
Article 1 

1. The Member States which have applied reductions of direct payments as provided for in Article 4 of Regulation (EC) No 1259/1999 may, in addition to the reductions under Article 10 of Regulation (EC) No 1782/2003, apply an additional reduction up to the rate estimated each year to be required to cover the difference between the amount available as a result of the reductions under that Article 10 of Regulation (EC) No 1782/2003 and the amount necessary to finance the expenditure for accompanying measures under Council Regulation (EC) No 1257/1999, for which the allocation and use of additional Community support have been approved until 31 December 2005.
2. The overall reduction of support to a farmer in respect of a given calendar year, resulting from the application of paragraph 1, shall not exceed 20 % of the total amount which would, but for that paragraph and Article 10 of Regulation (EC) No 1782/2003, be granted to the farmer in respect of the calendar year concerned.
3. The accompanying measures referred to in paragraph 1 shall be measures under Articles 10 to 12 (early retirement), Articles 13 to 21 (less-favoured areas and areas with environmental restrictions), Articles 21a to 21d (meeting standards), Articles 22 to 24 (agri-environment and animal welfare), Articles 24a to 24d (food quality) and Article 31 (afforestation) of Regulation (EC) No 1257/1999.
4. The additional reduction provided for in paragraph 1 may be applied at regional level.
5. The provisions set out in Article 48(2) of Commission Regulation (EC) No 817/2004 shall apply, mutatis mutandis, for the approval of the allocation and use of amounts withheld in accordance with paragraph 1.
Article 2 
Without prejudice to Article 77 of Commission Regulation (EC) No 796/2004, the amount of the additional reduction provided for in Article 1 shall be calculated on the basis of the amounts of direct payments to which a farmer would be entitled before any reductions or exclusions are applied under Articles 6 and 24 of Regulation (EC) No 1782/2003 or, in the case of aid schemes listed in Annex I of that Regulation but not falling under titles III and IV of that Regulation, under the specific legislation applicable thereto.
Article 3 

1. Amounts withheld in accordance with Article 1 of this Regulation and Article 4 of Regulation (EC) No 1259/1999 shall be used for the payment of additional Community support at the latest by the end of the fourth financial year following that during which they are withheld.
2. The percentage of Community contribution to measures financed by amounts withheld in accordance with Article 1 shall be the same as that provided in the rural development programming document for the measure concerned.
3. A multiannual action shall not be alternately funded one year by the Community support referred to in Article 48(1)(a) of Regulation (EC) No 817/2004 and another year by funds resulting from the additional reduction under this Regulation.However, where the funds resulting from reduction under this Regulation are exhausted, the Member State may finance the multiannual action until it expires under the EAGGF ‘Guarantee’ Section according to Regulation (EC) No 1257/1999.
Article 4 
The provisions laid down in Articles 2 and 3(6a)(b) of Regulation (EC) No 296/96 shall apply, mutatis mutandis, to the accounting of amounts withheld and expenditure generated under this Regulation.
Article 5 
Member States shall, by 30 September each year, submit to the Commission an update of the allocation of amounts withheld in accordance with Article 1 together with the statement of expenditure referred to in Article 55 of Regulation (EC) No 817/2004.
Article 6 
Article 1(1) of Regulation (EC) No 963/2001 is replaced by the following
'
1. Amounts withheld in accordance with Article 3(2) of Regulation (EC) No 1259/1999 shall be used for the payment of additional Community support provided for in Article 5(2) of that Regulation at the latest by the end of the third financial year following that during which they are withheld.'.
Article 7 
Article 6 of Regulation (EC) No 296/96 is replaced by the following:
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Article 6 
Amounts withheld in accordance with Articles 3 and 4 of Regulation (EC) No 1259/1999 or Article 1 of Commission Regulation (EC) No 1655/2004 and the possible interest thereon which have not been paid pursuant to Article 1 of Regulation (EC) No 963/2001 or Article 3(1) of Regulation (EC) No 1655/2004 shall be deducted from the advances related to the expenditure of October of the financial year concerned.'.
Article 8 
This Regulation shall enter into force on the third day following that of its publication in the Official Journal of the European Union.
It shall apply from 1 January 2005. However, Articles 3(1) and 6 shall apply from 15 October 2004.
This Regulation shall be binding in its entirety and directly applicable in all Member States.Done at Brussels, 22 September 2004.
For the Commission
Franz FISCHLER
Member of the Commission