Explanatory Memorandum to COM(2007)122 - Amendment of Regulation (EC) No 1290/2005 on the financing of the common agricultural policy - Main contents
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| dossier | COM(2007)122 - Amendment of Regulation (EC) No 1290/2005 on the financing of the common agricultural policy. |
|---|---|
| source | COM(2007)122  |
| date | 20-03-2007 |
- Grounds for and objectives of the proposal
The requirement on the publication of information on beneficiaries of Community funds, as inserted into the Financial Regulation by Council Regulation (EC, Euratom) No 1995/2006 of 13 December 2006, provides that the necessary details shall be laid down in the relevant sector-specific rules. In order to implement this obligation, it is necessary to modify Council Regulation (EC) No 1290/2005 on the financing of the common agricultural policy. Furthermore, a number of outstanding problems regarding the effective application of the Regulation are addressed.
The following issues are therefore included in this proposal:
The principles included contain the following:
- as regards EAGF expenditure, a split between direct payments and other funding,
- as regards EAFRD expenditure, one single amount of total public funding,
- ex-post annual publication per budget year,
- publication to cover EAFRD expenditure effected as of 1 January 2007 and EAGF expenditure effected as of 16 October 2007,
- publication by Member States at national level.
The details should be laid down in implementing rules to be adopted by the Commission.
Annex VI to Commission Regulation (EC) No 1974/2006 of 15 December 2006 laying down detailed rules for the application of Council Regulation (EC) No 1698/2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) i requires Member States' managing authorities starting from 2008 to publish at least annually, electronically or otherwise the list of beneficiaries receiving support from the rural development programmes, the names of the operations and the amount of public contributions allocated to these operations. However, the starting date for the publication of these data is now superseded by Regulation (EC, Euratom) No 1605/2002, as amended by Regulation (EC) No 1995/2006, which requires ex-post publication of beneficiaries of this Fund as from 1 January 2007.
The present mechanism under Articles 17 and 27 is not well tailored to deal with the situation where key components of a national control system do not exist or are not effective over a long period of time and where no remedy is available in the immediate future. It is therefore proposed to introduce a new mechanism under which the Commission would be empowered, but not obliged, to reduce or suspend payments. This mechanism could be triggered only if all below mentioned conditions are met:
- the Commission has already imposed two financial corrections in respect of the same measure and for the same reason;
- one or more of the key components of the control system in question do not exist or are not effective due to the gravity or persistence of the deficiencies found;
- the projection of the Commission is such that the Member State has failed to implement Commission's recommendation to remedy the situation and cannot or will not remedy the deficiencies in question in the immediate future.
The suspension or reduction would follow a 'warning letter' sent to the Member State. The decision would be valid for a period to be determined by the Commission covering payments after the decision, without the need to repeat the procedure each month.
3. Modification of Article 31 i of the Regulation (exceptions to the so-called 24-month rule)
Regulation (EEC) No 4045/89 requires Member States to carry out ex-post controls on certain CAP expenditure. A literal interpretation of the 24-month-rule laid down in Article 31 i of the Regulation prevents the Commission from imposing financial corrections on the Member States in case they do not comply with their control obligations under the above-mentioned Regulation due to the lack of time left after controls made by the Member State. It is therefore proposed to amend Article 31 i of the Regulation in order to allow for a reasonable period of time for the Commission to audit whether Member States have complied with their control obligations under Regulation (EEC) No 4045/89 and, if necessary, impose financial corrections.
It is proposed to adapt this Article in order to enable the Commission adopting detailed rules for all provisions laid down in the Regulation. Additionally, with a new Article on transparency in the Regulation it is advisable to refer directly in the Article on implementing powers to the transparency provision in order to authorise the Commission to adopt detailed rules of application.
Finally, it is suggested to resolve a number of smaller technical problems that have been identified concerning mainly the coherence between the financial management of the EAFRD and the financial management of the Structural Funds and the financing of intervention measures if no sum per unit is determined.
- General context
Reduction of monthly and intermediate payments is already possible under current legislation. However, for the specific situation addressed by the proposal, there is reason for improvement. As far as transparency is concerned, new legislative developments require an adaptation of the Regulation.
- Existing provisions in the area of the proposal
Articles 17, 27, 42 of the Council Regulation (EC) No 1290/2005Article 105 i of Regulation (EC) No 1083/2006Articles 30 i and 53b of Council Regulation (EC) No 1605/2002
- Consistency with the other policies and objectives of the Union
Not applicable.
- Consultation of interested parties
Not relevant as the proposal concerns basically the relation between the Member States and the Commission.
- Collection and use of expertise
There was no need for external expertise.
- Impact assessment
For amending an existing Council Regulation, it is required to adopt a Council Regulation.
Other options, as described, cannot serve this purpose as they do not have the same legal effect.
Contents
- Legal elements of the proposal
- Budgetary implication
- 1. Publication of information on beneficiaries of EAGF and EAFRD funding
- 2. Reduction and suspension of monthly and intermediate payments to Member States
- 4. Commissions implementing powers under Article 42
- 5. Technical adaptations
- Consultation of interested parties and impact assessment
- ADDITIONAL INFORMATION
- Summary of the proposed action
- Introduction of legal provision on transparency,
- new mechanism for reducing monthly and intermediate payment of CAP money to Member States in a specific situation,
- enhanced applicability of financial corrections for post-payment checks,
- technical adaptations.
- Legal basis
The third subparagraph of Article 37 i of the Treaty establishing the European Community.
- Subsidiarity principle
The proposal falls under the exclusive competence of the Community. The subsidiarity principle therefore does not apply.
- Proportionality principle
The proposal complies with the proportionality principle for the following reason(s).
The amendment in respect of reductions allows for a procedure which conforms largely to existing procedures. As far as transparency is concerned, the proposal is kept at a rather simple level and follows agreement by the Member States on this topic. For the rest, the amendments would allow for a better execution of Regulation (EC) No 1290/2005.
The administrative burden for regional and local authorities, economic operators and citizens is non-existent. Administrative burden for Member States and Community is minimal and financial burden is not higher than in the past. Transparency obliges an extra effort from the Member States and the Community.
- Choice of instruments
Proposed instruments: regulation.
Other means would not be adequate for the following reason(s).
A Council Regulation is needed as the amendments concern a Council Regulation.
The proposal has no implication for the Community budget.
- Repeal of existing legislation
No.
However, it should be noted that in its proposal for a Council Regulation laying down rules for voluntary modulation of direct payments provided for in Regulation (EC) No 1782/2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers, and amending Regulation (EC) No 1290/2005 i, the Commission has proposed an amendment of Article 42 of Regulation (EC) No 1290/2005 which is similar to the one set out in Article 1 i of the present proposal and, thus, is superseded by this new proposal.