Fraud in the financing of the Common Agricultural Policy

The European Union (EU) intends to reinforce the fight against irregularities in the payment of amounts for the financing of the Common Agricultural Policy (CAP). Within this framework, it is important to improve collaboration between Member States and the Commission. The Regulation specifies the national provisions that have to be communicated to the Commission. It also establishes the rules governing the information system as regards the measures taken by Member States to safeguard the financial interests of the Community.

ACT

Council Regulation (EEC) No 595/91 of 4 March 1991 concerning irregularities and the recovery of sums wrongly paid in connection with the financing of the Common Agricultural Policy and the organization of an information system in this field and repealing Regulation (EEC) No 283/72.

SUMMARY

This Regulation aims to improve the Community response to fraud. It specifies the national provisions that are to be communicated to the Commission. It also includes the quarterly report regarding irregularities to be submitted to the Commission. The Commission will also be informed of the ongoing procedures for penalising those who have committed the irregularities.

National provisions

The Member States are to communicate to the Commission, within three months of the entry into force of this Regulation:

• the provisions laid down by law, regulation or administrative action for applying the measures to ensure that transactions financed by the Guarantee Section of the European Agricultural Guidance and Guarantee Fund (EAGGF) are duly carried out;
• the list of authorities and bodies responsible for the application of those measures and the main provisions relating to the role and functioning of those authorities and bodies.

Quarterly Report

Within the two months following the end of each quarter, Member States must report to the Commission any irregularities relating to the EAGGF which have been the subject of initial administrative or legal investigations. This report should be accompanied by information concerning the type and the amount of expenditure, the practices used to commit the irregularity, the identity of those implicated and the progress of administrative and legal proceedings.

If some of this information is not available, the Member States must communicate it in the following quarterly statements.

Notification to other Member States

Each Member State is to notify the other Member States concerned and the Commission forthwith of any irregularities which it is feared may have effects outside its territory very quickly or which show that a new fraudulent practice has been adopted.

Where the Commission considers that irregularities have taken place in one or more Member States, it must inform the Member State or States concerned which must, at the earliest opportunity, hold an inquiry in which officials of the Commission may take part. The Member State must, as soon as possible, communicate to the Commission the inquiry findings.

The Fund Committee

The Fund Committee * will be consulted when the type of irregularity suggests that identical or similar practices may be taking place in other Member States. The Committee must be informed every quarter by the Commission of the order of magnitude of the sums involved in the irregularities which have been discovered and of the various categories of irregularity, broken down by type and with a statement of the number.

Last updated: 08.01.2006