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15.7.2011 Official
Journal
of
the
European
Union L
185/57
COMMISSION IMPLEMENTING REGULATION (EU) No 679/2011
of 14 July 2011
amending Regulation (EC) No 1974/2006 laying down detailed rules for the application of Council
Regulation (EC) No 1698/2005 on support for rural development by the European Agricultural
Fund for Rural Development (EAFRD)
THE EUROPEAN COMMISSION,
renewed commitments overlap with the following
programming period, it should be provided that
Member States may allow such commitments to be
Having regard to the Treaty on the Functioning of the European
extended to the end of the premium period to which
Union,
the 2013 payment claim refers.
(5) Article
62(1)(b)
of
Regulation
(EC)
No
1698/2005
Having regard to Council Regulation (EC) No 1698/2005 of
provides that, at the decision-making level of the local
20 September 2005 on support for rural development by the
action group, economic and social partners, as well as
European Agricultural Fund for Rural Development (EAFRD) ( 1 ),
other representatives of civil society, are to make up at
and in particular Article 91 thereof,
least 50 % of the local partnership. Member States should
ensure that local action groups comply with this
minimum percentage with respect to voting, too, in
Whereas:
order to prevent the public sector from dominating
decision-making. Furthermore, it should be ensured that
project promoters are not able to influence the project
selection decision. Effective safeguards should therefore
(1) Regulation
(EC)
No
1698/2005
established
a
single
legal
be established to avoid any conflict of interests with
framework for the European Agricultural Fund for Rural
regard to the appraisal and vote on project proposals.
Development (EAFRD) support for rural development
The transparency of the decision making should also
throughout the Union. That legal framework has been
be guaranteed with the appropriate visibility.
complemented by implementing rules laid down by
Commission Regulation (EC) No 1974/2006 ( 2 ). In the
light of experience gained and problems that have arisen
in the implementation of Rural Development
(6) Article
38(2)
of
Regulation
(EC)
No
1974/2006
provides
Programmes it is necessary to amend certain provisions
for the possibility of paying advances for the running
of that Regulation and to introduce certain additional
costs of local action groups. It has been proven that in
implementing rules.
order to ensure the cash flow needs of local action
groups it is necessary to extend the possibility to pay
advances to cover the costs related to acquiring skills
and animating the territory as referred to in
(2) Operations
concerning
the
production
of
renewable
Article 63(c) of Regulation (EC) No 1698/2005.
energy on agricultural holdings pursuant to Article 26
of Regulation (EC) No 1698/2005 may fall outside the
scope of Article 42 of the Treaty. In order to ensure
compliance with agricultural State aid rules, a specific
(7) Article
44(3)
of
Regulation
(EC)
No
1974/2006
allows
provision should be laid down for investments in the
Member States to take specific measures to ensure that
production of renewable energy on agricultural holdings.
minor changes to the situation of a holding do not lead
to inappropriate results in relation to commitments
entered into, in terms of the obligation of the beneficiary
to repay the assistance where a commitment is not taken
(3) Article
27(12)
of
Regulation
(EC)
No
1974/2006
over by the transferee of a part of the holding. In order
provides that adjustment of agri-environment or animal
to ensure legal certainty, a definition should be provided
welfare commitments may take the form of an extension
of what constitutes a minor change in cases where the
of the duration of the commitment. In order to avoid
area of the holding is reduced.
overlapping with the following programming period,
such adjustment should be limited to the end of the
premium period to which the 2013 payment claim
refers.
(8) Article
46
of
Regulation
(EC)
No
1974/2006
provides

for a revision clause in case of amendments to the
baseline for certain measures. A revision clause should
also be provided in case the duration of new agri-
(4) Article
47
of
Regulation
(EC)
No
1698/2005
provides
environment, animal welfare or forest-environmental
that forest-environmental commitments are to be
commitments undertaken for a period between 5 and
undertaken as a general rule for a period between 5
7 years extends beyond the end of the current
and 7 years. In order to avoid a situation in which
programming period, in order to avoid inconsistencies
with the legal and policy framework to be laid down
( 1 ) OJ L 277, 21.10.2005, p. 1.
for the period following the current programming
( 2 ) OJ L 368, 23.12.2006, p. 15.
period.

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L 185/58
EN
Official Journal of the European Union
15.7.2011
(9) In
order
to
clarify
the
application
of
Article
52(1)
of
account of the specific role of regional governments in
Regulation (EC) No 1974/2006, the basis on which the
implementing rural development policy, the possibility
co-financing rate is applied in the case of financial engin
for advance payments provided for in Article 56 of Regu
eering should be set out.
lation (EC) No 1974/2006 should be opened up to
regional authorities as well.
(10) As
regards
guarantee
funds
in
the
context
of
financial
(16) To
facilitate
the
implementation
of
investment
projects
in
engineering under subsection 3 of Section 1 of Chapter
the context of the ongoing economic and financial crisis,
IV of Regulation (EC) No 1974/2006, additional details
the maximum ceiling for advance payments was raised to
on the method of calculating the eligible expenses of the
50 % for investments in 2009 and 2010. In order to take
operation related to such interventions should be
account of the continuing negative effects of the
provided to ensure the most efficient use of Union
economic and financial crisis, this higher ceiling should
resources.
be maintained until the end of the programming period.
In order to ensure continuity in the implementation of
Rural Development Programmes between the end of
2010 and the entry into force of this Regulation, the
(11) While
acknowledging the specificities
of rural devel
relevant provision should be applied retroactively from
opment, relating essentially to the small scale of
1 January 2011.
supported operations, it is necessary, in order to
maximise the leverage effect of the financial engineering
tool, to clarify the reuse of the resources returned to the
financial engineering operation during the programming
(17) To take account of the relatively small size of rural devel
period as well as to make a distinction between it and
opment projects and the difficulty such projects have in
the reuse after the final date of eligibility of the rural
obtaining bank guarantees for advance payments,
development programme.
measures should be taken allowing those guarantees to
be replaced by written guarantees from public authorities.
(12) Taking
into
account
the
nature
of
some
investments
in
(18) To make the best use of advances, it should be left to the
forestry and the fact that payments could in certain cases
competent paying agency to define when guarantees are
be area-related, it should be possible to use standard
released.
costs calculations as an alternative to the invoice-based
system used to determine the level of support for the
measure referred to in Article 27 of Regulation (EC)
(19) Regulation
(EC) No 1974/2006 should therefore be
No 1698/2005. Article 53(1) of Regulation (EC) No
amended accordingly.
1974/2006 should therefore be adapted accordingly.
(20) The
measures
provided
for
in
this
Regulation
are
in
accordance with the opinion of the Rural Development
(13) Article
54(1)
of
Regulation
(EC)
No
1974/2006
provides
for the conditions under which contributions in kind
Committee,
may be considered as eligible expenditure. In its
present form, Article 54(1) considers contributions in
kind to be eligible only for investment operations.
HAS ADOPTED THIS REGULATION:
Experience has shown that this condition is too
restrictive for the efficient implementation of measures.
Therefore, it should be provided that contributions in
Article 1
kind may be eligible for all types of operation.
Regulation (EC) No 1974/2006 is amended as follows:
(14) Article
55
of
Regulation
(EC)
No
1974/2006
lays
down
a
(1) the following Article 16a is inserted:
set of rules for the definition of eligible expenditure for
investment operations. In order to bring additional clarity
to the implementation of this Article, the acquisition of
payment entitlements should be explicitly excluded from
‘Article 16a
eligibility. It should also be clarified that, given their
For the purpose of Article 26 of Regulation (EC) No
nature, investments replacing agricultural production
1698/2005, where investments are made in the
potential after natural disasters constitute eligible expen
production of thermal energy and/or electricity from
diture.
renewable sources on agricultural holdings, renewable
energy production facilities shall be eligible for support
only if their production capacity is no more than
equivalent to the combined average annual energy
(15) In
order
to
increase
the
impact
of
advances
in
the
consumption of thermal energy and electricity on the agri
context of the ongoing financial crisis, taking due
cultural holding, including the farm household.

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EN
15.7.2011 Official
Journal
of
the
European
Union L
185/59
Where investments are made in the production of biofuels
Article 24(6) of Commission Regulation (EU) No
within the meaning of Directive 2009/28/EC of the
65/2011 (*) shall not apply for the payment referred to
European Parliament and of the Council (*) on agricultural
in the first subparagraph.
holdings, renewable energy production facilities shall be
eligible for support only if their production capacity is
no more than equivalent to the annual average transport
___________
fuel consumption on the agricultural holding.
(*) OJ L 25, 28.1.2011, p. 8.’;
___________
(*) OJ L 140, 5.6.2009, p. 16.’;
(6) in Article 44(3), the following subparagraph is added:
‘A reduction in the area of the holding of up to 10 % of
the area under commitment shall be considered as a minor
(2) in Article 27(12), the second subparagraph is replaced by
change for the purpose of the first subparagraph.’;
the following:
(7) in Article 46, the following paragraph is added:
‘Such adjustments may also take the form of an extension
of the duration of the commitment. The extension may
not go beyond the end of the period to which the 2013
‘A revision clause shall be provided from 2012 onwards
payment claim refers.’;
for commitments undertaken for a period of between 5
and 7 years, pursuant to Articles 39, 40 and 47 of Regu
lation (EC) No 1698/2005, which extend beyond the end
(3) the following Article 32a is inserted:
of the current programming period, to allow for their
adjustment to the legal framework of the following
programming period. However, Member States may
decide to introduce such a revision clause already in
‘Article 32a
2011. The second paragraph shall apply also with
For the purpose of Article 47 of Regulation (EC) No
respect to this paragraph.’;
1698/2005, Member States may allow forest-environ
mental commitments to be extended until the end of
the period to which the 2013 payment claim refers.’;
(8) Article 52 is replaced by the following:
‘Article 52
(4) in Article 37, the following paragraph is added:
1. As
regards
financial
engineering
actions
referred
to
in
Article 51 of this Regulation, the expenditure declared to
the Commission in accordance with Article 26(3)(a) of
‘5. For
the
purposes
of
Article
62(4)
of
Regulation
(EC)
Regulation (EC) No 1290/2005 shall be the total expen
No 1698/2005, decisions on the selection of projects by
diture paid in establishing or contributing to such funds.
the decision-making body of local action groups shall be
taken by a vote in which the economic and social partners
as well as other representatives of the civil society, as
provided for in Article 62(1)(b) of that Regulation, shall
However, when paying the balance and closing the rural
make up at least 50 % of the votes. As regards the
development programme in accordance with Article 28 of
decision-making process with regard to project selection,
Regulation (EC) No 1290/2005, the eligible expenditure
appropriate rules to guarantee transparency and to avoid
shall be the total of:
situations of conflicts of interest shall be respected.’;
(a) any payment for investment in enterprises out of each
of the funds concerned, or any guarantees provided
(5) in Article 38, paragraph 2 is replaced by the following:
including amounts committed as guarantees by
guarantee funds;
‘2. Member
States
may,
upon
request,
pay
an
advance
to local action groups. The amount of the advance shall
(b) eligible management costs.
not exceed 20 % of the public aid related to the costs
referred to in Article 63(c) of Regulation (EC) No
1698/2005, and its payment shall be subject to the estab
The co-financing rate to be applied shall correspond to the
lishment of a bank guarantee or an equivalent guarantee
co-financing rate of the measure to which the fund
corresponding to 110 % of the amount of the advance.
contributes. If the fund contributes to several measures
The guarantee shall be released upon closure of the local
with different co-financing rates, these rates shall apply
development strategy at the latest.
at the ratio of the respective eligible expenditure.

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L 185/60
EN
Official Journal of the European Union
15.7.2011
The difference between the EAFRD contribution actually
cash payment supported by invoices or documents of
paid pursuant to the first subparagraph and the eligible
equivalent probative value is made, may be eligible expen
expenditure under points (a) or (b) of the second
diture provided that the following conditions are fulfilled:’;
subparagraph shall be cleared in the context of the
annual accounts of the last year of implementation of
the programme. These accounts shall include the detailed
financial information needed.
(11) Article 55(2) is replaced by the following:
‘2. In the case of agricultural investments, the purchase
2. Where
EAFRD
co-finances
operations
comprising
of agricultural production rights, payment entitlements,
guarantee funds for repayable investments pursuant to
animals, annual plants and their planting shall not be
Article 50 of this Regulation, an appropriate ex ante
eligible for investment support.
assessment of expected losses shall be carried out, taking
into account current market practices for similar
operations for the type of investments and market
Simple replacement investments shall not be eligible
concerned. The assessment of the expected losses may
expenditure.
be reviewed, if justified by subsequent market conditions.
The resources committed to honour guarantees shall
reflect such an assessment.
However, in cases of restoration of agricultural production
potential damaged by natural disasters pursuant to
Article 20(b)(vi) of Regulation (EC) No 1698/2005, expen
diture for the purchase of animals and replacement
3. Resources
returned
to
the
operation
during
the
investments may be eligible expenditure.’;
programming period from investments undertaken by
funds or left over after a guarantee has been honoured
shall be reused by the fund according to the funding
agreement referred to in Article 51(6) of this Regulation
(12) Article 56 is replaced by the following:
or cleared in the context of the annual accounts. After the
final date of eligibility of the rural development
programme, resources returned to the operation from
‘Article 56
investments undertaken by funds or left over after all
guarantees have been honoured shall be used by the
1. By
way
of
derogation
from
Article
24(6)
of
Regu
Member States concerned for the benefit of individual
lation (EU) No 65/2011, Member States may, upon
undertakings.
request, pay an advance to the beneficiaries of investment
support. As regards public beneficiaries, such an advance
may be paid to municipalities and associations thereof, to
regional authorities and to public law bodies.
Interest generated by payments from rural development
programmes to funds shall be used according to the first
subparagraph.’;
2. The
amount
of
the
advances
shall
not
exceed
50
%
of the public aid related to the investment, and its
payment shall be subject to the establishment of a bank
guarantee or an equivalent guarantee corresponding to
(9) in Article 53(1), the first subparagraph is replaced by the
110 % of the amount of the advance.
following:
A facility provided as a guarantee by a public authority
shall be considered equivalent to the guarantee referred to
‘Where appropriate, Member States may fix the level of
in the first subparagraph, provided that the authority
support provided for in Articles 27, 31, 37 to 41 and 43
undertakes to pay the amount covered by that guarantee
to 49 of Regulation (EC) No 1698/2005 on the basis of
should entitlement to the advance paid not be established.
standard costs and standard assumptions of income
foregone.’;
3. The
guarantee
may
be
released
when
the
competent
paying agency establishes that the amount of actual expen
diture corresponding to the public aid related to the
(10) in Article 54(1), the introductory phrase of the first
investment exceeds the amount of the advance.’.
subparagraph is replaced by the following:
Article 2
‘Contributions in kind from a public or private beneficiary,
This Regulation shall enter into force on the third day following
namely the provision of goods or services for which no
its publication in the Official Journal of the European Union.

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EN
15.7.2011 Official
Journal
of
the
European
Union L
185/61
Article 1(12), as concerns the first subparagraph of Article 56(2) of Regulation (EC) No 1974/2006, shall
apply from 1 January 2011.
This Regulation shall be binding in its entirety and directly applicable in all Member States.
Done at Brussels, 14 July 2011.
For the Commission
The President
José Manuel BARROSO

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