(1)

Article 40, first paragraph, of Regulation (EU) No 1306/2013 provides that any payments made by the paying agencies of the Member States to the beneficiaries before the earliest possible date of payment and after the latest possible date of payment are ineligible for Union financing, except in certain cases.

(2)

Articles 5 and 5a of Commission Delegated Regulation (EU) No 907/2014 (2) lay down the conditions under which, in accordance with the principle of proportionality, expenditure effected after the payment deadlines is considered eligible for Union payments.

(3)

Paragraph 3a was inserted in Article 5 of Delegated Regulation (EU) No 907/2014 by Commission Delegated Regulation (EU) 2015/160 (3) in order to provide legal certainty and to clarify the conditions that applied to direct payments made in financial year 2015 pursuant to Council Regulation (EC) No 73/2009 (4). That provision is obsolete and can therefore be deleted.

(4)

Checks on compliance with the latest payment deadline are to be carried out both for payments under the European Agricultural Guarantee Fund (‘EAGF’) and payments under the European Agricultural Fund for Rural Development (‘EAFRD’). However, the checks on compliance with the payment deadlines for the EAGF are carried out twice per financial year, namely on the expenditure effected by 31 July and the remaining expenditure effected by 15 October, while compliance with the payment deadline for the EAFRD is checked once per financial year in respect of all payments made for that financial year.

(5)

For reasons of simplicity and efficiency and in order to decrease the administrative burden for Member States and the Commission, one single check on compliance with the payment deadlines for the entire financial year should also be laid down as regards the EAGF expenditure. That check should be carried out on expenditure effected by 15 October. However, where a non-compliance with payment deadlines is encountered in the context of the expenditure declarations, it should be possible for the Commission to carry out an additional check on the expenditure effected by 31 July.

(6)

Regulation (EU) 2020/2220 of the European Parliament and of the Council (5) amended Regulation (EU) No 1305/2013 of the European Parliament and of the Council (6) and extended the period of duration of rural development programmes supported by the EAFRD until 31 December 2022, while providing Member States with the possibility to finance their extended programmes from the corresponding budget allocation for the years 2021 and 2022. Moreover, Regulation (EU) 2020/2220 made the additional resources from the European Union Recovery Instrument (‘EURI’) available in the extended programmes in the years 2021 and 2022 to fund measures under Regulation (EU) No 1305/2013 with the objective to address the impact of the COVID-19 crisis and its consequences for the Union agricultural sector and rural areas.

(7)

As set out in recital (24) of Regulation (EU) 2020/2220, the additional resources from the EURI are subject to specific conditions. Those additional resources should thus be programmed and monitored separately from the Union support for rural development, while applying, in general, the rules set out in Regulation (EU) No 1305/2013. Hence, those additional resources should be implemented through Regulation (EU) No 1305/2013 and considered in the framework of that Regulation as amounts that finance measures under the EAFRD. As a consequence, the respective rules on the thresholds and reductions laid down in Article 5a of Delegated Regulation (EU) No 907/2014 should be calculated separately in relation to the EAFRD allocations and in relation to the additional resources referred to in Article 58a of Regulation (EU) No 1305/2013.

(8)

Pursuant to Delegated Regulation (EU) No 907/2014, the Commission is to make payments at monthly or other regular intervals to the Member States on the basis of declarations of expenditure sent by the latter. By doing so, the Commission should, however, take into account the revenue received by the paying agencies on behalf of the Union’s budget, and declared by the Member States in their monthly declarations. Currently under the EAGF, the Commission is netting off the expenditure amounts against the assigned revenue amounts directly in the monthly payment decision issued by the Commission. This financial operation derogates from the way assigned revenue is managed under other Union Funds, where it is not netted off but recovered via a recovery order drawn up pursuant to Article 98 of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council (7). In order to harmonise the Commission’s accounting practices and, in particular, the way assigned revenue is managed, it is necessary to align this technical aspect of the financial management of the EAGF with the flow used by other Union Funds. The conditions under which the assigned revenue effected under the EAGF is to be offset, should therefore be amended accordingly, without putting at risk the timely execution of the payments to the Member States.

(9)

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

(1)

Article 5 is amended as follows:

(2)

in Article 5a, the following paragraph is added:

(3)

in Article 7, paragraph 1 is replaced by the following: