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IP/11/476

Brussels, 15 April 2011

Commission to recover 530 million of CAP expenditure from the Member States

A total of € 530 million of EU agricultural policy funds unduly spent by Member States is being claimed back by the European Commission today under the so-called clearance of accounts procedure. This money returns to the EU budget because of non-compliance with EU rules or inadequate control procedures on agricultural expenditure. Member States are responsible for paying out and checking expenditure under the Common Agricultural Policy (CAP), and the Commission is required to ensure that Member States have made correct use of the funds.

Main financial corrections

Under this latest decision, funds will be recovered from Bulgaria, Denmark, Greece, Spain, France, Italy, the Netherlands, Portugal, Romania and United Kingdom while there is a small reimbursement made to Germany. The most significant individual corrections are:

  • € 137.23 million charged to Greece for ineligible expenditure and major shortcomings in the olive cultivation Geographical Information System (GIS) and on-the-spot controls;

  • € 122.38 million charged to Greece with regard to insufficient on-the-spot checks and deficiencies in the Land Parcel Identification System (LPIS-GIS) and in administrative cross-checks for area aid (also relates to area based Rural Development measures);

  • € 74.9 million charged to Romania for the weaknesses in the LPIS-GIS relating to administrative cross-checks, provision of inaccurate information to farmers and ineffective on-the-spot verification with regard to area aid (also relates to area based Rural Development measures);

  • € 70.96 million charged to Spain for incorrect technical tolerances applied, deficiencies in the checks on yields and incorrect application of penalties for delays in submitting the crop declarations with regard to olive oil;

  • € 37.25 million charged to Spain with regard to ineligible costs for environmental management of packaging and ineligible expenditure with regard to fruit and vegetables;

  • € 26.95 million charged to United Kingdom with regard to weaknesses in the recognition of Producer Organisations and related weaknesses and deficiencies in verifying the Value of Marketed Production in the area of fruit and vegetables;

  • € 24.54 million charged to Bulgaria for insufficient levels of on-the-spot checks, weaknesses in the LPIS-GIS and provision of inaccurate information and insufficient guidance to farmers with regard to area aid (also relates to area based Rural Development measures);

  • € 22.69 million charged to the Netherlands for ineligible costs for printing on packages and ineligible expenditure by a producer organisation with decentralised marketing in respect of fruit and vegetables.

Member States are responsible for managing most CAP payments, mainly via their paying agencies. They are also in charge of controls, for example verifying farmer's claims for direct payments. The Commission carries out over 100 audits every year, verifying that Member State controls and responses to shortcomings are sufficient, and has the power to claw back funds in arrears if the audits show that Member State responses are not good enough to guarantee that EU funds have been spent properly.

The financial correction is proportional with the rate of error. The decision comes after a conciliation process between the Commission and Member States on the basis of objective data on the ground and the risk of misuse of funds.

For details on how the clearance of annual accounts system works, see MEMO/06/178 and the factsheet "Managing the agriculture budget wisely", available on the internet at: http://ec.europa.eu/agriculture/fin/clearance/factsheet_en.pdf.

Details of the individual corrections, by Member State and by sector, are given in the tables attached (annexes I and II).

Annex I

Clearance of accounts of EAGF and EAFRD

Decision 35: Corrections by Member state

Sector and reason for correction

Amount in million EUR

Bulgaria

 

Area Aid - correction proposed for financial year 2009 with regard to the insufficient level of on-the-spot checks and weaknesses in the LPIS-GIS relating to non-conclusive administrative cross-checks and provision of inaccurate information and insufficient guidance to farmers (also relates to area based Rural Development measures).

24.543

Denmark

 

Fruit and vegetables - correction proposed for financial years 2007 and 2008 for not carrying out the necessary administrative and on-the-spot checks by sampling prior to granting payment.

0.063

Dried Fodder and Seeds - correction proposed for financial years 2005-2008 with regard to insufficient additional checks on operators.

0.120

France

 

Area Aid - correction proposed for financial years 2007-2009 with regard to the incorrect calculation of the payments, reductions and exclusions thus leading to overpayments.

2.326

Germany

 

Other corrections - reimbursement concerning an irregularity case based on the 50/50 rule of Article 32(5) of Council Regulation (EC) No 1290/2005.

-0.508

Greece

 

Area Aid - correction proposed for financial years 2007-2009 with regard to insufficient on-the-spot checks and deficiencies in the LPIS-GIS and in administrative cross-checks (also relates to area based Rural Development measures).

122.378

Olive oil and other oils and fats - correction proposed for financial years 2004-2006 with regard to ineligibility of expenditure and major shortcomings in the olive cultivation GIS and on-the-spot controls.

137.231

Italy

 

Intervention Storage - correction proposed for financial years 2005-2009 with regard to incorrect booking of sugar intake in 2005, absence of control of 35% increase in storage costs and late performance of the inventory controls.

2.078

Portugal

 

Livestock Premiums - correction proposed for financial years 2007 and 2008 with regard to error identified in the IT software managing the suckler cow premium scheme.

0.720

Romania

 

Area Aid - correction proposed for financial year 2009 with regard to weaknesses in the LPIS-GIS relating to the administrative cross-checks, provision of inaccurate information to farmers and ineffective on-the-spot verification (also relates to area based Rural Development measures).

74.899

Spain

 

Fruit and vegetables - correction proposed for financial years 2006-2008 with regard to ineligible costs for environmental management of packages and various categories of ineligible expenditure paid.

37.253

Livestock Premiums - correction proposed for financial years 2004-2006 with regard to the late start, low rate and poor quality of on-the-spot checks in respect of animal premia..

7.630

Olive oil and other oils and fats - correction proposed for financial years 2003-2006 with regard to incorrect technical tolerances applied, deficiencies in the checks on yields and incorrect application of penalties for delays in submitting crop declarations,.

70.961

The Netherlands

 

Fruit and vegetables - correction proposed for financial years 2006-2008 with regard to ineligible costs for printing on packages and ineligible expenditure of a producer organisation with decentralised marketing.

22.691

United Kingdom

 

Export refunds - correction proposed for financial years 2006-2009 with regard to the inadequate implementation of control on certification of exit from EU.

0.008

Fruit and vegetables - correction proposed for financial years 2006-2008 with regard to Producer Organisation recognition related weaknesses and deficiencies in verifying the Value of Marketed Production.

26.947

Intervention Storage - correction proposed for financial year 2009 with regard to rendering and transport costs unduly charged to the EU budget and dead animals claimed for EU financing.

0.284

TOTAL

529.625

Annex II

Clearance of accounts of EAGF and EAFRD

Decision 35: Corrections by Sector

In Million €

Export refunds

0.008

 

 

Fruit & vegetables

86.955

Intervention Storage

2.362

Livestock Premiums

8.350

Area Aid

224.145

Olive oil and other oils and fats

208.193

Dried fodder and seeds

0.120

 

 

Other corrections

-0.508

TOTAL

529.625


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