmitted or be made available to international organisations and the competent authorities of third countries and may be made public, subject to the protection of personal data and the legitimate interest of undertakings in the protection of their business secrets. 2. In order to make notifications referred to in paragraph 1 fast, efficient, accurate and cost-effective, the Commission shall be empowered to adopt delegated acts in accordance with Article 70 laying down further rules on: (a) the nature and type of the information to be notified; (b) the categories of data to be processed and maximum retention periods; (c) access rights to the information or information systems made available; (d) the conditions of publication of the information. 3. The Commission shall adopt implementing acts laying down: (a) the methods of notification; (b) rules on providing the information necessary for the application of this Article; (c) arrangements for the management of the information to be notified, as well as rules on content, form, timing, frequency and deadlines of the notifications; (d) arrangements for transmitting, or making information and documents available, to the Member States, international organisations, the competent authorities in third countries, or the public, subject to the protection of personal data and the legitimate interest of farmers and undertakings in the protection of their business secrets. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 71(2).
Article 68 Processing and protection of personal data
1. Member States and the Commission shall collect personal data for the purposes set out in Article 67(1). They shall not process this data in a way that is incompatible with those purposes. 2. Where personal data are processed for monitoring and evaluation purposes as referred to in Article 67(1), they shall be made anonymous and processed in aggregated form only. 3. Personal data shall be processed in accordance with Directive 95/46/EC and Regulation (EC) No 45/2001. In particular, such data shall not be stored in a form which permits identification of data subjects for longer than is necessary for the purposes for which they were collected or for which they are further processed, taking into account the minimum retention periods laid down in the applicable national and Union law. 4. Member States shall inform the data subjects that their personal data may be processed by national and Union bodies in accordance with paragraph 1, and that in this respect they enjoy the rights set out in Directive 95/46/EC and Regulation (EC) No 45/2001, respectively. 5. This Article shall be subject to Articles 111 to 114 of Regulation (EU) No 1306/2013.
Article 69 Measures to resolve specific problems
1. In order to resolve specific problems, the Commission shall adopt implementing acts which are both necessary and justifiable in an emergency. Such implementing acts may derogate from provisions of this Regulation, to the extent and for such a period as is strictly necessary. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 71(2). 2. Where duly justified imperative grounds of urgency so require, and in order to resolve such specific problems while ensuring the continuity of the direct payments system in the case of extraordinary circumstances, the Commission shall adopt immediately applicable implementing acts in accordance with the procedure referred to in Article 71(3). 3. Measures adopted under paragraph 1 or 2 shall remain in force for a period not exceeding twelve months. If after this period the specific problems referred to in those paragraphs persist, the Commission may, in order to establish a permanent solution, submit an appropriate legislative proposal. 4. The Commission shall inform the European Parliament and the Council of any measure adopted under paragraph 1 or 2 within two working days of its adoption.
Article 70 Exercise of the delegation
1. The power to adopt the delegated acts is conferred on the Commission subject to the conditions laid down in this Article. 2. The power to adopt delegated acts referred to in Article 2, Article 4(3), Article 6(3), Article 7(3), Article 8(3), Article 9(5), Article 20(6), Article 35, Article 36(6), Article 39(3), Article 43(12), Article 44(5), Article 45(5) and (6), Article 46(9), Article 50(11), Article 52(9), Article 57(3), Article 58(5), Article 59(3), Article 64(5), Article 67(1) and (2) and Article 73 shall be conferred on the Commission for a period of seven years from 1 January 2014. The Commission shall draw up a report in respect of the delegation of power not later than nine months before the end of the seven-year period. The delegation of power shall be tacitly extended for periods of an identical duration, unless the European Parliament or the Council opposes such extension not later than three months before the end of each period. 3. The delegation of power referred to in Article 2, Article 4(3), Article 6(3), Article 7(3), Article 8(3), Article 9(5), Article 20(6), Article 35, Article 36(6), Article 39(3), Article 43(12), Article 44(5), Article 45(5) and (6), Article 46(9), Article 50(11), Article 52(9), Article 57(3), Article 58(5), Article 59(3), Article 64(5), Article 67(1) and (2) and Article 73 may be revoked at any time by the European Parliament or by the Council. A decision to revoke shall put an end to the delegation of the power specified in that decision. It shall take effect the day following the publication of the decision in the Official Journal of the European Union or at a later date specified therein. It shall not affect the validity of any delegated acts already in force. 4. As soon as it adopts a delegated act, the Commission shall notify it simultaneously to the European Parliament and to the Council. 5. A delegated act adopted pursuant to Article 2, Article 4(3), Article 6(3), Article 7(3), Article 8(3), Article 9(5), Article 20(6), Article 35, Article 36(6), Article 39(3), Article 43(12), Article 44(5), Article 45(5) and (6), Article 46(9), Article 50(11), Article 52(9), Article 57(3), Article 58(5), Article 59(3), Article 64(5), Article 67(1) and (2) and Article 73 shall enter into force only if no objection has been expressed either by the European Parliament or the Council within a period of two months of notification of that act to the European Parliament and the Council or if, before the expiry of that period, the European Parliament and the Council have both informed the Commission that they will not object. That period shall be extended by two months at the initiative of the European Parliament or of the Council.
Article 71 Committee procedure
1. The Commission shall be assisted by a Committee called the "Committee for Direct Payments". That Committee shall be a committee within the meaning of Regulation (EU) No 182/2011. 2. Where reference is made to this paragraph, Article 5 of Regulation (EU) No 182/2011 shall apply. In the case of acts referred to in Article 24(11), Article 31(2) and Article 67(3), where the committee delivers no opinion, the Commission shall not adopt the draft implementing act and the third subparagraph of Article 5(4) of Regulation (EU) No 182/2011 shall apply. 3. Where reference is made to this paragraph, Article 8 of Regulation (EU) No 182/2011, in conjunction with Article 5 thereof, shall apply.
Article 72 Repeals
1. Regulation (EC) No 637/2008 is repealed with effect from 1 January 2014. However, it shall continue to apply until 31 December 2017 in respect of Member States which have exercised the option laid down in the second subparagraph of Article 4(1) of that Regulation. 2. Regulation (EC) No 73/2009 is repealed. However, it shall continue to apply in respect of aid applications relating to claim years starting before 1 January 2015. Without prejudice to paragraph 3, references to the repealed Regulation shall be construed as references to this Regulation or Regulation (EU) No 1306/2013 and shall be read in accordance with the correlation table set out in Annex XI to this Regulation. 3. The references made in this Regulation to Regulations (EC) No 73/2009 and (EC) No 1782/2003 shall be understood as being made to those Regulations such as they were in force before their repeal.
Article 73 Transitional rules
In order to ensure a smooth transition from the arrangements provided for in Regulation (EC) No 73/2009 to those laid down in this Regulation, the Commission shall be empowered to adopt delegated acts in accordance with Article 70 concerning the necessary measures to protect any acquired rights and legitimate expectations of farmers.
Article 74 Entry into force and application
This Regulation shall enter into force on the day of its publication in the Official Journal of the European Union. It shall apply from 1 January 2015. However, Article 8, Article 9(6), Article 11(6), Article 14, Article 16, Article 21(2) and (3), Article 22(2), the first subparagraph of Article 23(1), Article 23(6), Article 24(10), Article 29, the first subparagraph of Article 36(1), Article 41(1), Article 42(1), Article 43(8) and (13), the fifth subparagraph of Article 45(2), Article 46(2) and (8), Article 49(1), Article 51(1), Article 53, Article 54, Article 66(1), Articles 67 and 70 and Article 72(1) shall apply from the date of entry into force of this Regulation. This Regulation shall be binding in its entirety and directly applicable in all Member States.