A total of €414 million of EU agricultural policy funds unduly spent by Member States is being claimed back by the European Commission today under the so-called clearance of accounts procedure. Member States are responsible for paying out and checking expenditure under the Common Agricultural Policy (CAP), and the Commission is required to ensure that Member States have made correct use of the funds. This money returns to the EU budget because of non-compliance with EU rules or inadequate control procedures on agricultural expenditure. Formally speaking, because some of these amounts have already been recovered from the Member States the net financial impact of today’s decision will be some €393 million.
Main financial corrections
Under this latest decision, funds will be recovered from 22 Member States: Belgium, Bulgaria, Czech Republic, Denmark, Germany, Ireland, Greece, Spain, France, Italy, Cyprus, Lithuania, Hungary, Malta, the Netherlands, Poland, Romania, Slovenia, Slovakia, Finland, Sweden and the United Kingdom. The most significant individual corrections are:
- € 111.7 million (net financial impact1 : €99.4 million) charged to UK – England for weaknesses in the Land Parcel Identification and Geographic Information Systems (LPIS-GIS), in the processing of applications, in administrative cross checks and in on-the-spot controls with regard to area aid;
- € 48.3 million (net financial impact1 : €48.1 million) charged to Italy for infringements in cross compliance: poor control of several statutory management requirements (SMRs), three undefined good agricultural and environmental conditions (GAECs) and incorrect application of sanctions;
- € 40.6 million charged to Spain for shortcomings in the management and control of export refunds: deficient ex-ante checks on beef, weaknesses in execution of physical checks, inadequate checks on production and stock of sugar, advance notice of physical checks given to the exporters;
- € 34.4 million charged to Poland for weaknesses in the management of the early retirement scheme under the European Agricultural Fund for Rural development (EAFRD);
- € 29 million charged to France for deficiencies in the on-the-spot controls in Natural Handicaps and Agri-environment measures under the EAFRD;
- € 17.9 million charged to Italy for a gravely deficient control system and fraud in the citrus processing sector;
- € 17.7 million (net financial impact2 : €15.7 million) charged to UK – Northern Ireland for weaknesses in LPIS-GIS, on-the-spot checks, payments and sanctions with regard to area aid;
- € 16 million charged to Spain for deficiencies in the allocation of entitlements to beneficiaries for area aid;
- € 12.5 million charged to Romania for weaknesses in the controls of beneficiaries’ eligibility and expenses as well as for deficiencies in the application of sanctions in the “Modernisation of agricultural holdings” measure under the EAFRD.
Member States are responsible for managing most CAP payments, mainly via their paying agencies. They are also in charge of controls, for example verifying farmer’s claims for direct payments. The Commission carries out over 100 audits every year, verifying that Member State controls and responses to shortcomings are sufficient. The Commission has the power to claw back funds in arrears if audits show that Member State management and control is not good enough to guarantee that EU funds have been spent properly.