TITLE IV FINANCIAL MANAGEMENT OF THE FUNDS
CHAPTER I EAGF
Section 1 Financing of expenditure
Article 16Budget ceiling
1.The annual ceiling for EAGF expenditure shall be constituted by the maximum amounts set for it under Regulation (EU, Euratom) No 1311/2013.
2.In the event that Union law provides for sums to be deducted from or added to the amounts referred to in paragraph 1, the Commission shall adopt implementing acts without applying the procedure referred to in Article 116, setting the net balance available for EAGF expenditure on the basis of the data referred to in Union law.
Article 17Monthly payments
1.The appropriations necessary to finance the expenditure referred to in Article 4(1) shall be made available to Member States by the Commission in the form of monthly payments, on the basis of the expenditure effected by the accredited paying agencies during a reference period.
2.Until transfer of the monthly payments by the Commission, the resources required to undertake expenditure shall be mobilised by the Member States according to the needs of their accredited paying agencies.
Article 18Procedure for monthly payments
1.Without prejudice to the application of Articles 51 and 52, monthly payments shall be made by the Commission for expenditure effected by accredited paying agencies during the reference month.
2.Monthly payments shall be made to each Member State at the latest on the third working day of the second month following that in which the expenditure is effected. Expenditure effected by Member States between 1 and 15 October shall count as having been made in the month of October. Expenditure effected between 16 and 31 October shall count as having been made in the month of November.
3.The Commission shall adopt implementing acts determining the monthly payments which it makes on the basis of a declaration of expenditure from the Member States and the information supplied in accordance with Article 102(1), taking account of reductions or suspensions applied under Article 41 or any other corrections. Those implementing acts shall be adopted in accordance with the advisory procedure referred to in Article 116(2).
4.The Commission may adopt, implementing acts without applying the procedure referred to in Article 116, determining supplementary payments or deductions. In such cases, the committee referred to in Article 116(1) shall be informed at its next meeting.
Article 19Administrative and personnel costs
Expenditure relating to administrative and personnel costs effected by Member States and by beneficiaries of aid from the EAGF shall not be borne by the Fund.
Article 20Public intervention expenditure
1.Where, within the framework of the common organisation of the markets, a sum per unit is not determined in respect of a public intervention, the EAGF shall finance the measure concerned on the basis of standard amounts uniform throughout the Union, in particular as regards funds originating in the Member States used for buying-in products, for material operations arising from storage and, where appropriate, for the processing of intervention products.
2.In order to ensure the funding by the EAGF of the public intervention expenditure the Commission shall be empowered to adopt delegated acts in accordance with Article 115 concerning:
(a)the type of measures eligible for Union financing and the reimbursement conditions;
(b)the eligibility conditions and calculation methods based on the information actually observed by the paying agencies or based on flat-rates determined by the Commission, or based on flat-rate or non-flat-rate amounts provided for by the sectoral agricultural legislation.
3.In order to ensure the proper management of the appropriations entered in the Union's budget for the EAGF, the Commission shall be empowered to adopt delegated acts in accordance with Article 115, laying down rules on the valuation of operations in connection with public intervention, the measures to be taken in the case of loss or deterioration of products under the public intervention, and on the determination of the amounts to be financed.
4.The Commission shall adopt implementing acts, fixing the amounts referred to in paragraph 1. Those implementing acts shall be adopted in accordance with the advisory procedure referred to in Article 116(2).
Article 21Acquisition of satellite images
The list of the satellite images required for checks shall be agreed by the Commission and the Member States in accordance with the specification prepared by each Member State.
The Commission shall supply those satellite images free of charge to the control bodies or to suppliers of services authorised by those bodies to represent them.
The Commission shall remain the owner of the satellite images and shall recover them on completion of the work. It may also provide that work be carried out on enhancing techniques and working methods in connection with the inspection of agricultural areas by remote sensing.
Article 22Monitoring of agricultural resources
The measures financed pursuant to point (c) of Article 6 shall aim to give the Commission the means to:
(a)
manage Union agricultural markets in a global context;
(b)
ensure agri-economic and agri-environmental monitoring of agricultural land, including agro-forestry, and monitoring of the condition of crops so as to enable estimates to be made, in particular as regards yields and agricultural production;
(c)
share the access to such estimates in an international context, such as those initiatives coordinated by United Nations organisations or other international agencies;
(d)
contribute to transparency of world markets; and
(e)
ensure technological follow-up of the agri-meteorological system.
The measures financed pursuant to point (c) of Article 6 concern the collection or purchase of data needed to implement and monitor the CAP, including satellite data and meteorological data, the creation of a spatial data infrastructure and a website, the carrying out of specific studies on climatic conditions, remote sensing used to assist in the monitoring of soil health and the updating of agri-meteorological and econometric models. Where necessary, those measures shall be carried out in collaboration with national laboratories and bodies.
Article 23Implementing powers
The Commission may adopt implementing acts, laying down:
(a)
rules relating to the financing pursuant to points (b) and (c) of Article 6,
(b)
the procedure under which the measures referred to in Articles 21 and 22 shall be carried out in order to meet the objectives assigned,
(c)
the framework governing the acquisition, enhancing and utilisation of satellite images and meteorological data, and the applicable deadlines.
Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 116(3).
Section 2 Budget discipline
Article 24Compliance with the ceiling
1.Throughout the budget procedure and the implementation of the budget, appropriations relating to EAGF expenditure shall not exceed the amount referred to in Article 16.
All legislative instruments proposed by the Commission and adopted by the European Parliament and the Council, the Council or the Commission and that have an influence on the EAGF budget shall comply with the amount referred to in Article 16.
2.Where Union law provides for a financial ceiling in euro for agricultural expenditure in respect of a Member State, such expenditure shall be reimbursed subject to that limit set in euro, and, where Article 41 applies, with any necessary adjustments.
3.National ceilings for direct payments referred to in Article 7 of Regulation (EU) No 1307/2013, corrected by the adjustments laid down in Article 26 of this Regulation, shall be deemed to be financial ceilings in euro.
Article 25Reserve for crises in the agricultural sector
A reserve intended to provide additional support for the agricultural sector in the case of major crises affecting the agricultural production or distribution ("the reserve for crises in the agricultural sector") shall be established by applying, at the beginning of each year, a reduction to direct payments with the financial discipline mechanism referred to in Article 26.
The total amount of the reserve shall be EUR 2 800 million with equal annual instalments of EUR 400 million (at 2011 prices) for the period 2014-2020 and shall be included under Heading 2 of the Multiannual Financial Framework as set out in the Annex to Regulation (EU, Euratom) No 1311/2013.
Article 26Financial discipline
1.In order to ensure that the annual ceilings set out in Regulation (EU, Euratom) No 1311/2013 for the financing of the market related expenditure and direct payments are respected, an adjustment rate for direct payments ("the adjustment rate") shall be determined when the forecasts for the financing of the measures financed under that sub-ceiling for a given financial year indicate that the applicable annual ceilings will be exceeded.
2.The Commission shall present a proposal to the European Parliament and to the Council concerning the adjustment rate no later than 31 March of the calendar year in respect of which that adjustment rate applies.
3.If in any year the adjustment rate has not been set by the European Parliament and the Council by 30 June, the Commission shall adopt implementing acts fixing the adjustment rate and shall inform the European Parliament and the Council immediately thereof. Such implementing acts shall be adopted in accordance with the advisory procedure referred to in Article 116(2).
4.Until 1 December, the Commission may, on the basis of new information in its possession, adopt implementing acts adapting the adjustment rate set in accordance with paragraphs 2 or 3. Those implementing acts shall be adopted in accordance with the advisory procedure referred to in Article 116(2).
5.By way of derogation from the fourth subparagraph of Article 169(3) of Regulation (EU, Euratom) No 966/2012, Member States shall reimburse the appropriations carried over in accordance with Article 169(3) of Regulation (EU, Euratom) No 966/2012 to the final recipients who are subject, in the financial year to which the appropriations are carried over, to the adjustment rate.
The reimbursement referred to in the first subparagraph shall only apply to final beneficiaries in those Member States where financial discipline applied in the preceding financial year.
6.The Commission may adopt implementing acts, laying down the terms and conditions applicable to appropriations carried over in accordance with Article 169(3) of Regulation (EU, Euratom) No 966/2012 in order to finance the expenditure referred to in Article 4(1)(b) of this Regulation. Those implementing acts shall be adopted in accordance with the advisory procedure referred to in Article 116(2).
7.When applying this Article, the amount of the reserve for crises in the agricultural sector referred to in Article 25 shall be included in the determination of the adjustment rate. Any amount not made available for crisis measures by the end of the financial year shall be disbursed in accordance with paragraph 5 of this Article.
Article 27Budget discipline procedure
1.The Commission shall present to the European Parliament and to the Council, at the same time as the draft budget for financial year N, its forecasts for financial years N - 1, N and N + 1.
2.If, on drawing up the draft budget for financial year N, there appears to be a risk that the amount referred to in Article 16 for financial year N will be exceeded, the Commission shall propose to the European Parliament and to the Council or to the Council, the measures necessary to ensure compliance with that amount.
3.At any time, if the Commission considers that there is a risk that the amount referred to in Article 16 will be exceeded and that it cannot take adequate measures to remedy the situation under its powers, it shall propose other measures to ensure compliance with that amount. Those measures are adopted by the Council where the legal basis of the relevant measure is Article 43(3) TFEU or by the European Parliament and the Council where the legal basis of the relevant measure is Article 43(2) TFEU.
4.If, at the end of financial year N, reimbursement requests from the Member States exceed or are likely to exceed the amount referred to in Article 16, the Commission shall:
(a)consider the requests presented by Member States pro rata and within the limit of the available budget, and shall, adopt implementing acts, setting provisionally the amount of the payments for the month concerned;
(b)determine, for all Member States, at the latest by 28 February of financial year N + 1, their situation with regard to Union financing for the financial year N;
(c)adopt implementing acts setting the total amount of Union financing broken down by Member State, on the basis of a single rate of Union financing, within the limit of the budget which was available for the monthly payments;
(d)effect, at the latest when the monthly payments are made for March of year N+1, any compensation to be carried out with respect to Member States.
The implementing acts provided for in points (a) and (c) of the first subparagraph shall be adopted in accordance with the advisory procedure referred to in Article 116(2).
Article 28Early-warning and monitoring system
In order to ensure that the budget ceiling referred to in Article 16 is not exceeded, the Commission shall implement a monthly early-warning and monitoring system in respect of EAGF expenditure.
To that end, at the beginning of each financial year, the Commission shall determine monthly expenditure profiles based, where appropriate, on average monthly expenditure during the previous three years.
The Commission shall periodically present to the European Parliament and to the Council a report examining the development of expenditure effected in relation to the profiles and containing an assessment of the forecasted implementation for the current financial year.
Article 29Reference exchange rates
1.When adopting the draft budget, or a letter of amendment to the draft budget which concerns agricultural expenditure, the Commission shall use for EAGF budget estimates the average euro/US dollar exchange rate recorded on the market during the latest quarter ending at least 20 days before adoption of the budget document by the Commission.
2.When adopting a draft amending and supplementary budget or a letter of amendment thereto, the Commission shall, in so far as those documents concern appropriations relating to the measures referred to in point (a) of Article 4(1), use:
(a)the average euro/US dollar exchange rate actually recorded on the market from 1 August of the previous financial year until the end of the latest quarter ending at least 20 days before adoption of the budget document by the Commission and at the latest on 31 July of the current financial year, and
(b)the average exchange rate actually recorded during the latest quarter ending at least 20 days before adoption of the budget document by the Commission, as a forecast for the remainder of the financial year.
CHAPTER II EAFRD
Section 1 General provisions for eafrd
Article 30No double funding
Expenditure financed under the EAFRD shall not be the subject of any other financing under the Union's budget.
Article 31Provisions applying to all payments
1.In accordance with Article 77(1) of Regulation (EU) No 1303/2013 payments by the Commission of the EAFRD contribution as referred to in Article 5 of this Regulation shall not exceed the budget commitments.
Those payments shall be assigned to the earliest open budget commitment
2.Article 84 of Regulation (EU, Euratom) No 966/2012 shall apply.
Section 2 Financing of rural development programmes
Article 32Financial contribution from the EAFRD
The financial contribution from the EAFRD towards expenditure under rural development programmes shall be determined for each programme, within the ceilings established by Union law concerning support for rural development by the EAFRD.
Article 33Budget commitments
As regards the Union's budget commitments for rural development programmes, Article 76 of Regulation (EU) No 1303/2013 shall apply.
Section 3 Financial contribution to rural development programmes
Article 34Provisions applying to payments for rural development programmes
1.The appropriations necessary to finance the expenditure referred to in Article 5 shall be made available to Member States in the form of prefinancing, interim payments and the payment of a balance, as described in this Section.
2.The combined total of prefinancing and interim payments shall not exceed 95 % of the EAFRD's contribution to each rural development programme.
When the ceiling of 95 % is reached, the Member States shall continue transmitting requests for payments to the Commission.
Article 35Prefinancing arrangements
1.Following its decision to approve the rural development programme, the Commission shall pay an initial prefinancing amount to the Member State for the whole programming period. This initial pre-financing amount shall be paid in instalments as follows:
(a)in 2014: 1 % of the amount of support from the EAFRD for the entire programming period to the programme and 1,5 % of the amount of support from the EAFRD for the entire programming period to the programme, where a Member State has been receiving financial assistance since 2010, either in accordance with Articles 122 and 143 TFEU, or from the European Financial Stability Facility (EFSF), or is receiving financial assistance on 31 December 2013 in accordance with Articles 136 and 143 TFEU;
(b)in 2015: 1 % of the amount of support from the EAFRD for the entire programming period to the programme and 1,5 % of the amount of support from the EAFRD for the entire programming period to the programme where a Member State has been receiving financial assistance since 2010, either in accordance with Articles 122 and 143 TFEU, or from the EFSF, or is receiving financial assistance on 31 December 2014 in accordance with Articles 136 and 143 TFEU;
(c)in 2016: 1 % of the amount of support from the EAFRD for the entire programming period to the programme.
If a rural development programme is adopted in 2015 or later, the earlier instalments shall be paid in the year of such adoption.
2.The total amount paid as prefinancing shall be reimbursed to the Commission if no expenditure is effected and no declaration of expenditure for the rural development programme is sent within 24 months of the date on which the Commission pays the first instalment of the prefinancing amount.
3.Interest generated on the prefinancing shall be posted to the rural development programme concerned and deducted from the amount of public expenditure indicated on the final declaration of expenditure.
4.The total prefinancing amount shall be cleared in accordance with the procedure referred to in Article 51 of this Regulation before the rural development programme is closed.
Article 36Interim payments
1.Interim payments shall be made for each rural development programme. They shall be calculated by applying the co-financing rate for each measure to the public expenditure effected pertaining to it as referred to in Article 59 of Regulation (EU) No 1305/2013.
2.Subject to the availability of resources, the Commission shall, taking account of reductions or suspensions applied under Article 41, make interim payments in order to reimburse the expenditure effected by accredited paying agencies in implementing the programmes.
3.Each interim payment shall be made by the Commission, subject to compliance with the following requirements:
(a)transmission to the Commission of a declaration of expenditure signed by the accredited paying agency, in accordance with Article 102(1)(c);
(b)no overrun of the total EAFRD contribution to each measure for the entire period covered by the programme concerned;
(c)transmission to the Commission of the last annual progress report on the implementation of the rural development programme.
4.If one of the requirements laid down in paragraph 3 is not met, the Commission shall forthwith inform the accredited paying agency or the coordinating body, where one has been appointed. If one of the requirements laid down in point (a) or in point (c) of paragraph 3 is not respected, the declaration of expenditure shall be inadmissible.
5.Without prejudice to the application of Articles 51 and 52, the Commission shall make interim payments within 45 days of registering a declaration of expenditure which meets the requirements set out in paragraph 3 of this Article.
6.Accredited paying agencies shall establish and forward to the Commission, either directly or via the intermediary of the coordinating body, where one has been appointed, intermediate declarations of expenditure relating to rural development programmes, within periods to be set by the Commission.
The Commission shall adopt implementing acts laying down the periods for accredited paying agencies to forward those intermediate declarations of expenditure. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 116(3).
Declarations of expenditure shall cover expenditure that the paying agencies have effected during each of the periods concerned. However, in cases in which expenditure referred to in Article 65(9) of Regulation (EU) No 1303/2013 cannot be declared to the Commission in the period concerned due to pending approval by the Commission of an amendment to the programme, it may be declared in subsequent periods.
Intermediate declarations of expenditure in respect of expenditure effected from 16 October onwards shall be booked to the following year's budget.
7.Article 83 of Regulation (EU) No 1303/2013 shall apply.
Article 37Payment of the balance and closure of the programme
1.After receiving the last annual progress report on the implementation of a rural development programme, the Commission shall pay the balance, subject to the availability of resources, on the basis of the financial plan in force, the annual accounts for the last execution year for the relevant rural development programme and of the corresponding clearance decision. Those accounts shall be presented to the Commission no later than six months after the final eligibility date of expenditure as referred to in Article 65(2) of Regulation (EU) No 1303/2013 and shall cover the expenditure effected by the paying agency up to the last eligibility date of expenditure.
2.The balance shall be paid no later than six months after the information and documents referred to in paragraph 1 of this Article are considered to be receivable by the Commission and the last annual account has been cleared. Without prejudice to Article 38(5) the amounts still committed after the balance is paid shall be decommitted by the Commission within a period of six months.
3.If, by the time limit set out in paragraph 1, the Commission has not been sent the last annual progress report and the documents needed for clearance of the accounts of the last execution year for the programme the balance shall be automatically decommitted in accordance with Article 38.
Article 38Automatic decommitment for rural development programmes
1.The Commission shall automatically decommit any portion of a budget commitment for a rural development programme that has not been used for the purpose of prefinancing or for making interim payments or for which no declaration of expenditure fulfilling the requirements laid down in Article 36(3) has been presented to it in relation to expenditure effected by 31 December of the third year following that of the budget commitment.
2.The part of budget commitments that is still open on the last eligibility date for expenditure as referred to in Article 65(2) of Regulation (EU) No 1303/2013 for which no declaration of expenditure has been made within six months of that date shall be automatically decommitted.
3.In the event of legal proceedings or of an administrative appeal having suspensory effect, the period for automatic decommitment referred to in paragraph 1 or paragraph 2 shall, in respect of the amount relating to the operations concerned, be interrupted for the duration of those proceedings or that administrative appeal, provided that the Commission receives a substantiated notification from the Member State by 31 December of year N + 3.
4.The following shall be disregarded in calculating the automatic decommitment:
(a)that part of the budget commitments for which a declaration of expenditure has been made but for which reimbursement has been reduced or suspended by the Commission at 31 December of year N + 3;
(b)that part of the budget commitments which a paying agency has been unable to disburse for reasons of force majeure seriously affecting the implementation of the rural development programme. National authorities claiming force majeure shall demonstrate the direct consequences on the implementation of all or part of the programme.
By 31 January, the Member State shall send to the Commission information on the exceptions referred to in the first subparagraph concerning the amounts declared by the end of the preceding year.
5.The Commission shall inform Member States in good time if there is a risk of automatic decommitment. It shall inform them of the amount involved as indicated by the information in its possession. The Member States shall have two months from receiving this information to agree to the amount in question or present observations. The Commission shall carry out the automatic decommitment not later than nine months after the last time-limit resulting from the application of paragraphs 1 to 3.
6.In the event of automatic decommitment, the EAFRD contribution to the rural development programme concerned shall be reduced, for the year in question, by the amount automatically decommitted. The Member State shall produce a revised financing plan splitting the reduction of the aid between the measures for approval by the Commission. If it does not do so, the Commission shall reduce the amounts allocated to each measure pro rata.
CHAPTER III Common Provisions
Article 39Agricultural financial year
Without prejudice to special provisions on declarations of expenditure and revenue relating to public intervention laid down by the Commission pursuant to point (a) of Article 46(6), the agricultural financial year shall cover expenditure paid and revenue received and entered in the accounts of the Funds' budget by the paying agencies in respect of financial year "N" beginning on 16 October of year "N-1" and ending on 15 October of year "N".
Article 40Compliance with payment deadlines
Where payment deadlines are laid down by Union law, any payment made by the paying agencies to the beneficiaries before the earliest possible date of payment and after the latest possible date of payment shall make the payments ineligible for Union financing, except in the cases, conditions and limits to be determined taking into account the principle of proportionality.
In order to make expenditure effected before the earliest possible date of payment or after the latest possible date of payment eligible for Union financing, while limiting the financial impact of doing so, the Commission shall be empowered to adopt delegated acts in accordance with Article 115, derogating from the rule contained in the first paragraph.
Article 41Reduction and suspension of monthly and interim payments
1.Where the declarations of expenditure or the information referred to in Article 102 enable the Commission to establish that expenditure has been effected by bodies which are not accredited paying agencies, that payment periods or financial ceilings set by Union law have not been respected or that expenditure has otherwise not been effected in accordance with Union rules, the Commission may reduce or suspend the monthly or interim payments to the Member State concerned in the framework of the implementing acts concerning the monthly payments referred to in Article 18(3) or in the framework of the interim payments referred to in Article 36, after giving the Member State an opportunity to submit its comments.
Where the declarations of expenditure or the information referred to in Article 102 do not enable the Commission to establish that the expenditure has been effected in accordance with Union rules, the Commission shall ask the Member State concerned to supply further information and to submit comments within a period which shall not be less than 30 days. If the Member State fails to respond to the Commission request within the period set or if the response is considered unsatisfactory or demonstrates that the expenditure has not been effected in accordance with Union rules, the Commission may reduce or suspend the monthly or interim payments to the Member State concerned in the framework of the implementing acts concerning the monthly payments referred to in Article 18(3) or in the framework of the interim payments referred to in Article 36.
2.The Commission may adopt implementing acts, reducing or suspending the monthly or interim payments to a Member State if one or more of the key components of the national control system in question do not exist or are not effective due to the gravity or persistence of the deficiencies found, or if there are similar serious deficiencies in the system for the recovery of irregular payments and if one of the following conditions is met:
(a)the deficiencies referred to in the first subparagraph are of a continuous nature and have been the reason for at least two implementing acts pursuant to Article 52, excluding from Union financing expenditure from the Member State concerned; or
(b)the Commission concludes that the Member State concerned is not in a position to implement in the immediate future the necessary remedial measures in accordance with an action plan with clear progress indicators, to be established in consultation with the Commission.
The reduction or suspension shall be applied to the relevant expenditure effected by the paying agency where the deficiencies exist for a period to be determined in the implementing acts referred to in this paragraph, which shall not exceed twelve months. If the conditions for the reduction or suspension continue to be met, the Commission may adopt implementing acts prolonging that period for further periods not exceeding twelve months in total. The reduction and suspension shall not be continued if those conditions are no longer met.
The implementing acts provided for in this paragraph shall be adopted in accordance with the advisory procedure referred to in Article 116(2).
Before adopting the implementing acts referred to in this paragraph, the Commission shall inform the Member State concerned of its intention and shall ask it to react within a period which shall not be less than 30 days.
The implementing acts determining the monthly payments referred to in Article 18(3) or the interim payments referred to in Article 36 shall take account of the implementing acts adopted under this paragraph.
3.Reductions and suspensions under this Article shall be applied in accordance with the principle of proportionality and shall be without prejudice to the application of Articles 51 and 52.
4.Reductions and suspensions under this Article shall be without prejudice to Articles 19, 22 and 23 of Regulation (EU) No 1303/2013.
The suspensions referred to in Articles 19 and 22 of Regulation (EU) No 1303/2013 shall be in accordance with the procedure laid down in paragraph 2 of this Article.
Article 42Suspension of payments in the case of late submission
Where sectoral agricultural legislation requires Member States to submit, within a specific period of time, information on the number of checks carried out under Article 59 and their outcomes and where the Member States overrun that period, the Commission may suspend the monthly payments referred to in Article 18 or the interim payments referred to in Article 36 provided that the Commission has made available to the Member States in good time prior to the start of the reference period all the information, forms and explanations they need to compile the relevant statistics. The amount to be suspended shall not exceed 1,5 % of the expenditure for which the relevant statistical information has not been sent in time. In applying the suspension, the Commission shall act in accordance with the principle of proportionality, taking account of the extent of the delay. In particular, account shall be taken of whether the late submission of information places the annual budget discharge mechanism at risk. Before suspending the monthly payments the Commission shall notify the Member State concerned in writing. The Commission shall reimburse the suspended amounts when it receives the statistical information from the Member States concerned, provided that the date of receipt is not later than 31 January of the following year.
Article 43Assignment of revenue
1.The following shall be "assigned revenue" within the meaning of Article 21 of Regulation (EU, Euratom) No 966/2012
(a)sums which, under Articles 40 and Article 51 as regards expenditure under EAGF, and under Articles 52 and 54, must be paid to the Union's budget, including interest thereon;
(b)sums which are collected or recovered under Section III of Chapter III of Title I of Part II of Regulation (EC) No 1234/2007;
(c)sums which have been collected as a consequence of penalties in accordance with the specific rules laid down in Union sectoral agricultural legislation, save if that legislation explicitly provides that those amounts may be retained by the Member States;
(d)amounts corresponding to penalties applied in accordance with the rules on cross-compliance laid down in Chapter II of Title VI, as regards expenditure under EAGF;
(e)any security, deposit or guarantee furnished pursuant to Union law adopted within the framework of the CAP, excluding rural development, and subsequently forfeited. However, forfeited securities lodged when issuing export or import licences or under a tendering procedure for the sole purpose of ensuring that tenderers submit genuine tenders shall be retained by the Member States.
2.The sums referred to in paragraph 1 shall be paid to the Union's budget and, in the event of reuse, shall be used exclusively to finance EAGF or EAFRD expenditure.
3.This Regulation shall apply mutatis mutandis to assigned revenue referred to in paragraph 1.
4.As regards the EAGF, Articles 170 and 171 of Regulation (EU, Euratom) No 966/2012 shall apply mutatis mutandis to the keeping of accounts on assigned revenue referred to in this Regulation.
Article 44Keeping of separate accounts
Each paying agency shall keep a set of separate accounts for the appropriations entered in the Union's budget for the Funds.
Article 45Information measures
1.The provision of information financed pursuant to point (e) of Article 6 shall aim, in particular, to help explain, implement and develop the CAP and to raise public awareness of its content and objectives to reinstate consumer confidence following crises through information campaigns, to inform farmers and other parties active in rural areas and to promote the European model of agriculture, as well as to help citizens understand it.
It shall supply coherent, objective and comprehensive information, both inside and outside the Union, in order to give an accurate overall picture of the CAP.
2.The measures referred to in paragraph 1 may consist of:
(a)annual work programmes or other specific measures presented by third parties;
(b)activities implemented on the initiative of the Commission.
Those measures which are required by law or those measures already receiving financing under another Union action shall be excluded.
In order to implement activities as referred to in point (b) the Commission may be assisted by external experts.
The measures referred to in the first subparagraph shall also contribute to the corporate communication of the Union's political priorities in so far as those priorities are related to the general objectives of this Regulation.
3.By 31 October of each year, the Commission shall publish a call of proposal respecting the conditions set out in Regulation (EU, Euratom) No 966/2012.
4.The Committee referred to in Article 116(1) shall be notified of measures envisaged and taken pursuant to this Article.
5.The Commission shall present a report on the implementation of this Article to the European Parliament and the Council every two years.
Article 46Commission powers
1.In order to take account of revenue collected by paying agencies for the Union's budget when making payments on the basis of the expenditure declarations submitted by Member States, the Commission shall be empowered to adopt delegated acts in accordance with Article 115 concerning the conditions under which certain types of expenditure and revenue under the Funds are to be compensated.
2.In order to enable the equitable distribution of the appropriations available between the Member States, if the Union's budget has not been adopted by the beginning of the financial year or if the total amount of the commitments scheduled exceeds the threshold laid down in Article 170(3) of Regulation (EU, Euratom) No 966/2012, the Commission shall be empowered to adopt delegated acts in accordance with Article 115 of this Regulation concerning the method applicable to the commitments and the payment of the amounts.
3.In order to verify the consistency of the data notified by the Member States in relation to the expenditure or other information provided for in this Regulation, the Commission shall be empowered, in the case of non-compliance with the obligation to notify the Commission pursuant to Article 102, to adopt delegated acts in accordance with Article 115 on the deferral of monthly payments to Member States referred to in Article 42 with regard to expenditure under the EAGF and laying down the conditions under which it will reduce or suspend interim payments to Member States under the EAFRD referred to in that Article.
4.When applying Article 42 in order to ensure that principle of proportionality is respected, the Commission shall be empowered to adopt delegated acts in accordance with Article 115 pertaining to rules on:
(a)the list of measures which fall under Article 42;
(b)the rate of suspension of payments referred to in that Article.
5.The Commission may adopt implementing acts laying down further rules on the obligation laid down in Article 44 as well as the specific conditions applying to the information to be booked in the accounts kept by the paying agencies. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 116(3).
6.The Commission may adopt implementing acts laying down rules on:
(a)the financing and accounting of intervention measures in the form of public storage, and other expenditure financed by the Funds;
(b)the terms and conditions governing the implementation of the automatic decommitment procedure;
(c)the procedure and other practical arrangements for the proper functioning of the mechanism provided for in Article 42.
Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 116(3).
CHAPTER IV Clearance of accounts
Section I General provisions
Article 47On-the-spot checks by the Commission
1.Without prejudice to the checks carried out by Member States under national law, regulations and administrative provisions or Article 287 TFEU or to any check organised under Article 322 TFEU or based on Council Regulation (Euratom, EC) No 2185/96(), the Commission may organise on-the-spot checks in Member States with a view to verifying in particular:
(a)compliance of administrative practices with Union rules;
(b)the existence of the requisite supporting documents and their correlation with the operations financed by the EAGF or the EAFRD;
(c)the terms on which the operations financed by the EAGF or the EAFRD were undertaken and checked.
(d)whether a paying agency complies with the accreditation criteria laid down in Article 7(2) and whether the Member State correctly applies the provisions of Article 7(5).
Persons authorised by the Commission to carry out on-the-spot checks on its behalf, or Commission agents acting within the scope of the powers conferred on them, shall have access to the books and all other documents, including documents and metadata drawn up or received and recorded on an electronic medium, relating to expenditure financed by the EAGF or the EAFRD.
The powers to carry out on-the-spot checks shall not affect the application of national provisions which reserve certain acts for agents specifically designated by national law. Without prejudice to the specific provisions of Regulation (EU, Euratom) No 883/2013() of the European Parliament and of the Council and Regulation (Euratom, EC) No 2185/96, persons authorised by the Commission to act on its behalf shall not take part, inter alia, in home visits or the formal questioning of persons on the basis of law of the Member State concerned. However, they shall have access to information thus obtained.
2.The Commission shall give sufficient prior notice of an on-the-spot check to the Member State concerned or to the Member State within whose territory the check is to take place, taking into account the administrative impact on paying agencies when organising checks. Agents from the Member State concerned may take part in such checks.
At the request of the Commission and with the agreement of the Member State, additional checks or inquiries into the operations covered by this Regulation shall be undertaken by the competent bodies of that Member State. Commission agents or persons authorised by the Commission to act on its behalf may take part in such checks.
In order to improve checks, the Commission may, with the agreement of the Member States concerned, request the assistance of the authorities of those Member States for certain checks or inquiries.
Article 48Access to information
1.Member States shall make available to the Commission all information necessary for the smooth operation of the Funds and shall take all appropriate measures to facilitate the checks which the Commission deems appropriate in connection with the management of Union financing, including on-the-spot checks.
2.Member States shall communicate to the Commission at its request the laws, regulations and administrative provisions which they have adopted in order to implement the Union legal acts relating to the CAP, where those acts have a financial impact on the EAGF or the EAFRD.
3.Member States shall make available to the Commission information about irregularities and suspected fraud cases detected, as well as information about the steps taken pursuant to Section III of this Chapter to recover undue payments in connection with those irregularities and frauds.
Article 49Access to documents
The accredited paying agencies shall keep supporting documents relating to payments made and documents relating to the performance of the administrative and physical checks required by Union law, and shall make the documents and information available to the Commission. Those supporting documents may be kept in electronic form under the conditions laid down by the Commission on the basis of Article 50(2).
Where those documents are kept by an authority acting under delegation from a paying agency and responsible for authorising expenditure, that authority shall send reports to the accredited paying agency on the number of checks made, their content and the measures taken in the light of their results.
Article 50Commission powers
1.In order to ensure the correct and efficient application of the provisions relating to on-the-spot checks and access to documents and information set out in this Chapter, the Commission shall be empowered to adopt delegated acts in accordance with Article 115 supplementing specific obligations to be complied with by the Member States under this Chapter.
2.The Commission may adopt implementing acts laying down rules on:
(a)the procedures relating to the specific obligations which the Member States have to comply with in relation to the checks provided for in this Chapter;
(b)the procedures relating to the cooperation obligations to be complied with by the Member States for the implementation of Articles 47 and 48;
(c)the procedures and other practical arrangements relating to the reporting obligation referred to in Article 48(3);
(d)the conditions under which the supporting documents referred to in Article 49 are to be kept, including their form and the time period of their storage.
Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 116(3).
Section II Clearance
Article 51Clearance of accounts
Prior to 31 May of the year following the budget year in question and on the basis of the information transmitted in accordance with point (c) of Article 102(1), the Commission shall adopt implementing acts, containing its decision on the clearance of the accounts of the accredited paying agencies. Those implementing acts shall cover the completeness, accuracy and veracity of the annual accounts submitted and shall be without prejudice to the content of decisions subsequently adopted pursuant to Article 52.
Those implementing acts shall be adopted in accordance with the advisory procedure referred to in Article 116(2).
Article 52Conformity clearance
1.Where it finds that expenditure falling within the scope of Article 4(1) and Article 5 has not been effected in conformity with Union law and, in respect of the EAFRD, has not been effected in conformity with the applicable Union and national law referred to in Article 85 of Regulation (EU) No 1303/2013, the Commission shall adopt implementing acts determining the amounts to be excluded from Union financing. Those implementing acts shall be adopted in accordance with the advisory procedure referred to in Article 116(2).
2.The Commission shall assess the amounts to be excluded on the basis of the gravity of the non-conformity recorded. It shall take due account of the nature of the infringement and of the financial damage caused to the Union. It shall base the exclusion on the identification of amounts unduly spent and, where these cannot be identified with proportionate effort, may apply extrapolated or flat-rate corrections. Flat-rate corrections shall only be applied where, due to the nature of the case or because the Member State has not provided the Commission with the necessary information, it is not possible with proportionate effort to identify more precisely the financial damage caused to the Union.
3.Before the adoption of any decision to refuse financing, the findings from the Commission's inspection and the Member State's replies shall be notified in writing, following which the two parties shall attempt to reach agreement on the action to be taken. At that point in the procedure the Member States shall be given the opportunity to demonstrate that the actual extent of the non-compliance is less than in the Commission's assessment.
If agreement is not reached, the Member State may request the opening of a procedure aimed at reconciling, within a period of four months, each party's position. A report of the outcome of the procedure shall be submitted to the Commission. The Commission shall take into account the recommendations in the report before deciding on any refusal of financing and shall give reasons if it decides not to follow those recommendations.
4.Financing may not be refused for:
(a)expenditure as indicated in Article 4(1) which is effected more than 24 months before the Commission notifies the Member State in writing of its inspection findings;
(b)expenditure on multiannual measures falling within the scope of Article 4(1) or within the scope of the programmes as indicated in Article 5, where the final obligation on the recipient occurs more than 24 months before the Commission notifies the Member State in writing of its inspection findings;
(c)expenditure on measures in programmes, as indicated in Article 5, other than those referred to in point (b) of this paragraph, for which the payment or, as the case may be, the final payment, by the paying agency, is made more than 24 months before the Commission notifies the Member State in writing of its inspection findings.
5.Paragraph 4 shall not apply in the case of:
(a)irregularities covered by Section III of this Chapter;
(b)national aids for which the Commission has initiated the procedure laid down in Article 108(2) TFEU or infringements which the Commission has notified to the Member State concerned by a letter of formal notice in accordance with Article 258 TFEU;
(c)infringements by Member States of their obligations under Chapter III of Title V of this Regulation, provided that the Commission notifies the Member State in writing of its inspection findings within 12 months following receipt of the Member State's report on the results of its checks on the expenditure concerned.
Article 53Commission powers
1.The Commission shall adopt implementing acts laying down rules on:
(a)the clearance of accounts provided for in Article 51 with regard to the measures to be taken in connection with the adoption of the decision and its implementation, including the information exchange between the Commission and the Member States and the deadlines to be respected;
(b)the conformity clearance provided for in Article 52 with regard to the measures to be taken in connection with the adoption of the decision and its implementation, including the information exchange between the Commission and the Member States and the deadlines to be respected as well as the conciliation procedure provided for in that Article, including the establishment, tasks, composition and working arrangements of the conciliation body.
2.Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 116(3).
3.In order to enable the Commission to protect the financial interest of the Union and to ensure the provisions relating to the conformity clearance provided for in Article 52 are applied efficiently, the Commission shall be empowered to adopt delegated acts in accordance with Article 115, concerning the criteria and methodology for applying corrections.
Section III Irregularities
Article 54Common Provisions
1.For any undue payment following the occurrence of irregularity or negligence, Member States shall request recovery from the beneficiary within 18 months after the approval and, where applicable, reception, by the paying agency or body responsible for the recovery, of a control report or similar document, stating that an irregularity has taken place. The corresponding amounts shall be recorded at the time of the recovery request in the debtors' ledger of the paying agency.
2.If recovery has not taken place within four years from the date of the recovery request, or within eight years where recovery is taken in the national courts, 50 % of the financial consequences of the non-recovery shall be borne by the Member State concerned and 50 % by the Union's budget, without prejudice to the requirement that the Member State concerned must pursue recovery procedures in compliance with Article 58.
Where, in the context of the recovery procedure, the absence of any irregularity is recorded by an administrative or legal instrument of a final nature, the Member State concerned shall declare as expenditure to the Funds the financial burden borne by it under the first subparagraph.
However, if for reasons not attributable to the Member State concerned, it is not possible for recovery to take place within the time limit specified in the first subparagraph, and the amount to be recovered exceeds EUR 1 million, the Commission may, at the request of the Member State, extend the time-limit by a period of up to half of the original period.
3.On duly justified grounds, Member States may decide not to pursue recovery. A decision to this effect may be taken only in the following cases:
(a)where the costs already and likely to be effected total more than the amount to be recovered, which condition shall be considered to have been met if:
(i)
the amount to be recovered from the beneficiary in the context of an individual payment for an aid scheme or support measure, not including interest, does not exceed EUR 100; or
(ii)
the amount to be recovered from the beneficiary in the context of an individual payment for an aid scheme or support measure, not including interest, falls between EUR 100 and EUR 150 and the Member State concerned applies a threshold equal to or higher than the amount to be recovered under its national law for not pursuing national debts.
(b)where recovery proves impossible owing to the insolvency, recorded and recognised under national law, of the debtor or the persons legally responsible for the irregularity.
Where the decision referred to in the first subparagraph of this paragraph is taken before the outstanding amount has been subject to the rules referred to in paragraph 2, the financial consequence of non-recovery shall be borne by the Union's budget.
4.Member States shall enter in the annual accounts to be sent to the Commission under point (c)(iv) of Article 102(1) the amounts to be borne by them under paragraph 2 of this Article. The Commission shall check that this has been done and make any adjustments needed in the implementing act referred to in Article 51.
5.The Commission may, provided that the procedure laid down in Article 52(3) has been followed, adopt, implementing acts, excluding from Union financing sums charged to the Union's budget in the following cases:
(a)if the Member State has not respected the time limits referred to in paragraph 1;
(b)if it considers that the decision not to pursue recovery taken by a Member State pursuant to paragraph 3 is not justified;
(c)if it considers that an irregularity or lack of recovery is the outcome of irregularity or negligence attributable to the administrative authorities or another official body of the Member State.
Those implementing acts shall be adopted in accordance with the advisory procedure referred to in Article 116(2).
Article 55Provisions specific to the EAGF
Sums recovered following the occurrence of irregularity or negligence and the interest thereon shall be made over to the paying agency and booked by it as revenue assigned to the EAGF in the month in which the money is actually received.
When the Union's budget is credited as referred to in the first paragraph, the Member State may retain 20 % of the corresponding amounts as flat rate recovery costs, except in cases of irregularity or negligence attributable to its administrative authorities or other official bodies.
Article 56Provisions specific to the EAFRD
Where irregularities or negligence are detected in rural development operations or programmes, Member States shall make financial adjustments by totally or partially cancelling the Union financing concerned. Member States shall take into consideration the nature and gravity of the irregularities detected and the level of the financial loss to the EAFRD.
Amounts of the Union financing under the EAFRD which are cancelled and amounts recovered, as well as the interest thereon, shall be reallocated to the programme concerned. However, the cancelled or recovered Union funds may be reused by Member States only for an operation under the same rural development programme and provided the funds are not reallocated to operations which have been the subject of a financial adjustment. After the closure of a rural development programme, the Member State shall refund the sums recovered to the Union's budget.
Article 57Commission powers
1.In order to ensure correct and efficient application of the provisions relating to the conditions for the recovery of undue payments and interest thereon, the Commission shall be empowered to adopt delegated acts in accordance with Article 115 concerning specific obligations to be complied with by the Member States.
2.The Commission shall adopt implementing acts laying down rules on:
(a)the procedures for the recovery of undue payments and interest as set out in this Section and for keeping the Commission apprised of pending recoveries;
(b)the forms of notification and communication to be made by the Member States to the Commission in relation to the obligations set out in this Section.
Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 116(3).