A total of €215 million of EU agricultural policy funds unduly spent by Member States is being claimed back by the European Commission on Friday 7 September under the so-called clearance of accounts procedure. However, because some of these amounts have already been recovered from the Member States and the Commission is reimbursing Spain following a Court ruling on a previous disallowance decision, the net financial impact of today's decision will be some €94 million. This money returns to the EU budget because of non-compliance with EU rules or inadequate control procedures on agricultural expenditure. 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.

Main financial corrections

Under this latest decision, funds will be recovered from Germany, Ireland, Greece, France, Italy, Latvia, Luxembourg, Hungary, Austria, Portugal, Romania, Sweden and the United Kingdom. The most significant individual corrections are:

• € 89.4 million (financial impact: €88.9 million) charged to Portugal for weaknesses in the LPIS-GIS and for late on-the-spot controls;
• € 34.5 million (financial impact1 : €32.2 million) charged to the UK for weaknesses in the LPIS-GIS, deficiencies in the on-the-spot checks;
• € 28.0 million (financial impact1 : €27.9 million) charged to Italy for deficiencies in calculation of entitlements and for deficiencies in integration of the olive oil sector into SPS;
• € 20.4 million charged to Sweden for the deficiencies in the LPIS in respect of financial years 2009 for area-aids expenditure, including area-based Rural Development measures.

Following last year's European Court judgement (C-24/11P) against a previous Commission decision to recover olive oil funds, Spain will be reimbursed €110.7m.

Background

Member States are responsible for managing most CAP payments, mainly via their paying agencies. They are also in charge of controls, for example verifying the 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, and has the power to claw back funds in arrears if the audits show that Member State responses are not good enough to guarantee that EU funds have been spent properly.

For details on how the clearance of annual accounts system works, see MEMO/12/109 and the factsheet "Managing the agriculture budget wisely", available on the internet at: http://ec.europa.eu/agriculture/fin/clearance/factsheet_en.pdf.

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