The basic payment scheme ceiling for any given year is calculated by deducting from the annual national ceiling set out in Annex II all the ceilings calculated in respect of that year in accordance with Articles 42, 47, 51 and 53.

The relevant authority’s share of the basic payment ceiling is the amount which remains for the basic payment scheme in the constituent nation after deducting from the relevant authority’s share of the national ceiling the ceilings set under Articles 42, 47 and 51 and the amount allocated in the constituent nation under Article 53. The relevant authority may increase the amount which represents its share of the basic payment scheme ceiling. That increase may not exceed 3% of the amount which represents its share of the annual national ceiling after deduction of the amount resulting from the application of Article 47(1) for the relevant year.

The relevant authority may review the decision under paragraph 2 on an annual basis.

The total value of all payment entitlements and the national reserve or regional reserves in the constituent nation must equal its share of the basic payment scheme ceiling. The total value of payment entitlements and national reserves and regional reserves in the United Kingdom must equal the basic payment scheme ceiling calculated in accordance with paragraph 1.

If the ceiling F9calculated pursuant to paragraph 1 of this Article is different from that of the previous year as a result of any decision taken by F5the relevant authority in accordance with paragraph 3 of this Article, F4Article 7A,F6Article 14, Article 42(1), F7... the second subparagraph of Article 51(1), or Article 53, F5the relevant authority shall linearly reduce or increase the value of all payment entitlements in order to ensure compliance with paragraph 4 of this Article.

F10The relevant authority may apply the basic payment scheme at regional level, provided that it took a decision to do so by 1 August 2014. In such cases, F11the relevant authority shall define the regions in accordance with objective and non-discriminatory criteria such as their agronomic and socio-economic characteristics, their regional agricultural potential, or their institutional or administrative structure.

F12...

F13The relevant authority shall divide F14its share of the annual national ceiling for the basic payment scheme referred to in Article 22(1) between the regions in accordance with objective and non-discriminatory criteria.

F15...

F16The relevant authority may decide that the regional ceilings shall be subject to annual progressive modifications in accordance with pre-established annual steps and objective and non-discriminatory criteria such as agricultural potential or environmental criteria.

To the extent necessary to respect the applicable regional ceilings determined in accordance with paragraph 2 or 3, F17the relevant authority shall make a linear reduction or increase in the value of the payment entitlements in each of the relevant regions.

F18The relevant authority may decide to cease the application of the basic payment scheme at regional level from a date to be set by F19the relevant authority.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Except in the case of force majeure or exceptional circumstances, the number of payment entitlements allocated per farmer in 2015 shall be equal to the number of eligible hectares, which the farmer declares in his aid application in accordance with point (a) of the first subparagraph of Article 72(1) of Regulation (EU) No 1306/2013 for 2015 and which are at his disposal on a date fixed by the Member State. That date shall be no later than the date fixed in that Member State for amending such an aid application.

Member States may apply one or more of the limitations, as set out in paragraphs 4 to 7, on the number of payment entitlements to be allocated under paragraph 2.

Member States may decide that the number of payment entitlements to be allocated shall be equal to either the number of eligible hectares which the farmer declared in accordance with Article 34(2) of Regulation (EC) No 73/2009 in 2013, or the number of eligible hectares referred to in paragraph 2 of this Article, whichever is the lowest. For Croatia, the use of this option shall be without prejudice to the allocation of payment entitlements for de–mined hectares in accordance with Article 20(4) of this Regulation.

Where the total number of eligible hectares referred to in paragraph 2 of this Article declared in a Member State would result in an increase of more than 35 % of the total number of eligible hectares declared in accordance with Article 35 of Regulation (EC) No 73/2009 in 2009, or in the case of Croatia in 2013, Member States may limit the number of payment entitlements to be allocated in 2015 to a minimum of either 135 % or 145 % of the total number of eligible hectares declared in 2009, or, in the case of Croatia, of the total number of eligible hectares declared in 2013, in accordance with Article 35 of Regulation (EC) No 73/2009.

When using this option, Member States shall allocate a reduced number of payment entitlements to farmers. That number shall be calculated by applying a proportional reduction to the additional number of eligible hectares declared by each farmer in 2015 compared to the number of eligible hectares within the meaning of Article 34(2) of Regulation (EC) No 73/2009 that that farmer declared in his aid application in 2011 or, in the case of Croatia, in 2013, without prejudice to the de-mined hectares for which payment entitlements are to be allocated in accordance with Article 20(4) of this Regulation.

Member States may decide to apply, for the purposes of establishing the number of payment entitlements to be allocated to a farmer, a reduction coefficient to those eligible hectares referred to in paragraph 2 which consist of permanent grassland located in areas with difficult climate conditions, especially due to their altitude and other natural constraints such as poor soil quality, steepness and water supply.

Member States may decide that the number of payment entitlements to be allocated to a farmer shall be equal to the number of eligible hectares referred to in paragraph 2 of this Article which were not hectares of vineyards on the date fixed by the Member State in accordance with Article 11(2) of Regulation (EC) No 1122/2009 for the claim year 2013 or hectares of arable land under permanent greenhouses.

In the case of the sale or lease of their holding or part of it, natural or legal persons complying with paragraph 1 of this Article may, by contract signed before the final date for submitting applications in 2015 to be set in accordance with point (b) of the first subparagraph of Article 78 of Regulation (EU) No 1306/2013, transfer the right to receive payment entitlements in accordance with paragraph 1 of this Article to one or more farmers provided that the latter comply with the conditions laid down in Article 9 of this Regulation.

A Member State may decide to fix a minimum size per holding, expressed in eligible hectares, in respect of which the farmer may apply for an allocation of payment entitlements. That minimum size shall not exceed the threshold set out in point (b) of Article 10(1) in conjunction with paragraph 2 of that Article.

Member States shall, where relevant, notify the Commission of the decisions referred to in this Article by 1 August 2014.

The Commission shall adopt implementing acts laying down rules on applications for the allocation of payment entitlements submitted in the year of allocation of payment entitlements where those payment entitlements may not yet be definitively established and where that allocation is affected by specific circumstances. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 71(2).

Subject to paragraphs 2 and 3, for the purposes of this Article the unit value of payment entitlements is calculated by dividing a fixed percentage of the relevant authority’s share of the national ceiling for each relevant year by the number of payment entitlements in 2015 in the constituent nation or, where applicable, at regional level, excluding those allocated from the national reserve or regional reserves in 2015.

The fixed percentage referred to in the first subparagraph is calculated by dividing the relevant authority’s share of the basic payment scheme ceiling or, where applicable, the regional ceiling for the basic payment scheme set in accordance with Article 23(2), as it had effect immediately before exit day for 2015, after applying the linear reduction provided for in paragraph 1 or, where applicable, paragraph 2 of Article 30 by the relevant authority’s share of the national ceiling for 2015.

The value of payment entitlements, other than those allocated from the national reserve or regional reserves in 2015, may be differentiated for each relevant year on the basis of their initial unit value calculated in accordance with Article 26 as it had effect immediately before exit day, provided that the decision to differentiate was taken and notified to the Commission by 1 August 2014.

All payment entitlements in a constituent nation or, where Article 23 is applied, in a region shall have a uniform unit value unless the relevant authority has applied the derogation in paragraph 4 of this Article, as it had effect immediately before exit day. Where a relevant authority has applied this derogation, the unit value will be calculated in accordance with paragraphs 4 to 7 of this Article as it had effect immediately before exit day.

When applying paragraph 2 of this Article, the transition from the initial unit value of payment entitlements as calculated in accordance with Article 26 F22as it had effect immediately before exit day to their final unit value in 2019 as established in accordance with paragraph 3 or paragraphs 4 to 7 of this Article shall be made in equal steps starting from 2015.

In order to ensure compliance with the fixed percentage referred to in paragraph 1 of this Article for each year, the value of the payment entitlements with an initial unit value that is higher than the national or regional unit value in 2019 shall be adjusted.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

In 2015, Member States shall inform farmers of the value of their payment entitlements as calculated in accordance with this Article and Articles 26 and 27 for each year of the period covered by this Regulation.

The relevant authority shall maintain the national reserve or regional reserves established prior to exit day.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F28The relevant authority shall allocate payment entitlements from their national or regional reserves in accordance with objective criteria and in such a way as to ensure the equal treatment of farmers and to avoid distortions of the market and of competition.

Payment entitlements referred to in paragraph 4 shall only be allocated to farmers entitled to be granted direct payments in accordance with Article 9.

F29The relevant authority shall use their national or regional reserves to allocate payment entitlements, as a matter of priority, to young farmers and to farmers commencing their agricultural activity.

When applying paragraph 6 and points F33(a) and (b) of paragraph 7, F34the relevant authority shall fix the value of payment entitlements allocated to farmers at the national or regional average value of payment entitlements in the year of allocation.

F35The national or regional average value shall be calculated by dividing the relevant authority’s share of the basic payment scheme ceiling or, where applicable, the regional ceiling for the basic payment scheme set in accordance with Article 23(2), for the year of allocation, excluding the amount of the national reserve or regional reserves, by the number of allocated payment entitlements.

F36The relevant authority shall fix the steps for annual progressive modifications of the value of payment entitlements allocated from the national reserve or regional reserves, taking account of the modifications of the F37relevant authority’s share of the basic payment ceiling or, where applicable, the regional ceiling for the basic payment scheme set in accordance with Article 23(2) that result from the variations in the level of the national ceilings set out in Annex II.

Where a farmer is entitled to receive payment entitlements or to increase the value of the existing ones by virtue of a definitive court ruling or by virtue of a definitive administrative act of the competent authority of a F38relevant authority, the farmer shall receive the number and value of payment entitlements established in that ruling or act at a date to be fixed by the F38relevant authority. However, that date shall not be later than the latest date for lodging an application under the basic payment scheme following the date of the court ruling or the administrative act, taking into account the application of Articles 32 and 33.

When applying paragraph 6, points (a) and (b) of paragraph 7 and paragraph 9, F40the relevant authority may either allocate new entitlements or increase the unit value of all of the existing entitlements of a farmer up to the national or regional average value.

The F44appropriate authority may make regulations laying down necessary measures regarding the reversion of non-activated payment entitlements to the national reserve or regional reserves. F45...

Support under the basic payment scheme shall be granted to farmers, by means of declaration in accordance with Article 33(1), upon activation of a payment entitlement per eligible hectare in the F46constituent nation where it has been allocated. Activated payment entitlements shall give a right to the annual payment of the amounts fixed therein, without prejudice to the application F101of financial discipline, of reduction of payments in accordance with Article 11 and of linear reductions in accordance with F70F102Article 7 and Article 51(2) F47... of this Regulation, and to the application of Article 63 of Regulation (EU) No 1306/2013.

Areas shall be considered to be eligible hectares only if they comply with the definition of eligible hectare throughout the calendar year, except in the case of force majeure or exceptional circumstances.

For the purposes of determining 'eligible hectare', F51the relevant authority having taken the decision referred to in the second subparagraph of Article 4(2) may apply a reduction coefficient to convert the hectares concerned into 'eligible hectares'.

Areas used for the production of hemp shall only be eligible hectares if the varieties used have a tetrahydrocannabinol content not exceeding 0,2 %.

For the purposes of the activation of payment entitlements provided for in Article 32(1), the farmer shall declare the parcels corresponding to the eligible hectares accompanying any payment entitlement. Except in the case of force majeure or exceptional circumstances, the parcels declared shall be at the farmer's disposal on a date fixed by the F53relevant authority, which shall be no later than the date fixed in that F54constituent nation for amending the aid application as referred to in Article 72(1) of Regulation (EU) No 1306/2013.

F55The relevant authority may, in duly justified circumstances, authorise the farmer to modify his declaration provided that he maintains at least the number of hectares corresponding to his payment entitlements and respects the conditions for granting the payment under the basic payment scheme for the area concerned.

Payment entitlements may be transferred only to a farmer entitled to be granted direct payments in accordance with Article 9 established in the same F56constituent nation, except in the case of transfer by actual or anticipated inheritance.

Payment entitlements, including in the case of actual or anticipated inheritance, may be activated only in the F56constituent nation where they were allocated.

Where F57the relevant authority exercises the option in Article 23(1), payment entitlements may be transferred or activated only within the same region, except in the case of actual or anticipated inheritance.

Payment entitlements, including in the case of actual or anticipated inheritance, may be activated only in the region where they were allocated.

F58A relevant authority not exercising the option in Article 23(1) may decide that payment entitlements may be transferred or activated only within the same region, except in the case of actual or anticipated inheritance.

Such regions shall be defined at the appropriate territorial level in accordance with objective criteria and in a way that ensures the equal treatment of farmers and avoids distortions of the market and of competition.

Where payment entitlements are transferred without land, F59the relevant authority may, acting in compliance with F60retained EU law relating to the common agricultural policy and the objectives of the common agricultural policy set out in Article 39 of the Treaty on the Functioning of the European Union, decide that a part of the payment entitlements transferred are to revert to the national reserve or regional reserves or that their unit value is to be reduced in favour of the national reserve or regional reserves. Such reduction may be applied to one or more types of transfer.

The F61appropriate authority may make regulations laying down detailed rules governing the notification by farmers of transfer of payment entitlements to the F62relevant authority and the deadlines within which such notification is to take place. F63...

In order to ensure the proper management of payment entitlements, the F66appropriate authority may make regulations laying down rules on the content of the declaration and the requirements for the activation of payment entitlements.

In order to preserve public health, the F67appropriate authority may make regulations laying down rules making the granting of payments conditional upon the use of certified seeds of certain hemp varieties and the procedure for the determination of hemp varieties and the verification of their tetrahydrocannabinol content referred to in Article 32(6).