(1)

Article 75(1) of Regulation (EU) No 1306/2013 provides that payments of support to beneficiaries under the Integrated Administration and Control System (IACS) are to be made by the Member States during a certain time period. Payments made outside that period are ineligible for Union payments, and can therefore not be reimbursed by the Commission, as provided for in Article 40 of Regulation (EU) No 1306/2013. With regard to support granted under the European Agricultural Fund for Rural Development (EAFRD) those payment deadlines will apply from claim year 2019. Specific rules related to payments from EAFRD should therefore be laid down.

(2)

Considering that in some cases EAFRD IACS payments are made by Member States after 30 June due to additional checks by Member States related to contentious claims, appeals and other national legal disputes, in accordance with the principle of proportionality, a fixed margin related to expenditure should be laid down within which no reductions of the payments are to be made for these cases. In addition, once this margin is exceeded, in order to modulate the financial impact in proportion to the delay incurred in payment, provision should be made to empower the Commission to proportionally reduce the Union payments according to the length of delay in payment recorded.

(3)

Article 5 of Commission Delegated Regulation (EU) No 907/2014 (2) provides for rules for the European Agricultural Guarantee Fund (EAGF) on proportional reductions to monthly payments where the expenditure has been made after the expiry of the payment deadline. As regards EAFRD, the declarations of expenditure and reimbursements are made once for each quarter of the year. For reasons of simplicity and efficiency, a single reduction percentage should be applied to late payments reimbursed from EAFRD for each quarter.

(4)

Article 11(2) of Delegated Regulation (EU) No 907/2014 provides for the exchange rate to be used by Member States which do not form a part of the euro zone for each payment or recovery operation for the purpose of drawing up their declarations of expenditure. However, the annual declarations of expenditure drawn up by Member States include amounts which do not involve a registration of a payment or a recovery operation in the accounts of the Paying Agency, such as the assigned revenue resulting from financial consequences of non-recovery, as provided for in the first subparagraph of Article 54(2) of Regulation (EU) No 1306/2013. Therefore, the applicable exchange rate for operations other than those specified in Article 11(2) of Delegated Regulation (EU) No 907/2014 should be provided for.

(5)

Delegated Regulation (EU) No 907/2014 should therefore be amended accordingly,

(1)

The title of Article 5 is replaced by the following:

‘Non-Compliance with the latest payment deadline as regards the European Agricultural Guarantee Fund’;

(2)

The following Article 5a is inserted after Article 5:

(*1)  Commission Implementing Regulation (EU) No 908/2014 of 6 August 2014 laying down rules for the application of Regulation (EU) No 1306/2013 of the European Parliament and of the Council with regard to paying agencies and other bodies, financial management, clearance of accounts, rules on checks, securities and transparency (OJ L 255, 28.8.2014, p. 59).’ "

(3)

In Article 11(2), the following subparagraph is added:

‘For operations for which an operative event has not been laid down by the sectoral agricultural legislation, the applicable exchange rate shall be the last-but-one exchange rate established by the European Central Bank before the last month of the period in respect of which the expenditure or assigned revenue is declared.’.