
COMMISSION DECISION of 28 April 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) 1702) (Only the Spanish, German, Greek, English, French, Italian, Dutch, Portuguese, Finnish and Swedish texts are authentic) (2006/334/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, 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, 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 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.

(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) Pursuant to 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 judgements of the Court of Justice in cases pending on 25 November 2005 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 Kingdom of Belgium, the Federal Republic of Germany, the Kingdom of Spain, the French Republic, the Hellenic Republic, the Italian Republic, the Kingdom of the Netherlands, the Portuguese Republic, the Republic of Finland, the Kingdom of Sweden and the United Kingdom of Great Britain and Northern Ireland.
Done at Brussels, 28 April 2006.
For the Commission
Mariann FISCHER BOEL
Member of the Commission
ANNEX

Total correctionsSector Member State Budget item Reason Nat. Currency Expenditure to exclude from financing Deductions already made Financial impact of this decision Financial year
Milk and milk products BE 2040 Control deficiencies: 5 % flat-rate correction. Incorrect treatment of result of physical checks: one-off correction EUR -5 851 253,86 0,0 -5 851 253,86 2001-2003
 Total BE    -5 851 253,86 0,0 -5 851 253,86 
Milk and milk products DE 2040 Non-compliance with the requirement to perform unannounced checks. 10 % flat-rate correction (1 operator) EUR -396 063,56 0,0 -396 063,56 2002-2004
 Total DE    -396 063,56 0,0 -396 063,56 
Fruit and vegetables GR 1515 Partial annulment of Commission Decision 2002/881/EC, amount to be reimbursed to Greece. EUR 623 385,74 0,0 623 385,74 1998-2000
Public storage GR 3231 Partial annulment of Commission Decision 2003/102/EC, amount to be reimbursed to Greece. EUR 9 926 005,21 0,0 9 926 005,21 1999-2001
Irregularities GR Miscellaneous Partial annulment of Commission Decision 2003/481/EC, amount to be reimbursed to Greece. EUR 41 884,9 0,0 41 884,9 
 Total GR    10 591 275,85 0,0 10 591 275,85 
Public storage ES 2111, 2112, 2113, 2114 Control deficiencies: 5 % flat-rate correction EUR -2 763 696,91 0,0 -2 763 696,91 2001-2003
Animal premiums ES 2220, 2221, 2222 Premium paid to farmers not having the minimum quota rights. One-off correction EUR -78 720,15 0,0 -78 720,15 2003-2004
Rural development ES 4000, 4010 Various shortcomings in the management and control system. 5 % flat-rate correction EUR -135 394,0 0,0 -135 394,0 2002-2003
Financial audit ES Miscellaneous Partial annulment of Commission Decision 2002/461/EC, amount to be reimbursed to Spain. EUR 451 482,55 0,0 451 482,55 2001
 Total ES    -2 526 328,51 0,0 -2 526 328,51 
Milk and milk products FI 2040 Control w eakness. 5 % flat-rate correction (1 operator) EUR -65 903,93 0,0 -65 903,93 2002-2003
Ceiling overshoot FI 2128 Overshoot of financial ceilings EUR -6 820,82 -6 820,82 0,0 2003
 Total FI    -72 724,75 -6 820,82 -65 903,93 
Fruit and vegetables FR 1508 Aid over-estimated (calculated on the basis of quantities loaded rather quantities marketed), non-application of sanction in respect of claim submitted after the deadline: one-off correction. Non-performance of several key controls: 10 % flat-rate correction EUR -32 072 056,72 0,0 -32 072 056,72 2002-2004
Public storage FR 2111, 2112, 2113, 2114 Control deficiencies: 5% flat-rate correction. Payment delays: one-off correction EUR -7 135 187,5 0,0 -7 135 187,5 2001-2003
Rural development FR 4040 Incorrect application of a procedure for verifying one of the conditions of eligibility. One-off correction EUR -870 374,0 0,0 -870 374,0 2002
 Total FR    -40 077 618,22 0,0 -40 077 618,22 
Fruit and vegetables IT 1501, 1502, 1515 Non-application of sanctions, deficiencies in controls on composting and bio-degradation. 10 % flat-rate correction and one-off correction EUR -30 021 060,0 0,0 -30 021 060,0 1999-2002
Fruit and vegetables IT 1512 Non-compliance with payment deadlines. One-off correction EUR -4 414 265,04 0,0 -4 414 265,04 2002
Fruit and vegetables IT 1502 Key controls are not applied in the number, frequency, or depth required by the regulations. 5 % flat-rate correction EUR -7 708 059,4 0,0 -7 708 059,4 2000-2003
Milk and milk products IT 2040 Non-compliance with the regulations: one-off correction. Control deficiencies: 5 % flat-rate correction. Non-compliance with minimum rate of control: 10 % flat-rate EUR -297 002,44 0,0 -297 002,44 2002-2004
Arable crops IT 1040-1062, 1310, 1858 Failure to apply sanctions. 3 % flat-rate correction EUR -7 975 231,0 0,0 -7 975 231,0 2002
Arable crops IT 1040-1060, 1310, 1858 Poor quality of classical field inspections. 5 % flat-rate correction EUR -603 692,0 -36 829,0 -566 863,0 2001-2003
Rural development IT 4000, 4010, 4040 Weaknesses in the management, control and sanctions system. 2 % flat-rate correction EUR -3 748 761,0 0,0 -3 748 761,0 2001-2002
Payment deadline IT Miscellaneous Failure to meet payment deadlines EUR -30 938 245,66 -31 631 666,68 693 421,02 2003
 Total IT    -85 706 316,54 -31 668 495,68 -54 037 820,86 
Milk and milk products NL 2040 Unsatisfactory sampling procedure: 10 % flat-rate correction (1 operator). Incorrect treatment of result of physical checks: one-off correction EUR -158 235,6 0,0 -158 235,6 2002-2003
 Total NL    -158 235,6 0,0 -158 235,6 
Fat PT 1400, 1402 The control system put in place w as not adequate to prevent irregular practices on the part of all the actors concerned in the flax sector. 100 % financial correction EUR -3 135 348,71 0,0 -3 135 348,71 2001
 Total PT    -3 135 348,71 0,0 -3 135 348,71 
Arable crops SE 1040, 1062, 1310 Shortcomings in the application of the rules regarding set-aside, incorrect application of technical tolerances, obvious errors applied over-generously. One-off correction. SEK -1 308 192,0 0,0 -1 308 192,0 2001-2002
 Total SE    -1 308 192,0 0,0 -1 308 192,0 
Financial audit UK Miscellaneous Unidentified corrections to be credited to EAGGF. One-off correction GBP -497 130,69 0,0 -497 130,69 2004
 Total UK    -497 130,69 0,0 -497 130,69 