Commission Decision

of 27 July 2006

excluding from Community financing certain expenditure incurred by the Member States under the Guarantee Section of the European Agricultural Guidance and Guarantee Fund (EAGGF)

(notified under document number C(2006) 3331)

(Only the Spanish, Greek, English, French, Italian and Portuguese texts are authentic)

(2006/554/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Community,

Having regard to Council Regulation (EEC) No 729/70 of 21 April 1970 on the financing of the common agricultural policy [1], and in particular Article 5(2)(c) thereof,

Having regard to Council Regulation (EC) No 1258/1999 of 17 May 1999 on the financing of the common agricultural policy [2], and in particular Article 7(4) thereof,

Having consulted the Fund Committee,

Whereas:

(1) Article 5 of Regulation (EEC) No 729/70, Article 7 of Regulation (EC) No 1258/1999, and Article 8(1) and (2) of Commission Regulation (EC) No 1663/95 of 7 July 1995 laying down detailed rules for the application of Council Regulation (EEC) No 729/70 regarding the procedure for the clearance of the accounts of the EAGGF Guarantee Section [3] provide that the Commission is to make the necessary verifications, inform the Member States of its findings, take account of the Member States' comments, initiate bilateral discussions with a view to reaching agreement with the Member States concerned and then formally communicate its conclusions to them, referring to Commission Decision 94/442/EC of 1 July 1994 setting up a conciliation procedure in the context of the clearance of the accounts of the European Agricultural Guidance and Guarantee Fund (EAGGF) Guarantee Section [4].

(2) The Member States have had an opportunity to request that a conciliation procedure be initiated. That opportunity has been used in some cases and the report issued on the outcome has been examined by the Commission.

(3) Under Articles 2 and 3 of Regulation (EEC) No 729/70 and Article 2 of Regulation (EC) No 1258/1999, only refunds on exports to third countries and intervention to stabilise agricultural markets, granted and undertaken respectively according to Community rules within the framework of the common organisation of the agricultural markets, may be financed.

(4) In the light of the checks carried out, the outcome of the bilateral discussions and the conciliation procedures, part of the expenditure declared by the Member States does not fulfil these requirements and cannot, therefore, be financed under the EAGGF Guarantee Section.

(5) The amounts that are not recognised as being chargeable to the EAGGF Guarantee Section should be indicated. Those amounts do not relate to expenditure incurred more than twenty-four months before the Commission's written notification of the results of the checks to the Member States.

(6) As regards the cases covered by this Decision, the assessment of the amounts to be excluded on grounds of non-compliance with Community rules was notified by the Commission to the Member States in a summary report on the subject.

(7) This Decision is without prejudice to any financial conclusions that the Commission may draw from the judgments of the Court of Justice in cases pending on 5 April 2006 and relating to its content,

HAS ADOPTED THIS DECISION:

Article 1

The expenditure itemised in the Annex hereto that has been incurred by the Member States' accredited paying agencies and declared under the EAGGF Guarantee Section shall be excluded from Community financing because it does not comply with Community rules.

Article 2

This Decision is addressed to the Hellenic Republic, the Kingdom of Spain, the French Republic, Ireland, the Italian Republic, the Portuguese Republic and the United Kingdom of Great Britain and Northern Ireland.

Done at Brussels, 27 July 2006.

For the Commission

Mariann Fischer Boel

Member of the Commission

[1] OJ L 94, 28.4.1970, p. 13. Regulation as last amended by Commission Regulation (EC) No 1287/95 (OJ L 125, 8.6.1995, p. 1).

[2] OJ L 160, 26.6.1999, p. 103.

[3] OJ L 158, 8.7.1995, p. 6. Regulation as last amended by Regulation (EC) No 465/2005 (OJ L 77, 23.3.2005, p. 6).

[4] OJ L 182, 16.7.1994, p. 45. Decision as last amended by Decision 2001/535/EC (OJ L 193, 17.7.2001, p. 25).

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ANNEX

Member State | Audit Field | Reason | Correction | Currency | Expenditure to exclude from financing | Deductions already made | Financial impact of this decision | Financial year |

ES | Arable crops | Absence of a computerised LPIS | flat-rate 2 % | EUR | ‘�3299,48 | 0,00 | ‘�3299,48 | 1999-2000 |

ES | Arable crops | Deficient aid application procedure | flat-rate 5 % | EUR | ‘�024643,26 | 0,00 | ‘�024643,26 | 2002-2004 |

ES | Arable crops | Non-application of penalties | flat-rate 2 % | EUR | ‘�16545,67 | 0,00 | ‘�16545,67 | 2003-2004 |

ES | Animal premiums ‘�OTMS | Animals subject of financing for both purchase and destruction | one-off | EUR | ‘�56180,00 | 0,00 | ‘�56180,00 | 2002 |

ES | Animal premiums ‘�OTMS | Non-reliable administrative and accounting system to monitor and account for animals | flat-rate 10 % | EUR | ‘�60692,00 | 0,00 | ‘�60692,00 | 2001 |

ES | Butterfats in food processing | Overtracing ‘�aid paid for part of tracers added | one-off 1,5 % | EUR | ‘�44902,68 | 0,00 | ‘�44902,68 | 2002-2005 |

ES | Fruit and Veg ‘�Bananas | Weaknesses in the determination of marketed quantities, non-representative sampling in quality controls | flat-rate 2 % | EUR | ‘�291087,63 | 0,00 | ‘�291087,63 | 2002-2004 |

ES | Fruit and Veg ‘�processing of peaches & pears | Non-compliance with payment deadlines | one-off | EUR | ‘�43142,42 | 0,00 | ‘�43142,42 | 2002 |

ES | POSEI | Non-compliance with key controls | flat-rate 5 % | EUR | ‘�15161,50 | 0,00 | ‘�15161,50 | 2003-2004 |

ES | POSEI | Non-compliance with payment deadlines | one-off | EUR | ‘�931651,61 | 0,00 | ‘�931651,61 | 2003-2004 |

ES | Wine ‘�production potential | Deficiencies in managing production potential | flat-rate 10 % | EUR | ‘�3357596,61 | 0,00 | ‘�3357596,61 | 2001-2004 |

Total ES | | | | | ‘�6484902,86 | 0,00 | ‘�6484902,86 | |

FR | Arable crops | Application of the rate of irrigation in wet regions | one-off | EUR | ‘�874178,00 | 0,00 | ‘�874178,00 | 2001-2003 |

FR | Arable crops | Parcels not eligible for aid after grubbing of vines | one-off | EUR | ‘�6610625,00 | 0,00 | ‘�6610625,00 | 2001-2005 |

FR | Arable crops | Meadows turned over in wet regions | one-off | EUR | ‘�2521275,00 | 0,00 | ‘�2521275,00 | 2001-2005 |

FR | Arable crops | Penalties for aid paid unduly | one-off | EUR | ‘�0128846,00 | 0,00 | ‘�0128846,00 | 2001-2005 |

FR | Olive oil ‘�Production aid | Key controls not applied with sufficient rigour | flat-rate 2 % | EUR | ‘�56181,66 | 0,00 | ‘�56181,66 | 2002-2004 |

FR | Rural Development Guarantee new measures | Weakenesses in key and secondary controls | flat-rate 5 % | EUR | ‘�349136,00 | 0,00 | ‘�349136,00 | 2001-2002 |

FR | Rural Development Guarantee new measures | Weaknesses in controls on reduced-interest loans | flat-rate 5 % | EUR | ‘�331384,00 | 0,00 | ‘�331384,00 | 2001-2002 |

Total FR | | | | | ‘�5971625,66 | 0,00 | ‘�5971625,66 | |

UK | Butterfats in food processing | Insufficient quantity controls on manufactured quantities | flat-rate 5 % | GBP | ‘�351441,25 | 0,00 | ‘�351441,25 | 2001-2004 |

UK | Butterfats in food processing | Overtracing ‘�aid paid for part of tracers added | one-off | GBP | ‘�5534,20 | 0,00 | ‘�5534,20 | 2002-2004 |

UK | Export refunds and food aid outside the EU | Deficiency in the scheduling regime | flat-rate 2 % | GBP | ‘�50887,47 | 0,00 | ‘�50887,47 | 2001-2003 |

UK | Export refunds and food aid outside the EU | Failure to carry out the required number of substitution controls | flat-rate 5 % | GBP | ‘�314,57 | 0,00 | ‘�314,57 | 2000-2001 |

Total UK | | | | | ‘�665177,49 | 0,00 | ‘�665177,49 | |

GR | RD Guarantee accompanying maeasures | Key controls inadequately applied | flat-rate 5 % | EUR | ‘�795865,00 | 0,00 | ‘�795865,00 | 2004 |

GR | RD Guarantee accompanying measures | Key controls inadequately applied | flat-rate 10 % | EUR | ‘�271694,00 | 0,00 | ‘�271694,00 | 2002-2003 |

GR | RD Guarantee accompanying measures | Various weaknesses in the system for management, control and penalties | flat-rate 5 % | EUR | ‘�460070,00 | 0,00 | ‘�460070,00 | 2004 |

Total EL | | | | | ‘�4527629,00 | 0,00 | ‘�4527629,00 | |

IE | Animal premiums ‘�OTMS | Administrative deficiencies | flat-rate 2 % | EUR | ‘�70297,64 | 0,00 | ‘�70297,64 | 2001-2003 |

Total IE | | | | | ‘�70297,64 | 0,00 | ‘�70297,64 | |

IT | Fruit and vegtable ‘�Withdrawals | Inadequate rate of controls on composting and bio-degradation | one-off 100 % | EUR | ‘�107445,49 | 0,00 | ‘�107445,49 | 2000-2002 |

IT | Fruit and vegtable ‘�Withdrawals | Several weaknesses in the system of checks as instituted | flat-rate 5 % | EUR | ‘�04839,45 | 0,00 | ‘�04839,45 | 2001-2003 |

IT | Public storage of meat | Late payments | one-off | EUR | ‘�575,54 | 0,00 | ‘�575,54 | 2001 |

IT | Public storage of meat | Presence of specified risk material, removal of neck muscle, acceptance of ineligible carcases, poor storage conditions, labelling failings, reporting failings and inspection weaknesses | flat-rate 5 % | EUR | ‘�635067,09 | 0,00 | ‘�635067,09 | 2001-2003 |

Total IT | | | | | ‘�2051927,57 | 0,00 | ‘�2051927,57 | |

PT | Fruit and vegetable ‘�Bananas | Deficiencies in the system for checking quantities eligible for aid and in the system for checking full payment of aid to beneficiaries, lack of oversight over delegated checks | flat-rate 2 % | EUR | ‘�57901,65 | 0,00 | ‘�57901,65 | 2002-2004 |

Total PT | | | | | ‘�57901,65 | 0,00 | ‘�57901,65 | |

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