
Article 1 
Regulation (EC) No 885/2006 is amended as follows:

((1)) in Article 9, the following paragraph 5 is added:
'
5. The supporting documents referred to in paragraphs 1 to 4 shall be kept at the disposal of the Commission either in paper form, in electronic form and/or in both forms.Documents may only be kept exclusively in electronic form if the national law of the Member State concerned permits the use of electronic documents as evidence of the underlying transactions in national court proceedings.If the documents are kept in electronic form only, the system for doing so shall comply with point 3(B) of Annex I.';
((2)) in Article 10(2), the second sentence of the second subparagraph is replaced by the following:
‘The Commission shall deduct that amount from or add it to the first payment for which the declaration of expenditure is submitted by the Member State after the decision pursuant to Article 30 of Regulation (EC) No 1290/2005 has been adopted.’;
((3)) Article 11 is amended as follows:

((a)) in paragraph 3, the following fourth subparagraph is added:
'The Commission may, at any stage, terminate the procedure, without financial consequences for the Member State concerned, if it expects that the possible financial effects of non-compliance identified as a result of an inquiry referred to in paragraph 1 would not exceed EUR 50 000 and 10 % of the relevant expenditure or the amounts to be recovered.';
((b)) in paragraph 4, the second and the third subparagraphs are replaced by the following:
'As regards the EAFRD, the deductions from Union financing shall be made by the Commission from the payment for which the declaration of expenditure is submitted by the Member State after the decision pursuant to Article 31 of Regulation (EC) No 1290/2005 has been adopted.However, at the Member State’s request and after consultation of the Committee on the Agricultural Funds, the Commission may adopt a decision:
((a)) setting a different date for the deductions or authorising their reimbursement in one or more instalments where this is warranted by the materiality of the deductions included in an implementing act adopted on the basis of Article 31 of Regulation (EC) No 1290/2005; or
((b)) deferring, until the end of a period of maximum 18 months from the date of its adoption, the execution of all deductions to be executed during this period and at the same time authorising their execution after the end of the deferral in a maximum of three equal annual instalments, for those Member States which are subject to financial assistance under Council Regulation (EC) No 332/2002, Council Regulation (EU) No 407/2010, the European Financial Stability Facility Framework Agreement signed on 7 June 2010 or the Treaty establishing the European Stability Mechanism.The time period of deferral referred to in point (b) of the third subparagraph cannot be prolonged and no further decision authorising a deferral can be adopted in relation to the same Member State. The Member State benefiting from a deferral decision shall ensure that the deficiencies which have been the reasons for the deductions and which still persist at the time of the adoption of the deferral decision are being remedied on the basis of an action plan, established in consultation with the Commission, with clear progress indicators. If the Member State fails to take the necessary actions to remedy those deficiencies as foreseen in the action plan, if the progress of the remedial actions is not sufficient according to the progress indicators or if the outcome of the action is not satisfactory the Commission shall revoke its decision deferring the date for the execution of the deductions while respecting the principle of proportionality.'.
Article 2 
This Regulation shall enter into force on the seventh day following that of its publication in the Official Journal of the European Union.
This Regulation shall be binding in its entirety and directly applicable in all Member States.Done at Brussels, 2 May 2012.
For the Commission
The President
José Manuel BARROSO