CHAPTER IV INFORMATION, REPORTS AND CHECKS
SECTION 1 Information and reports
Article 21Information and annual reports from producer groups, producer organisations and associations of producer organisations and annual reports from Member States
1.At the request of the competent authority of the Member State, producer groups formed pursuant to Article 125e of Regulation (EC) No 1234/2007, recognised producer organisations and associations of producer organisations shall provide any relevant information needed for the drawing up of the annual report referred to in Article 54(b) of Delegated Regulation (EU) 2017/891. Member States shall take the measures necessary to gather information on the number of members, the volume and the value of marketed production of producer organisations which have not submitted operational programmes. Producer organisations and producer groups referred to in Article 27 of Regulation (EU) No 1305/2013 shall be requested to provide the number of members, the volume and the value of the marketed production.
2.Producer organisations and associations of producer organisations shall submit annual reports on the implementation of their operational programmes with their applications for aid.
Those annual reports shall concern the following:
(a)the operational programme implemented during the preceding year;
(b)the main amendments to the operational programme; and
(c)differences between estimated aid and aid applied for.
3.The annual report from producer organisations and associations of producer organisations shall indicate:
(a)the achievements of the operational programme, based on the indicators set out in Annex II and, where applicable, additional indicators set out in the national strategy as follows:
common baseline indicators and input (financial) indicators shall be used in each annual report;
result and output indicators shall be used in the last two years of the operational programme; and
(b)a summary of the major problems encountered in managing the programme and the measures taken to ensure the quality and effectiveness of programme implementation.
Where applicable, the annual report shall specify what safeguards have been put in place, in accordance with the national strategy and in application of Article 33(6) of Regulation (EU) No 1308/2013, to protect the environment from possible increased pressures coming from investments supported under the operational programme.
4.The annual report from producer organisations and associations of producer organisations of the last but one year of an operational programme shall show to what extent the objectives pursued by the programmes have been achieved. This report shall also mention factors which contributed to the success or failure of the programme's implementation and the way those factors were taken into account in the ongoing programme or will be taken into account in the following operational programme.
The Member State shall include details of cases referred to in the first subparagraph in its annual report referred to in Article 54(b) of Delegated Regulation (EU) 2017/891.
SECTION 2 Checks
Article 22Unique identification system
Member States shall ensure that a unique identification system applies to producer organisations, associations of producer organisations and producer groups formed pursuant to Article 125e of Regulation (EC) No 1234/2007 with regard to their aid applications. This identification system shall be compatible with the system for the identification of beneficiaries referred to in Article 73 of Regulation (EU) No 1306/2013.
Article 23Submission procedures
Without prejudice to Articles 9, 24 and 25, Member States shall provide for procedures for the submission of aid applications, requests for recognition or approval of operational programmes, as well as payment claims.
Article 24Granting of recognition
1.Prior to granting recognition to a producer organisation or association of producer organisations under Article 154(4)(a) or Article 156(1) of Regulation (EU) No 1308/2013, Member States shall carry out administrative and an on-the-spot checks on the producer organisation or association of producer organisations to verify compliance with the recognition criteria.
2.Member States shall carry out administrative and on-the-spot checks with regard to the recognition criteria which apply to all recognised producer organisations and associations of producer organisations at least once every five years even if the producer organisations or the associations of producer organisations do not implement an operational programme.
Article 25Approval of operational programmes and their amendments
1.Prior to the approval of an operational programme under Article 33 of Delegated Regulation (EU) 2017/891, Member States shall verify, by all the appropriate means, including through on-the-spot checks, the operational programme submitted for approval and the request for amendment, where applicable. Those checks shall in particular concern:
(a)the accuracy of the information referred to in Article 4(1)(a), (b) and (e), which shall be included in the draft operational programme;
(b)compliance of the programme with Article 33 of Regulation (EU) No 1308/2013 as well as with the national strategy and the national framework;
(c)the eligibility of the actions and the eligibility of the expenditure proposed; and
(d)the consistency and technical quality of the programme, the soundness of the estimates and the aid plan, and the planning of its implementation.
2.The checks referred to in paragraph 1 shall verify whether:
(a)targets are measurable and can be monitored and achieved through the proposed actions; and
(b)the operations for which aid is requested are in compliance with the applicable national and Union laws in particular, State aid, rural development and promotion programmes, and obligatory standards established by national legislation or the national strategy.
Article 26Administrative checks
1.The procedures relating to the administrative checks shall require the recording of operations undertaken, the results of the verification and the measures taken in respect of discrepancies.
2.Prior to granting the aid, Member States shall carry out administrative checks on all aid applications.
3.Administrative checks on aid applications shall include, where applicable, a verification of:
(a)the annual report on the execution of the operational programme transmitted together with the aid application;
(b)the value of marketed production, the contributions to the operational fund and the expenditure incurred;
(c)the accurate correlation of expenditure claimed with products and services delivered;
(d)the conformity of the actions undertaken with those included in the approved operational programme; and
(e)the respect of financial or other limits and ceilings imposed.
4.Expenditure incurred under the operational programme shall be supported by proof of payment. Invoices used shall be established in the name of the producer organisation, association of producer organisations or the subsidiary complying with the 90 % requirement referred to in Article 22(8) of Delegated Regulation (EU) 2017/891 or, subject to Member State approval, in the name of one or more of its producer members. However, invoices in respect of the personnel costs referred to in point 2 of Annex III to Delegated Regulation (EU) 2017/891 shall be established in the name of the producer organisation, association of producer organisation, subsidiary complying with the 90 % requirement referred to in Article 22(8) of that Regulation or, subject to Member State approval, cooperatives which are a member of the producer organisation.
Article 27On-the-spot checks on annual aid applications
1.Member States shall carry out on-the-spot checks at the premises of producer organisations, associations of producer organisations and their subsidiaries, where applicable, to ensure compliance with the conditions for recognition, for granting an aid or the balance thereof for the year concerned as referred to in Article 9(1), which shall supplement the administrative checks.
2.The on-the-spot checks shall relate to a sample representing at least 30 % of the total aid applied for each year. Each producer organisation or association of producer organisations implementing an operational programme shall be visited at least once every three years.
3.Member States shall determine the producer organisations to be checked on the basis of a risk analysis that shall take account of the following criteria:
(a)the amount of aid;
(b)the findings of the checks in previous years;
(c)a random parameter; and
(d)other parameters to be determined by Member States.
4.Advance notice of on-the-spot checks may be given, provided that the purpose of the check is not jeopardised.
5.The on-the-spot checks shall cover all the commitments and obligations of the producer organisation or association of producer organisations, its members or subsidiaries, where applicable, which can be checked at the time of the visit and which could not have been checked during the administrative checks. On-the-spot checks shall in particular concern:
(a)the compliance with the recognition criteria for the year concerned;
(b)the implementation of the actions and their consistency with the approved operational programme;
(c)in relation to a relevant number of actions: the compliance of the expenditure with Union law and respect of the deadlines set out therein;
(d)the use of the operational fund, including expenditure declared in claims for advance payments or partial payments, the value of marketed production, the contributions to the operational fund and the expenditure declared as supported by accounting or equivalent documents;
(e)the full delivery of the products by the members, the delivery of the services and the genuineness of the expenditure claimed; and
(f)second level checks as referred to in Article 30 for the expenses of market withdrawals, green harvesting and non-harvesting.
6.The value of marketed production shall be verified on the basis of the financial accounting system as audited and certified in accordance with national law.
To that end, the Member States may decide that the declaration of the value of marketed production shall be certified in the same way as the financial accounting data.
The check on the declaration of the value of marketed production may be carried out before the relevant aid application is transmitted but it shall be carried out at the latest before payment of the aid.
7.Except in exceptional circumstances, the on-the-spot checks shall include a visit to the place where the action is implemented or, if the action is intangible, to the action promoter. In particular, actions on individual holdings of members of producer organisations covered by the sample referred to in paragraph 2 shall be subject of at least one visit to verify their execution.
However, Member States may decide not to carry out such visits for small actions, or where they consider that there is a low risk that the conditions for receiving aid are not fulfilled, or that the operation has not been implemented. The respective decision and its justification shall be recorded. The risk analysis criteria set out in paragraph 3 shall apply mutatis mutandis to this paragraph.
8.Only checks meeting all the requirements of this Article may be counted towards the fulfilment of the checking rate set out in paragraph 2.
9.The results of the on-the-spot checks shall be assessed to establish whether any problems encountered are of a systemic nature, entailing a risk for other similar actions, beneficiaries or bodies. This assessment shall also identify the causes of such situations, any further examination which may be required and the recommended corrective and preventive action.
If the checks reveal significant irregularities in a region or part of a region or for a specific producer organisation or association of producer organisations, the Member State shall carry out additional checks during the year in the region or on the organisation or association concerned and shall increase the percentage of corresponding applications to be checked the following year.
Article 28Reports of on-the-spot checks
1.A detailed report shall be made for each on-the-spot check indicating at least the following information:
(a)the aid scheme and the application checked;
(b)the names and functions of the persons present;
(c)the actions, measures and documents checked, including the audit trail and supporting evidence verified; and
(d)the results of the check.
2.A representative of the producer organisation or association of producer organisations shall be given the opportunity to sign the report to attest his/her presence at the check and to record his/her comments. Where irregularities are found, the beneficiary shall receive a copy of the report.
Article 29First-level checks on withdrawal operations
1.Member States shall carry out first-level checks on withdrawal operations in each producer organisation, comprising of a document and identity check supported by a physical check, of the weight of the products withdrawn from the market and a check on compliance with Article 15, in accordance with the procedures laid down in Chapter II of Title II of Implementing Regulation (EU) No 543/2011. The check shall take place following receipt of the notification referred to in Article 44(1) of Delegated Regulation (EU) 2017/891, within the time limits set in accordance with paragraph 2 of that Article.
2.The first-level checks shall cover 100 % of the quantity of products withdrawn from the market. At the end of this check, the withdrawn products other than those for free distribution, shall be denatured or disposed of to the processing industry under the supervision of the competent authorities under the terms and conditions laid down by the Member State in accordance with Article 46 of Delegated Regulation (EU) 2017/891.
3.By way of derogation from paragraph 2, where the products are for free distribution, Member States may check a smaller percentage than that laid down in that paragraph, provided it is not less than 10 % of the quantities concerned during the marketing year of any given producer organisation. The check may take place at the premises of the producer organisation or at the sites of the recipients of the products. In the event that the checks reveal irregularities, Member States shall carry out additional checks.
Article 30Second-level checks on withdrawal operations
1.Member States shall carry out second-level checks on withdrawal operations at the premises of the producer organisation and of the recipients of the products withdrawn based on a risk analysis. The risk analysis shall include the findings of previous first and second-level checks, and whether or not a producer organisation has some form of quality-assurance procedure. This risk analysis shall serve as the basis to establish the minimum frequency of second-level checks for each producer organisation.
2.The second-level checks referred to in paragraph 1 shall concern:
(a)the specific stock and accounting records to be kept by all producer organisations which carry out withdrawal operations during the marketing year concerned;
(b)the quantities marketed as declared in the aid applications, checking, in particular, the stock and accounting records, the invoices and, ensuring that the declarations tally with the accounting and tax data of the producer organisations concerned;
(c)the accounts, in particular the veracity of net receipts by the producer organisations as declared in their payment applications and the proportionality of any withdrawal costs; and
(d)the destination of withdrawn products as declared in the payment application and their denaturing.
3.Each check shall include a sample representing at least 5 % of the quantities withdrawn by the producer organisation during the marketing year.
4.The specific stock and accounting records referred to in point (a) of paragraph 2 shall show, for each product withdrawn, the quantities moved, expressed in tonnes, of:
(a)the production delivered by members of the producer organisation and by members of other producer organisations in accordance with Article 12(1)(b) and (c) of Delegated Regulation (EU) 2017/891;
(b)sales by the producer organisation, identifying products intended for the fresh market and products for processing; and
(c)products withdrawn from the market.
5.The checks on the destination of products withdrawn from the market shall include:
(a)a sample check on the stock records to be kept by recipients and on the financial accounts of the charitable organisations and institutions concerned where the second subparagraph of Article 46(2) of Delegated Regulation (EU) 2017/891 applies; and
(b)checks on compliance with the relevant environmental requirements.
6.If the second-level checks reveal irregularities, Member States shall carry out more detailed second-level checks for the year concerned and shall increase the frequency of second-level checks at the premises of producer organisations or associations of producer organisations during the following year.
Article 31Green harvesting and non-harvesting
1.Before a green harvesting operation takes place, Member States shall verify by an on-the-spot check that the products concerned are not damaged and the area concerned has been well maintained. After green harvesting, Member States shall verify that the area concerned has been harvested in total and the harvested product has been denatured.
2.Before a non-harvesting operation takes place, Member States shall verify by an on-the-spot check that the area concerned has been well maintained, that no partial harvest has already taken place, that the product is well developed and would in general be sound, fair and of marketable quality.
Member States shall ensure that the production is denatured. If this is not possible, they shall ensure, by an on-the-spot visit or visits during the harvest season, that no harvest takes place.
3.Where the second subparagraph of Article 48(3) of Delegated Regulation (EU) 2017/891 applies:
(a)the requirement provided for in the first subparagraph of paragraph 2 of this Article that no partial harvest has taken place, shall not apply; and
(b)Member States shall ensure that the fruit and vegetable plants on which non-harvesting and green harvesting measures have been undertaken shall not be used for further production purposes in the same production season.
4.Article 30(1), (2), (3) and (6) shall apply mutatis mutandis.
Article 32Transnational producer organisations
1.The Member State in which a transnational producer organisation has its head office shall have overall responsibility for the organisation of checks on that organisation in respect of the operational programme and operational fund and for the application of administrative penalties where such checks demonstrate that obligations have not been met.
2.The other Member States required to provide the administrative co-operation referred to in Article 14(3)(c) of Delegated Regulation (EU) 2017/891 shall carry out such administrative and on–the-spot checks as required by the Member State referred to in paragraph 1 of this Article, and report the results to it. They shall respect the deadlines set by the Member State referred to in paragraph 1.
3.The rules applicable in the Member State referred to in paragraph 1 shall apply in relation to the producer organisation and the operational programme and operational fund. However, in respect of environmental and phytosanitary questions and crisis prevention and management measures, the rules of the Member State where the respective actions take place shall apply.
Article 33Transnational associations of producer organisations
1.The Member State in which a producer organisation which is a member of a transnational association has its head office shall have overall responsibility for the organisation of checks in respect of actions of the operational programme implemented on its territory and of the operational fund and for the application of administrative penalties where such checks demonstrate that obligations have not been met.
2.The Member State referred to in paragraph 1 shall closely co-operate with the Member State in which the transnational association of producer organisations has its head office and notify without delay the results of the checks carried out and possible administrative penalties applied.
3.The Member State in which the transnational association of producer organisations has its head office shall have overall responsibility for the organisation of checks in respect of actions of the operational programme implemented at the level of the transnational association and of the operational fund of the transnational association and for the application of administrative penalties where such checks demonstrate that obligations have not been met. It shall also ensure the coordination of checks and payments in respect of actions of the operational programmes implemented on the territory of the other Member States.
4.The actions of the operational programmes shall comply with the national rules of the Member State where they are actually carried out.
Article 34Checks
Without prejudice to specific provisions of this Regulation or other Union legislation, Member States shall introduce checks and measures to ensure the proper application of Regulation (EU) No 1308/2013, Delegated Regulation (EU) 2017/891 and this Regulation. Those checks and measures shall be effective, proportionate and dissuasive so that they provide adequate protection for the financial interests of the Union.
In particular, Member States shall ensure that:
all eligibility criteria established by Union or national legislation or the national strategy or national framework can be checked;
the competent authorities of the Member State responsible for carrying out checks have a sufficient number of suitably qualified and experienced staff to carry out the checks effectively; and
provision is made for checks to avoid irregular duplicated financing of measures under Regulation (EU) No 1308/2013 in the fruit and vegetables sector and under other Union or national schemes.
Article 35Obvious errors
In cases of obvious errors recognised by the competent authority of the Member State, as referred to in Article 59(6) of Regulation (EU) No 1306/2013, any notification, claim or request made to a Member State under Regulation (EU) No 1308/2013, Delegated Regulation (EU) 2017/891 or this Regulation and any aid application may be corrected and adjusted at any time after its submission.