On 19th July 2012 the European Commission published its follow-up of recommendations to the “Commission report on the protection of the EU's financial interests - fight against fraud from 2010”. The document accompanies the annual report from the “Commission on the Protection of the European Union's financial interests - Fight against fraud 2011“.
Huge financial costs at stake for Member States due to irregularities
Member States are obligated to spend the CAP funding in compliance with the applicable regulations as well as European and national law. They must prevent, detect and correct incorrect payments of the European Agricultural Fund for Rural Development (EAFRD) and European Agricultural Guarantee Fund (EAGF) expenditure to final beneficiaries by adequate control procedures. If there is an incorrect payment to the beneficiary that cannot be recovered and if this loss was caused by a fault or negligence of the Member State, it must reimburse the amounts lost to the general budget of the EU. This consequence is very undesirable in the current times of budgetary austerity, however it becomes very real: the European Commission announced in June 2012 to claim back a total of 436 million EUR of EU Common Agricultural Policy (CAP) funds unduly spent by Member States.
Preventing and correct handling of irregularities is crucial
The implementing bodies in the field of EAFRD and EAGF need to undertake actions for preventing irregularities as well as for recovery of sums wrongly paid. For them it is crucial to establish secure procedures for controlling the payments to the beneficiaries and detecting all irregularities. Moreover, it is essential to notify irregularities to the European Commission on time, to undertake all available measures to recover unduly paid expenditure and to keep the Commission informed on the recovery procedures. Managing Authorities, Paying Agencies and Certifying Bodies must gain absolute certainty on the correct handling of irregularities in order to prevent huge financial costs for the Member States if irregularities are not handled in the correct way.
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