CHAPTER IU.K. PAYING AGENCIES AND OTHER BODIES
Article 1U.K.Conditions for the accreditation of paying agencies
1.Paying agencies carrying out the management and control of expenditure as provided for in Article 7(1) of Regulation (EU) No 1306/2013 shall provide, in respect of payments made by them and as regards communicating and keeping information, sufficient guarantees that:
the eligibility of requests and, in the framework of rural development, the procedure for allocating aid, as well as their compliance with Union rules are checked before payment is authorised;
accurate and exhaustive accounts are kept of the payments made;
the checks laid down by Union legislation are made;
the requisite documents are presented within the time limits and in the form set out by Union rules;
the documents are accessible and kept in a manner which ensures their completeness, validity and legibility over time, including with regard to electronic documents within the meaning of Union rules.
2.Member States shall accredit as paying agencies departments or bodies which fulfil the conditions laid down in paragraph 1. Furthermore, in order to be accredited, a paying agency shall have an administrative organisation and a system of internal control which comply with the criteria set out in Annex I (‘accreditation criteria’) regarding
internal environment;
control activities;
information and communication;
monitoring.
Member States may lay down further accreditation criteria to take account of the size, responsibilities and other specific features of the paying agency.
Article 2U.K.Conditions for the accreditation of coordinating bodies
1.Where more than one paying agency is accredited, in accordance with Article 7(4) of Regulation (EU) No 1306/2013, the Member State concerned shall, by a formal act at ministerial level, decide on the accreditation of the coordinating body after it has satisfied itself that the administrative arrangements of that body offer sufficient assurance that it is capable of fulfilling the tasks referred to in that Article.
2.In order to be accredited, the coordinating body shall have procedures in place to ensure that:
declarations to the Commission are based on information from properly authorised sources;
declarations to the Commission are properly authorised before transmission;
a proper audit trail exists to support the information transmitted to the Commission;
a record of information received and transmitted is securely stored, either in paper or in computerised format.
Article 3U.K.Obligations of the paying agency as regards public intervention
1.The paying agencies referred to in Article 7(1) of Regulation (EU) No 1306/2013 shall manage and ensure control of the operations linked to intervention measures relating to public storage for which they are responsible, under the terms laid down in Annex II to this Regulation and, where appropriate, in the sectoral agricultural legislation, in particular on the basis of the minimum checking rates fixed in that Annex.
The paying agencies may delegate their powers in this connection to intervention agencies which meet the conditions of approval laid down in point 1.C of Annex I to this Regulation or act through other paying agencies.
2.The paying agencies or intervention agencies may, without prejudice to their overall responsibility relating to public storage:
entrust the management of certain public storage measures to natural or legal persons storing bought-in agricultural products (‘storers’);
mandate natural or legal persons to carry out certain specific tasks laid down by the sectoral agricultural legislation.
If the paying agencies entrust the management to storers as referred to in point (a) of the first subparagraph, such management shall be carried out under storage contracts on the basis of the obligations and general principles set out in Annex III.
3.The obligations of paying agencies with regard to public storage shall be, in particular, as follows:
to keep stock accounts and financial accounts for each product covered by an intervention measure involving public storage, based on the operations they carry out from 1 October of one year to 30 September of the following year, this period being referred to as an ‘accounting year’;
to keep an up-to-date list of the storers with whom they have concluded public storage contracts. This list shall contain references allowing the exact identification of all storage points, their capacity, the number of warehouses, cold stores and silos, and drawings and diagrams thereof;
to make available to the Commission the standard contracts used for public storage, the rules laid down for the taking-over of products, their storage and removal from the storehouses of the storers, and the rules applicable to the liability of storers;
to keep centralised, computerised stock accounts of all stocks, covering all storage places, all products and all the quantities and qualities of the different products, specifying in each case the weight (net and gross, where applicable) or the volume;
to perform all operations relating to the storage, conservation, transport or transfer of intervention products in accordance with Union and national legislation, without prejudice to the responsibility of the purchasers, of the other paying agencies involved in an operation and of any other persons acting on instruction in this regard;
to conduct checks on places where intervention stocks are held, throughout the year, at irregular intervals and without prior warning. However, provided that the purpose of the control is not jeopardised, advance notice may be given, strictly limited to the minimum time period necessary. Such notice shall not exceed 24 hours, except in duly justified cases;
to conduct an annual stocktaking in accordance with Article 4.
Where, in a Member State, management of the public storage accounts for one or more products is carried out by more than one paying agency, the stock accounts and financial accounts referred to in points (a) and (d) shall be consolidated at Member State level before the corresponding information is notified to the Commission.
4.The paying agencies shall take all the necessary steps to ensure:
that products covered by Union intervention measures are properly conserved by checking the quality of stored products at least once a year;
the integrity of intervention stocks.
5.The paying agencies shall inform the Commission immediately:
of cases where extending the storage period of a product is likely to result in its deterioration;
of quantitative losses or deterioration of the product due to natural disasters.
Where situations referred to in points (a) and (b) of the first subparagraph are applicable, the Commission shall adopt the appropriate decision:
as regards the situations referred to in point (a) of the first subparagraph, in accordance with the examination procedure referred to in Article 229(2) of Regulation (EU) No 1308/2013 of the European Parliament and of the Council(1);
as regards the situations referred to in point (b) of the first subparagraph, in accordance with the examination procedure referred to in Article 116(3) of Regulation (EU) No 1306/2013.
6.The paying agencies shall bear any financial consequences of poor conservation of products covered by Union intervention measures, in particular those resulting from unsuitable storage methods. Without prejudice to any recourse against storers, the paying agencies shall bear financial responsibility for failure to comply with their undertakings or obligations.
7.The paying agencies shall make the public storage accounts and all documents, contracts and files drawn up or received in the context of intervention operations permanently available to Commission agents or persons mandated by the Commission, either electronically or at the premises of the paying agencies.
Article 4U.K.Inventory
1.During each accounting year, the paying agencies shall draw up an inventory for each product which has been the subject of Union intervention.
They shall compare the results of the inventory with the accounting data. Any differences in quantities found, and the amounts resulting from differences in quality found during checks, shall be accounted for in accordance with the rules adopted pursuant to Article 46(6)(a) of Regulation (EU) No 1306/2013.
2.For the purposes of paragraph 1, missing quantities resulting from normal storage operations shall be equal to the difference between the theoretical stock shown by the accounts inventory, on the one hand, and the actual physical stock as established on the basis of the inventory provided for in paragraph 1 or the stock shown as remaining on the books after the physical stock of a store has been exhausted, on the other hand and shall be subject to the tolerance limits set out in Annex IV.
CHAPTER IIU.K. FINANCIAL MANAGEMENT
Article 5U.K.Non-Compliance with the latest payment deadline
1.As regards the European Agricultural Guarantee Fund (EAGF), pursuant to the exceptions referred to in the first paragraph of Article 40 of Regulation (EU) No 1306/2013 and in accordance with the principle of proportionality, expenditure effected after the payment deadlines shall be eligible for Union payments under the conditions laid down in paragraphs 2 to 6 of this Article.
2.Where expenditure effected after the deadlines is equal to 5 % or less of the expenditure effected before the deadlines, no reduction of the monthly payments shall be made.
Where expenditure effected after the deadlines is above the threshold of 5 %, all further expenditure effected late shall be reduced in accordance with the following rules:
expenditure effected in the first month following the month in which the payment deadline expired, shall be reduced by 10 %,
expenditure effected in the second month following the month in which the payment deadline expired, shall be reduced by 25 %,
expenditure effected in the third month following the month in which the payment deadline expired, shall be reduced by 45 %,
expenditure effected in the fourth month following the month in which the payment deadline expired, shall be reduced by 70 %,
expenditure effected later than the fourth month following the month in which the payment deadline expired, shall be reduced by 100 %.
3.By way of derogation from paragraph 2, in the case of the direct payments falling under the ceiling referred to in Article 7 of Regulation (EU) No 1307/2013 of the European Parliament and of the Council(2) the following conditions shall apply:
where the threshold referred to in the first subparagraph of paragraph 2 has not been used in full for payments made in respect of calendar year N no later than 15 October of year N + 1 and the remainder of the threshold exceeds 2 %, that remainder shall be reduced to 2 %;
during a financial year N+1, direct payments, other than payments provided for in Regulation (EU) No 228/2013 of the European Parliament and of the Council(3) and in Regulation (EU) No 229/2013 of the European Parliament and of the Council(4), in respect of calendar years N-1 or earlier made after the payment deadline will only be eligible for financing by EAGF if the total amount of direct payments made within financial year N+1, where applicable corrected to amounts before the adjustment provided for in Article 26 of Regulation (EU) No 1306/2013, does not exceed the ceiling laid down in Annex III of Regulation (EU) No 1307/2013 in respect of calendar year N, in accordance with Article 7 of that Regulation;
expenditure exceeding the limits referred to in point (a) or (b) shall be reduced by 100 %.
The amounts of the reimbursements referred to in Article 26(5) of Regulation (EU) No 1306/2013 shall not be taken into account to check whether the condition laid down in point (b) of the first subparagraph of this paragraph is fulfilled.
[F13a. By way of derogation from paragraph 2, during financial year 2015, in the case of direct payments listed in Annex I to Council Regulation (EC) No 73/2009, the following conditions shall apply:
where the threshold referred to in the first subparagraph of paragraph 2 has not been used in full for payments made in respect of calendar year 2014 no later than 15 October 2015 and the remainder of the threshold exceeds 2 %, that remainder shall be reduced to 2 %;
in the case of Member States applying the Single Payment Scheme in accordance with Chapter 3 of Title III of Regulation (EC) No 73/2009, direct payments, other than payments provided for in Regulation (EU) No 228/2013 of the European Parliament and of the Council (5) and in Regulation (EU) No 229/2013 of the European Parliament and of the Council (6) , in respect of calendar years 2013 or earlier made after the payment deadline will only be eligible for financing by the EAGF if the total amount of direct payments made within financial year 2015, where applicable corrected to amounts before the adjustment provided for in Article 11 of Regulation (EC) No 73/2009 or in Article 26 of Regulation (EU) No 1306/2013, does not exceed the ceiling set out in Annex VIII to Regulation (EC) No 73/2009 in respect of calendar year 2014 and taking into account the amounts resulting from the application of Article 136b of Regulation (EC) No 73/2009 for calendar year 2014 as set out in Annex VIIIa to that Regulation;
in the case of Member States applying the Single Area Payment Scheme as laid down by Article 122 of Regulation (EC) No 73/2009, direct payments in respect of calendar years 2013 or earlier made after the payment deadline will only be eligible for financing by the EAGF if the total amount of direct payments made within financial year 2015, where applicable corrected to amounts before the adjustment provided for in Article 11 of Regulation (EC) No 73/2009 or in Article 26 of Regulation (EU) No 1306/2013, does not exceed the sum of individual ceilings laid down for direct payments in respect of calendar year 2014 for the Member State concerned;
expenditure exceeding the limits referred to in point (a), (b) or (c) shall be reduced by 100 %.
The amounts of the reimbursements referred to in Article 26(5) of Regulation (EU) No 1306/2013 shall not be taken into account to check whether the condition laid down in point (b) or (c) of the first subparagraph of this paragraph is fulfilled.]
4.The Commission shall apply a different time scale from those laid down in paragraphs 2 and 3, and/or lower reductions or no reduction at all, if exceptional management conditions are encountered for certain measures or if justified reasons are advanced by the Member States.
However, the first subparagraph shall not apply for expenditure exceeding the limit referred to in point (b) of paragraph 3.
5.Checks on compliance with the payment deadlines, in the context of the monthly payments, shall be made twice each financial year:
on expenditure effected by 31 July,
on expenditure effected by 15 October.
Any overrun of deadlines in August, September and October shall be taken into account in the accounts clearance decision referred to in Article 51 of Regulation (EU) No 1306/2013.
6.The reductions referred to in this Article shall be applied without prejudice to the subsequent decision on conformity clearance, as referred to in Article 52 of Regulation (EU) No 1306/2013.
Textual Amendments
F1 Inserted by Commission Delegated Regulation (EU) 2015/160 of 28 November 2014 amending Delegated Regulation (EU) No 907/2014 supplementing Regulation (EU) No 1306/2013 of the European Parliament and of the Council with regard to paying agencies and other bodies, financial management, clearance of accounts, securities and use of euro.
Article 6U.K.Non-Compliance with earliest date of payment
As regards EAGF, if Member States are allowed to pay advances up to a certain maximum amount before the earliest payment date fixed in the agricultural sectorial legislation, any expenditure paid above this maximum amount shall be considered as expenditure made before the earliest payment date. However, in accordance with the exceptions referred to in the first paragraph of Article 40 of Regulation (EU) No 1306/2013, that expenditure shall be eligible for Union payments subject to a reduction of 10 %.
Article 7U.K.Compensation by paying agencies
1.In its decision on the monthly payments to be adopted pursuant to Article 18(3) of Regulation (EU) No 1306/2013, the Commission shall pay the balance of the expenditure declared by each Member State, less the assigned revenue which that Member State has included in the same declaration of expenditure. This set-off shall be regarded as equivalent to collection of the corresponding revenue.
Commitment appropriations and payment appropriations generated by assigned revenue shall be open once this revenue has been assigned to budget lines. Assignment shall take place when the assigned revenue is entered into the accounts, within two months after receipt of the statements sent by the Member States, in accordance with the rules referred to in Article 43(4) of Regulation (EU) No 1306/2013.
2.If the sums referred to in Article 43(1) point (c) of Regulation (EU) No 1306/2013 were withheld before the payment of the aid concerned by the irregularity or negligence, they shall be deducted from the corresponding expenditure.
3.The amounts of the European Agricultural Fund for Rural Development (EAFRD) contributions recovered from beneficiaries under the rural development programme concerned during each reference period shall be deducted from the amount to be paid by the EAFRD in the declaration of expenditure for that period.
4.The greater or lesser amounts resulting, where applicable, from the clearance of accounts referred to in Article 51 of Regulation (EU) No 1306/2013 that may be re-used for the rural development programme shall be added to or deducted from the amount of the EAFRD contribution when the first declaration after the clearance of accounts decision is drawn up.
5.Financing by the EAGF shall be equal to the expenditure, calculated on the basis of the information notified by the paying agency, after deduction of any revenue accruing from the intervention measures, validated by the computerised system set up by the Commission and included by the paying agency in its declaration of expenditure.
Article 8U.K.Late adoption of Union budget
1.As regards EAGF, if the Union budget has not been adopted by the beginning of the budgetary year, the monthly payments referred to in Article 18 of Regulation (EU) No 1306/2013 shall be granted as a percentage of the declarations of expenditure received from each Member State, laid down for each chapter of expenditure and within the limits laid down in Article 16 of Regulation (EU, Euratom) No 966/2012. The Commission shall take into account the balance of amounts not reimbursed to the Member States in decisions on subsequent reimbursements.
2.As regards EAFRD, if the Union budget has not been adopted by the beginning of the budgetary year:
the interim payments referred to in Article 36 of Regulation (EU) No 1306/2013 shall be granted proportionally to the credits available as a percentage of the declarations of expenditure received for each rural development program. The Commission shall take the balance of amounts not reimbursed to the Member States into account in the subsequent interim payments.
as regards the budget commitments referred to in Article 33 of Regulation (EU) No 1306/2013, the first annual instalments following the adoption of the rural development programmes shall respect the order of adoption of those programmes. The budget commitments for the subsequent annual instalments shall be made in the order of the programmes having exhausted the respective commitments. The Commission may make partial annual commitments to the rural development programmes if the available commitment appropriations are limited. The remaining balance for those programmes shall be committed first once additional commitment appropriations become available.
Article 9U.K.Deferral of monthly payments
The Commission, having informed the Member States concerned, may defer the monthly payments referred to in Article 18 of Regulation (EU) No 1306/2013 to the Member States where the communications as referred to in point (c) (i) and (ii) of Article 102(1) of that Regulation arrive late or contain discrepancies which necessitate further checks.
Article 10U.K.Suspension of payment in case of late submission
1.The suspension of payments referred to in Article 42 of Regulation (EU) No 1306/2013 shall apply to the measures listed in Annex V to this Regulation.
2.As regards expenditure under EAGF, the following rates of suspension of payments shall apply:
if the results of the controls have not been sent by 15 October, 1 % of the expenditure for which the relevant information has not been sent in time;
if the results of the controls have not been sent by 1 December, 1,5 % of the expenditure for which the relevant information has not been sent in time.
3.As regards expenditure under EAFRD, the following rates of suspension of payments shall apply:
if the results of the controls have not been sent by 15 October, 1 % of the expenditure for which the relevant information has not been sent in time;
if the results of the controls have not been sent by 15 January, 1,5 % of the expenditure for which the relevant information has not been sent in time.
Article 11U.K.Applicable exchange rate for drawing up declarations of expenditure
1.In accordance with Article 106(4) of Regulation (EU) No 1306/2013, as regards EAGF, for drawing up their declarations of expenditure, Member States which have not adopted the euro shall apply the same exchange rate as that which they used to make payments to beneficiaries or receive revenue, in accordance with Chapter V and the sectoral agricultural legislation. For the clearance decisions referred in Articles 51 and 52 of Regulation (EU) No 1306/2013 Member States shall use the first exchange rate established by the European Central Bank after the date of adoption of those decisions.
In cases other than those referred to in the first subparagraph, in particular for promotion programmes approved under Council Regulation (EC) No 3/2008(7) and for promotion measures in the wine sector, as well as for operations for which an operative event has not been laid down by the sectoral agricultural legislation, the applicable exchange rate shall be the last-but-one exchange rate established by the European Central Bank before the month in respect of which the expenditure or assigned revenue is declared.
2.As regards the rural development programs, for drawing up their declarations of expenditure, Member States which do not form part of the euro zone shall apply, for each payment or recovery operation, the last-but-one exchange rate established by the European Central Bank prior to the month in which the operations are registered in the accounts of the paying agency.
CHAPTER IIIU.K. CLEARANCE OF ACCOUNTS AND OTHER CHECKS
Article 12U.K.Criteria and methodology for applying corrections in the framework of conformity clearance
1.For the purpose of adopting the decision pursuant to Article 52(1) of the Regulation (EU) No 1306/2013 on the amounts to be excluded from Union financing, the Commission shall distinguish between those amounts or parts of the amounts identified as amounts unduly spent and those determined by applying extrapolated or flat rate corrections.
In order to determine the amounts that may be excluded from Union financing, when finding that expenditure has not been incurred in conformity with Union law, and concerning EAFRD, in conformity with the applicable Union and national law, the Commission shall use its own findings and shall take into account the information made available by the Member States during the conformity clearance procedure carried out in accordance with Article 52 of Regulation (EU) No 1306/2013.
2.The Commission shall base the exclusion on the identification of the amounts unduly spent only if those amounts may be identified with proportionate effort. Where the Commission cannot identify the amounts unduly spent with proportionate effort, Member States may, within the time-periods set by the Commission during the conformity clearance procedure, submit data concerning the verification of those amounts on the basis of an examination of all individual cases potentially affected by the non-conformity. The verification shall cover the entire expenditure incurred in breach of applicable law and charged to the Union budget. The data submitted shall include all individual amounts which are ineligible due to that non-conformity.
3.Where the amounts unduly spent cannot be identified in accordance with paragraph 2, the Commission may determine the amounts to be excluded by applying extrapolated corrections. To enable the Commission to determine the relevant amounts, Member States may, within the time-periods set by the Commission during the conformity clearance procedure, submit a calculation of the amount to be excluded from Union financing by extrapolating through statistical means the results of checks carried out on a representative sample of those cases. The sample shall be drawn from the population for which the identified non-conformity is reasonably expected to occur.
4.In order to take into consideration the results submitted by Member States as referred to in paragraphs 2 and 3, the Commission shall be in a position to:
assess the methods retained for identifying or extrapolating, which shall be clearly described by the Member States;
check the representativeness of the sample referred to in paragraph 3;
check the content and results of the identification or extrapolation submitted to it;
obtain sufficient and relevant audit evidence regarding the underlying data.
5.When applying paragraph 3, the Member States may use the paying agencies’ control statistics as confirmed by the certification body, or such body’s assessment of the level of error in the context of its audit referred to in Article 9 of Regulation (EU) No 1306/2013, provided that:
the Commission is satisfied with the work carried out by the certification bodies, both in terms of audit strategy and concerning the content, extent and quality of the actual audit work;
the scope of the certification bodies’ work is consistent with the scope of the conformity clearance enquiry in question, in particular with regard to the measures or schemes;
the amount of the penalties that should have been applied was taken into account in the assessments.
6.Where the conditions for determining the amounts to be excluded from Union financing as referred to in paragraphs 2 and 3 are not met or the nature of the case is such that the amounts to be excluded cannot be determined on the basis of those paragraphs, the Commission shall apply the appropriate flat-rate corrections, taking into account the nature and gravity of the infringement and its own estimation of the risk of financial damage caused to the Union.
The level of flat-rate correction shall be established by taking into consideration in particular the type of non-conformity identified. To this effect control deficiencies shall be divided between those relating to key and ancillary controls as follows:
Key controls shall be the administrative and on-the-spot checks necessary to determine the eligibility of the aid and the relevant application of reductions and penalties;
Ancillary controls shall be all other administrative operations required to correctly process claims.
If, in the framework of the same conformity clearance procedure, different non-conformities which would individually lead to distinct flat-rate corrections are established, then only the highest flat-rate correction shall apply.
7.When establishing the level of flat-rate corrections, the Commission shall specifically take into account the following circumstances demonstrating a higher gravity of the deficiencies revealing a greater risk of loss for the Union’s budget:
one or more key controls are not applied or are applied so poorly or so infrequently that they are deemed ineffective in determining the eligibility of the claim or in preventing irregularities; or
three or more deficiencies are detected with respect to the same control system; or
the Member State’s application of a control system is found to be absent or gravely deficient, and there is evidence of wide-spread irregularity and negligence in countering irregular or fraudulent practices; or
a correction has already been applied to that Member State for similar deficiencies in the same sector, account taken however of the corrective or compensating measures already taken by the Member State.
[F28. Where a Member State submits objective elements, which do not fulfil the requirements laid down in paragraphs 2 and 3 of this Article, but which demonstrate that the maximum loss for the funds is lower than what would derive from the application of a flat rate lower than the one proposed, the Commission shall use that lower flat rate to decide on the amounts to be excluded from Union financing pursuant to Article 52 of Regulation (EU) No 1306/2013.]
9.Amounts effectively recovered from the beneficiaries and credited to the funds before a relevant date, to be established by the Commission in the course of the conformity clearance procedure, shall be deducted from the amount that the Commission decides to exclude from Union financing pursuant to Article 52 of Regulation (EU) No 1306/2013.
Textual Amendments
F2 Substituted by Commission Delegated Regulation (EU) 2015/160 of 28 November 2014 amending Delegated Regulation (EU) No 907/2014 supplementing Regulation (EU) No 1306/2013 of the European Parliament and of the Council with regard to paying agencies and other bodies, financial management, clearance of accounts, securities and use of euro.
Article 13U.K.Obligation following recovery procedures
Following the completion of the recovery procedures referred to in the first subparagraph of Article 54(2) of Regulation (EU) No 1306/2013, the Member States shall:
credit to the EAGF fifty percent of the amounts recovered, after deduction of the recovery costs as provided for in the second paragraph of Article 55 of that Regulation;
credit to the EAFRD fifty percent of amounts either recovered after the closure of the rural development programme or recovered before the closure of the programme but which could not be reallocated in accordance with Article 56 of Regulation (EU) No 1306/2013.
Article 14U.K.Scrutiny of transactions
The system of scrutiny established by Chapter III of Title V of Regulation (EU) No 1306/2013 shall not apply to the measures listed in Annex VI to this Regulation.
CHAPTER IVU.K. SECURITIES
SECTION 1 U.K. Scope and Use of terms
Article 15U.K.Scope
This Chapter shall apply in all cases where the sectoral agricultural legislation provides for a security whether or not the particular term ‘security’ is used.
This Chapter shall not apply to securities given to ensure payment of import and export duties referred to in Council Regulation (EEC) No 2913/92(8).
Article 16U.K.Terms used in this Chapter
For the purposes of this Chapter:
‘competent authority’ means either a party authorised to accept a security or a party authorised to decide in accordance with the relevant regulation if a security is to be released or forfeited;
‘block security’ means a security made available to the competent authority with the purpose of ensuring that more than one obligation is met;
‘the relevant part of the sum secured’ means the part of the sum secured corresponding to the quantity for which a requirement has been breached.
SECTION 2 U.K. Requirement of a Security
Article 17U.K.Responsible party
A security shall be given by or on behalf of the party responsible for paying the sum of money due if an obligation is not met.
Article 18U.K.Waiver of a security requirement
1.The competent authority may waive the security requirement where the party responsible for meeting the obligation is either:
a public body responsible for executing the duties of a public authority; or
a private body executing duties referred to in point (a) under State supervision.
2.The competent authority may waive the security requirement where the value of the sum secured is less than EUR 500. In that case, the party concerned shall undertake in writing to pay a sum equal to the security waived if the corresponding obligation is not met.
In applying the first subparagraph, the value of the security shall be calculated as comprising all the relevant obligations linked with a same operation.
Article 19U.K.Conditions applying to securities
1.The competent authority shall refuse to accept or shall require the replacement of any security which it considers inadequate or unsatisfactory or which does not provide cover for a sufficient period.
2.Where cash is deposited by transfer, it shall not be regarded as establishing a security until the competent authority is satisfied that it has the amount at its disposal.
3.A cheque for a sum whose payment is guaranteed by a financial institution recognised for that purpose by the Member State of the competent authority concerned shall be treated as a cash deposit. The competent authority need not to present such a cheque for payment until the period for which it is guaranteed is about to expire.
A cheque, other than as referred to in the first subparagraph, shall constitute a security only when the competent authority is satisfied that it has the amount at its disposal.
4.Any charges by a financial institution shall be borne by the party giving the security.
5.No interest shall be paid to the party giving a security in the form of a cash deposit.
Article 20U.K.Use of euro
1.Securities shall be constituted in euro.
2.If the security is accepted in a Member State which has not adopted the euro, the amount of the security in euro shall be converted into the applicable national currency in accordance with the provisions of Chapter V. The undertaking corresponding to the security and any amount withheld in the event of irregularities or breaches shall remain fixed in euro.
Article 21U.K.The guarantor
1.The guarantor shall have his officially registered residence or an establishment in the Union and, subject to the provisions of the Treaty concerning freedom to supply services, be approved by the competent authority of the Member State in which the security is given. The guarantor shall be bound by a written guarantee.
2.The written guarantee shall state at least:
the obligation or, in the case of a block security, the type(s) of obligation against whose fulfilment it guarantees the payment of a sum of money;
the maximum liability to pay that the guarantor accepts;
that the guarantor undertakes jointly and severally with the party responsible for meeting the obligation to pay, within 30 days upon demand by the competent authority, any sum, within the limit of the guarantee, due once a security is declared forfeit.
3.Where a written block security has already been given, the competent authority shall determine the procedure to be followed by which all or part of the block security shall be allocated to a particular obligation.
Article 22U.K.Application of force majeure
Any person responsible for an obligation covered by a security claiming that the non-respect of the obligation is due to force majeure shall prove to the satisfaction of the competent authorities that force majeure applies. If the competent authority recognises a case of force majeure, the obligation is cancelled for the sole purpose of releasing the security.
SECTION 3 U.K. Release and forfeiture of securities other than those referred to in Section 4
Article 23U.K.Forfeiting of securities
1.The obligation mentioned in Article 66(1) of Regulation (EU) No 1306/2013 is the requirement to perform or to refrain from performing an action, basic to the purposes of the Regulation imposing it.
2.If an obligation is not fulfilled and no time limit for fulfilment has been given, the security shall be forfeited when the competent authority establishes that it was not fulfilled.
3.If the fulfilment of an obligation is subject to a certain time limit, and the fulfilment took only place beyond that time limit, the security shall be forfeited.
In such case the security shall be forfeited for 10 % at once and further an additional percentage over the remaining balance shall be applied for:
2 % per calendar day exceeding the time limit if the obligation concerns the importing of products into a third country;
5 % per calendar day exceeding the time limit if the obligation concerns the leaving of products of the customs territory of the Union.
4.If an obligation is fulfilled timely, and the presentation of the proof of fulfilment is subject to a fixed time limit, the security covering that obligation shall be forfeited for each calendar day exceeding that time limit according to the formula 0,2/time limit in days set and taking account of Article 25.
If the proof referred to in the first subparagraph consists of the submission of a used or expired import or export licence, or the submission of the proof of products having left the custom territory of the Union, the security to be forfeited shall be 15 % if that proof is submitted after the fixed time limit referred to in the first subparagraph but at the latest on the 730th calendar day after the expiry date of the licence. After those 730 calendar days, the remaining security shall be forfeited in whole.
If the proof referred to in the first subparagraph consists of the submission of a used or expired export licence with advance fixing of the refunds, the security to be forfeited shall be:
10 % if the licence is submitted between the 61th and 90th calendar days after the date of expiry of the licence;
50 % if the licence is submitted between the 91st and 120th calendar day after the date of expiry of the licence;
70 % if the licence is submitted between the 121st and 150th calendar day after the date of expiry of the licence;
80 % if the licence is submitted between the 151st and 180th calendar day after the date of expiry of the licence;
100 % if the licence is submitted after the 180th calendar day after the date of expiry of the licence.
5.The amount of security to be forfeited shall be rounded to the first lower amount in whole euro or the applicable national currency.
Article 24U.K.Releasing of securities
1.Once the proof as laid down by the specific Union rules that an obligation has been fulfilled, or the security has been partially forfeited in accordance with Article 66(2) of Regulation (EU) No 1306/2013 and Article 23 of this Regulation, the security, or where applicable, the remainder of the security shall be released without delay.
2.A security shall on request be released in part where the relevant evidence has been furnished in relation to part of a quantity of product, provided that that part is not less than any minimum quantity specified in the regulation requiring the security, or, in the absence, as specified by the Member State.
3.Where no time period is laid down for producing the evidence needed to release a sum secured, such period shall be 365 calendar days from the time limit specified for respecting the obligation for which the security was lodged. Where no such time limit is specified, the period shall be 365 calendar days from the date by which all obligations have been fulfilled.
The period laid down in the first subparagraph shall not exceed 1 095 calendar days from the time the security was assigned to a particular obligation.
Article 25U.K.Thresholds
1.The total sum forfeited shall not exceed 100 % of the relevant part of the sum secured.
2.The competent authority may waive the forfeiture of an amount less than EUR 100, provided that similar national provisions for comparable cases are laid down by law, regulation or administrative action.
SECTION 4 U.K. Securities with respect to advance payments
Article 26U.K.Scope
The provisions of this Section shall apply in all cases where specific Union rules provide that a sum may be advanced before the obligation established to obtain any aid or advantage has been met.
Article 27U.K.Release of securities
1.The security shall be released:
either when final entitlement to the sum granted as an advance has been established;
or when the sum granted, plus any addition provided for in the specific Union rules, has been repaid.
2.Once the deadline for proving final entitlement to the sum granted has passed without production of evidence of entitlement, the competent authority shall immediately follow the procedure for forfeiting the security.
However, where specific Union rules so provide, evidence may still be produced after that date against partial repayment of the security.
CHAPTER VU.K. USE OF EURO
Article 28U.K.Export refunds and trade with third countries
1.For amounts relating to imports and for export taxes, fixed in euro by Union law relating to the common agricultural policy and applicable by the Member States in national currency, the conversion rate shall be specifically equal to the rate applicable pursuant to Article 18(1) of Regulation (EEC) No 2913/92.
2.For export refunds fixed in euro and for prices and amounts expressed in euro in Union agricultural legislation regarding trade with third countries, the operative event for the exchange rate shall be the acceptance of the customs declaration.
3.For the purpose of calculating the standard import value of fruit and vegetables referred to in Article 136(1) of Implementing Regulation (EU) No 543/2011(9), in order to determine the entry price referred to in Article 137(1) of that Regulation, the operative event for the exchange rate for the representative prices used to calculate that standard value and the amount of the reduction referred to in Article 134(3) of that Regulation shall be the day to which the representative prices relate.
Article 29U.K.Production refunds and specific types of aid
1.For production refunds fixed in euro by Union legislation, the operative event for the exchange rate shall be the date on which it is declared that the products have reached the destination required, as the case may be, by that legislation. In cases where no such destination is required, the operative event shall be the acceptance of the application for payment of the refund by the paying agency.
2.For aid granted by quantity of marketed product or product to be used in a specific way, without prejudice to Articles 30 to 33, the operative event for the exchange rate shall be the first operation which guarantees, after the products are taken over by the operator concerned, the appropriate use of the products in question and entails grant of the aid.
3.For private storage aid the operative event for the exchange rate shall be the first day of the period in respect of which the aid relating to one and the same contract is granted.
4.For aid other than that referred to in paragraphs 2 and 3 of this Article and in Articles 30 and 31, the operative event for the exchange rate shall be the deadline for the submission of applications.
Article 30U.K.Wine sector
1.The operative event for the exchange rate shall be the first day of the wine year in which the support is granted for the following:
restructuring and conversion of vineyards referred to in Article 46 of Regulation (EU) No 1308/2013;
setting-up of mutual funds referred to in Article 48 of Regulation (EU) No 1308/2013;
harvest insurance referred to in Article 49 of Regulation (EU) No 1308/2013.
2.For the aids paid for the voluntary or obligatory distillation of by-products of wine-making, referred to in Article 52 of Regulation (EU) No 1308/2013, the operative event for the exchange rate shall be the first day of the wine year in which the by-product is delivered.
3.For investments referred to in Article 50 of Regulation (EU) No 1308/2013 and the innovation in the wine sector referred to in Article 51 of Regulation (EU) No 1308/2013, the operative event for the exchange rate shall be 1 January of the year in which the decision to grant the aid is taken.
4.For green harvesting operations referred to in Article 47 of Regulation (EU) No 1308/2013, the operative event for the exchange rate shall be the day on which the green harvesting operation takes place.
Article 31U.K.Amounts and payments in the milk and milk products sector
1.For aid granted for supplying certain milk products to pupils as referred to in Article 1 of Commission Regulation (EC) No 657/2008(10), the operative event for the exchange rate shall be the first day of the period to which the payment application referred to in Article 11 of that Regulation relates.
2.For the payment of the levy referred to in Article 1 of Commission Regulation (EC) No 595/2004(11), for a given twelve-month period within the meaning of Chapter III of Title I of Part II of Council Regulation (EU) No 1234/2007(12), the operative event for the exchange rate shall be 1 April following the period concerned.
3.For the transport costs referred to in Article 30(3) of Commission Regulation (EU) No 1272/2009(13), the operative event for the exchange rate shall be the day on which the valid offer has been received by the competent authority.
Article 32U.K.Amounts and payments of aid linked to the implementation of the School Fruit Scheme
For aid granted for the supply of fruit and vegetable, processed fruit and vegetable and banana products to children as referred to in Article 1 of Commission Regulation (EC) No 288/2009(14), the operative event for the exchange rate shall be 1 January preceding the period referred to in Article 4(1) of that Regulation.
Article 33U.K.Minimum price for beet, surplus levy and production charge in the sugar sector
For the production charge on sugar, for the minimum beet price, and for the surplus levy referred to in Articles 128, 135 and 142 respectively of Regulation (EU) No 1308/2013, the operative event for the exchange rate shall be 1 October of the marketing year in respect of which the prices and amounts are applied or paid.
Article 34U.K.Amounts of a structural or environmental character and overheads of operational programmes
1.For the amounts referred to in Annex II to Regulation (EU) No 1305/2013, as well as for the amounts relating to measures approved under Regulation (EC) No 1698/2005, for which the payments to beneficiaries are assured by the rural development programmes approved under Regulation (EU) No 1305/2013, the operative event for the exchange rate shall be 1 January of the year in which the decision to grant the aid is taken.
However, where, under Union rules, payment of the amounts referred to in the first subparagraph is staggered over several years, the operative event for the exchange rate for each of the annual instalments shall be l January of the year for which the instalment in question is paid.
2.For the sums referred to in point 2(a) of Annex IX to Implementing Regulation (EU) No 543/2011, intended to cover overheads specifically related to the operational funds or programmes referred to in Articles 32 and 33 of Regulation (EU) No 1308/2013, the operative event for the exchange rate shall be 1 January of the year to which these overheads relate.
Article 35U.K.Amounts linked to the authorisation to grant national financial assistance to producer organisations in the fruit and vegetables sector and the partial reimbursement of this national financial assistance
1.For the request of the authorisation to grant the national financial assistance referred to in Article 35 of Regulation (EU) No 1308/2013, the operative event shall be the deadline for the submission of the request to the Commission, as laid down in Article 92(1) of Implementing Regulation (EU) No 543/2011.
2.For the Union reimbursement of the national financial assistance according to Article 95 of Implementing Regulation (EU) No 543/2011, the operative event for the exchange rate shall be the deadline for the submission of aid applications by producer organisations to the competent authorities of the Member States according to Article 69(1) of Regulation (EU) No 543/2011.
Article 36U.K.Other amounts and prices
For prices or amounts other than those referred to in Articles 28 to 35, or amounts linked to those prices, expressed in euro in Union legislation, or expressed in euro by a tendering procedure, the operative event for the exchange rate shall be the day on which one of the following legal acts occurs:
for purchases, when the valid offer has been received;
for sales, when the valid offer has been received;
for withdrawals of products in the fruit and vegetables sector, the day on which the withdrawal takes place;
for non-harvesting and green harvesting operations in the fruit and vegetables sector, the day on which the non-harvesting and green harvesting operation takes place;
for costs of transport, processing or public storage and for amounts allocated to studies as part of a tendering procedure, the final day for the submission of tenders;
for the recording of prices, amounts or tenders on the market, the day in respect of which the price, amount or tender is recorded;
for penalties linked to non-compliance with agricultural legislation, the date of the act of the competent authority which establishes the facts;
for turnover or amounts relating to production volumes, the start of the reference period laid down by agricultural legislation.
Article 37U.K.Payment of advances
For advances, the operative event for the exchange rate shall be the operative event applicable to the price or amount to which the advance relates, where this event has occurred by the time the advance is paid, or, in other cases, the date of setting in euro of the advance or, failing that, the date of payment of the advance. The operative event for the exchange rate shall be applied to advances without prejudice to the application to the entire price or amount in question of the operative event for that price or amount.
Article 38U.K.Securities
For securities, the operative event for the exchange rate shall be the date on which the security is lodged.
However, the following exceptions shall apply:
for securities relating to advances, the operative event for the exchange rate shall be the operative event as defined for the amount of the advance, where that event has occurred by the time the security is paid;
for securities relating to the submission of tenders, the operative event for the exchange rate shall be the day on which the tender is submitted;
for securities relating to the performance of tenders, the operative event for the exchange rate shall be the closing date of the invitation to tender.
Article 39U.K.Scrutiny of transactions
The amounts in euro appearing in Chapter III of Title V of Regulation (EU) No 1306/2013 shall be converted, where appropriate, into national currencies by applying the rate of exchange operating on the first working date of the year when the scrutiny period begins and published in the C series of the Official Journal of the European Union.
Article 40U.K.Determination of the exchange rate
When an operative event is fixed under Union legislation, the exchange rate to be used shall be the most recent rate set by the European Central Bank (ECB) prior to the first day of the month in which the operative event occurs.
However, in the following cases, the exchange rate to be used shall be:
for the cases referred to in Article 28(2) of this Regulation in which the operative event for the exchange rate is the acceptance of the customs declaration, the rate referred to in Article 18(1) of Regulation (EEC) No 2913/92;
for intervention expenditure incurred in the context of public storage operations, the rate resulting from the application of Article 3(2) of Commission Delegated Regulation (EU) No 906/2014(15);
for the minimum price for beet referred to in Article 33 of this Regulation, the average rate established by the European Central Bank (ECB) for the month prior to the operative event.
CHAPTER VIU.K. FINAL PROVISION
Article 41U.K.Transitional provisions
1.Where a paying agency, accredited in accordance with Regulation (EU) No 1290/2005, assumes responsibility for expenditure for which it was not previously responsible, it shall be accredited with the new responsibilities by 1 January 2015.
2.The measures listed in the Annex to Regulation (EC) No 1106/2010 shall not be subject to the system of scrutiny established by Chapter III of Title V of Regulation (EU) No 1306/2013 for the purpose of the scrutiny in respect of expenditure prior to financial year 2014.
3.Where in specific legislation reference is made to primary, secondary, or subordinate requirements as referred to in Regulation (EU) No 282/2012, Article 23(2), (3) and (4) of this Regulation shall apply.
4.For the rural development programmes referred to in Article 15 of Regulation (EC) No 1698/2005:
the provisions of Article 38(1) of Regulation (EU) No 1306/2013 shall apply for the budget commitments not used by 31 December of the second year following that of the budget commitment. In Article 38 of that Regulation the references made to year N+3 shall be regarded as references to year N+2;
the interim payments made by the Commission shall be subject, as referred to in point (b) of Article 36(3) of Regulation (EU) No 1306/2013, to no overrun of the total EAFRD contribution to each priority for the entire period covered by the programme concerned;
for the purpose of applying Articles 37 and 38 of Regulation (EU) No 1306/2013, the final eligibility date of expenditure shall be the one laid down in Article 71(1) of Regulation (EC) No 1698/2005.
5.For the purpose of applying Article 54(1) and (2) of Regulation (EU) No 1306/2013, for the cases reported or to be reported to the Commission in respect of financial years 2013 and 2014,as referred to in point (h) of Article 6 of Regulation (EC) No 885/2006, the financial year of the primary finding of irregularity in the sense of Article 35 of Regulation (EC) No 1290/2005 shall continue to be taken into account. For the cases for which no primary administrative or judicial finding of irregularity was established before 16 October 2014, the provisions of Article 54(1) and (2) of Regulation (EU) No 1306/2013 shall apply.
As regards EAFRD, for the purpose of clearing the accounts in accordance with Article 51 of Regulation (EU) No 1306/2013, the provisions of Article 54(2) of that Regulation shall apply starting with the clearance of the accounts for financial year 2014.
Article 42U.K.Amendment to Regulation (EC) No 376/2008
Paragraphs 6 and 7 of Article 34 of Regulation (EC) No 376/2008 are deleted.
However, those provisions shall continue to apply for the securities validly lodged under that Regulation before the entry into force of this Regulation.
Article 43U.K.Amendment to Regulation (EC) No 612/2009
Article 47(3) of Commission Regulation (EC) No 612/2009 is deleted.
However, those provisions shall continue to apply for the securities validly lodged under that Regulation before the entry into force of this Regulation.
Article 44U.K.Repeal
Regulations (EC) No 883/2006, (EC) No 884/2006, (EC) No 885/2006, (EC) No 1913/2006, (EU) No 1106/2010 and (EU) No 282/2012 are repealed.
However, the following shall apply:
Regulation (EU) No 282/2012 shall continue to apply for the securities validly lodged under that Regulation before the entry into force of this Regulation;
Article 4 of Regulation (EC) No 883/2006 shall continue to apply to expenditure effected until 15 October 2014;
Article 11 and Chapter III of Regulation (EC) No 885/2006 shall continue to apply until 31 December 2014.
Article 45U.K.Entry into force and application
This Regulation shall enter into force on the seventh day following that of its publication in the Official Journal of the European Union.
Article 41(4) shall apply from 1 January 2014.
This Regulation shall be binding in its entirety and directly applicable in all Member States.