IP/06/1320

Brussels, 5 October 2006

Commission to recover € 317.3 million in CAP expenditure from the Member States

A total of € 317.3 million of EU farm money unduly spent by Member States is to be claimed back, following a decision adopted by the European Commission. The money will be recovered because of inadequate recovery procedures in the Member States concerned. National authorities are responsible for paying out, checking expenditure, and for the recovery of unduly paid amounts under the Common Agricultural Policy (CAP). The Commission is required to ensure that Member States recover irregularly paid amounts. The recoveries in this decision relate to irregularities communicated by the Member States in the period prior to 1 January 1999.

Commenting on the decision, Mariann Fischer Boel, Commissioner for Agriculture and Rural Development, said: “We have been working very hard to ensure the best possible control over farm spending. This latest decision is the result of painstaking work in cases where we are not satisfied with the way Member States have recovered incorrectly spent money. I think this sends a clear signal of how serious we are. We will continue to insist on the highest possible standards.”

Vice-President Siim Kallas, Commissioner in charge of Administrative affairs, audit and anti-fraud, added: "The Commission is serious about not tolerating irregular spending of the EU taxpayer's money. We have sound systems in place to detect such cases, and when one is discovered it will be followed up, even if this may take some time. Even a case of outright fraud may not necessarily lead to a loss of money. The joint Task force has done essential work, and today's decision is vital for a credible protection of the EU's financial interests."

Main financial corrections

Under this decision, funds will be recovered from Italy, Germany, Spain, France, and the United Kingdom. The corrections relate to irregularly paid amounts that should have been recovered by the Member States concerned. Normally, the financial consequences of irregularities that cannot be recovered are borne by the Community budget. However, in these cases, the Commission considers the Member States to have applied the recovery procedure negligently and therefore the Member States have to bear the costs of the non-recovery.

It concerns the following amounts per Member State:

• € 310.8 million charged to Italy;
• € 2.4 million charged to Spain;
• € 2.0 million charged to the United Kingdom;
• € 1.3 million charged to France;
• € 0.6 million charged to Germany.

This recovery procedure relates to irregularities communicated by Member States before 1 January 1999. They result from the work of the Taskforce Recovery set up in 2002 by the Commission’s Directorate-General for Agriculture and OLAF to evaluate the recovery procedures for this period. The usual recovery decisions are based on audits of the Member States’ control systems. In this case, the Commission has investigated the recovery procedures for individual payments to individual farmers and traders.

The audit of recovery procedures also led to the conclusion that 176.3 million € should be written off at the cost of the Community budget as the non-recovery was not due to negligence from the Member States.

At the same time the audit revealed that Member States had not sent up to date information to the Commission concerning a substantial number of recovery procedures. Some debts had been recovered already, in other cases it appeared that the amount had been paid regularly to the beneficiaries and in other cases the same recovery procedure had been notified several times. Therefore, the Commission can now strike 144 cases off its debts register for an amount of 402.5 million €.

For details on how the clearance of annual accounts system works, see MEMO/06/178.