Commission Implementing Decision of 9 July 2014 on excluding from European Union financing certain expenditure incurred by the Member States under the Guarantee Section of the European Agricultural Guidance and Guarantee Fund (EAGGF), under the European Agricultural Guarantee Fund (EAGF) and under the European Agricultural Fund for Rural Development (EAFRD) (notified under document C(2014) 4479)

Commission Implementing Decision of 9 July 2014 on excluding from European Union financing certain expenditure incurred by the Member States under the Guarantee Section of the European Agricultural Guidance and Guarantee Fund (EAGGF), under the European Agricultural Guarantee Fund (EAGF) and under the European Agricultural Fund for Rural Development (EAFRD) (notified under document C(2014) 4479) (only the Czech, Danish, Dutch, English, Finnish, French, German, Hungarian, Italian, Latvian, Polish, Portuguese, Slovenian, Spanish and Swedish texts are authentic) (2014/458/EU) THE EUROPEAN COMMISSION, Having regard to the Treaty on the Functioning of the European Union, Having regard to Council Regulation (EC) No 1258/1999 of 17 May 1999 on the financing of the common agricultural policy OJ L 160, 26 6 1999, p. 103. , and in particular Article 7(4) thereof, Having regard to Council Regulation (EC) No 1290/2005 of 21 June 2005 on the financing of the common agricultural policy OJ L 209, 11 8 2005, p. 1. , and in particular Article 31 thereof, Having consulted the Committee on the Agricultural Funds, Whereas: (1) Under Article 7(4) of Regulation (EC) No 1258/1999, and Article 31 of Regulation (EC) No 1290/2005, the Commission is to carry out the necessary verifications, communicate to the Member States the results of these verifications, take note of the comments of the Member States, initiate a bilateral discussion so that an agreement may be reached with the Member States in question, and formally communicate its conclusions to them. (2) The Member States have had an opportunity to request the launch of a conciliation procedure. That opportunity has been used in some cases and the reports issued on the outcome have been examined by the Commission. (3) Under Regulation (EC) No 1258/1999 and Regulation (EC) No 1290/2005, only agricultural expenditure which has been incurred in a way that has not infringed European Union rules may be financed. (4) In the light of the verifications carried out, the outcome of the bilateral discussions and the conciliation procedures, part of the expenditure declared by the Member States does not fulfil this requirement and cannot, therefore, be financed under the EAGGF Guarantee Section, the EAGF and the EAFRD. (5) The amounts that are not recognised as being chargeable to the EAGGF Guarantee Section, the EAGF and the EAFRD should be indicated. Those amounts do not relate to expenditure incurred more than twenty-four months before the Commission's written notification of the results of the verifications to the Member States. (6) As regards the cases covered by this decision, the assessment of the amounts to be excluded on grounds of non-compliance with European Union rules was notified by the Commission to the Member States in a summary report on the subject. (7) This Decision is without prejudice to any financial conclusions that the Commission may draw from the judgments of the Court of Justice in cases pending on 15 March 2014 and relating to its content,

HAS ADOPTED THIS DECISION:

Article 1

The expenditure itemised in the Annex hereto that has been incurred by the Member States' accredited paying agencies and declared under the EAGGF Guarantee Section, under the EAGF or under the EAFRD shall be excluded from European Union financing because it does not comply with European Union rules.

Article 2

This Decision is addressed to the Kingdom of Belgium, the Czech Republic, the Kingdom of Denmark, the Federal Republic of Germany, the Kingdom of Spain, the French Republic, the Italian Republic, the Republic of Latvia, Hungary, the Republic of Poland, the Portuguese Republic, the Republic of Slovenia, the Republic of Finland, the Kingdom of Sweden, the United Kingdom of Great Britain and Northern Ireland. Done at Brussels, 9 July 2014. For the Commission Dacian Cioloș Member of the Commission

Annex

ANNEX MSMeasureFinancial YearReasonType%CurrencyAmountDeductionsFinancial impact BUDGET ITEM: 6701 BEOther Direct Aid — Bovines2010Payments for ineligible animals and incorrect application of sanctionsONE– OFFEUR– 133335,000,00– 133335,00BEOther Direct Aid — Bovines2011Payments for ineligible animals and incorrect application of sanctionsONE– OFFEUR– 62275,000,00– 62275,00BEOther Direct Aid — Bovines2012Payments for ineligible animals and incorrect application of sanctionsONE– OFFEUR– 110550,000,00– 110550,00TOTAL BEEUR– 306160,000,00– 306160,00CZOther Direct Aid — Article 68– 72 of Reg 73/20092011Undue payments and non– application of reductions/exclusions for animals with irregularitiesONE– OFFEUR– 4195,160,00– 4195,16CZOther Direct Aid — Article 68– 72 of Reg 73/20092012Undue payments and non– application of reductions/exclusions for animals with irregularitiesONE– OFFEUR– 68,740,00– 68,74TOTAL CZEUR– 4263,900,00– 4263,90DEDecoupled Direct Aids2008lack of extrapolation in case of overdeclaration below 3 %ONE– OFFEUR– 106694,140,00– 106694,14DEDecoupled Direct Aids2009lack of extrapolation in case of overdeclaration below 3 %ONE– OFFEUR– 104776,140,00– 104776,14DEDecoupled Direct Aids2009deficiencies in the measurement toleranceONE– OFFEUR– 56327,480,00– 56327,48 DEDecoupled Direct Aids2010lack of extrapolation in case of overdeclaration below 3 %ONE– OFFEUR– 72254,330,00– 72254,33DEDecoupled Direct Aids2010deficiencies in the measurement toleranceONE– OFFEUR– 56781,050,00– 56781,05TOTAL DEEUR– 396833,140,00– 396833,14DKDecoupled Direct Aids2011On– the– spot check weaknessesFLAT RATE2,00 %EUR– 1529693,100,00– 1529693,10DKDecoupled Direct Aids2011Retroactive recoveries and incorrect treatment of payment entitlementsONE– OFFEUR– 69494,000,00– 69494,00DKDecoupled Direct Aids2012On– the– spot check weaknessesFLAT RATE2,00 %EUR– 1489167,200,00– 1489167,20DKDecoupled Direct Aids2012Retroactive recoveries and incorrect treatment of payment entitlementsONE– OFFEUR– 3654,000,00– 3654,00TOTAL DKEUR– 3092008,300,00– 3092008,30ESFishery Measures2004Not conclusive administrative controls, deficiencies in on– the– spot controls and external auditFLAT RATE5,00 %EUR– 185468,740,00– 185468,74ESFishery Measures2005Not conclusive administrative controls, deficiencies in on– the– spot controls and external auditFLAT RATE5,00 %EUR– 253547,340,00– 253547,34ESFishery Measures2006Not conclusive administrative controls, deficiencies in on– the– spot controls and external auditFLAT RATE2,00 %EUR– 117708,850,00– 117708,85

ESDecoupled Direct Aids2010Weaknesses in the administrative controls, on– the– spot checks and recoveriesONE– OFFEUR– 53541,400,00– 53541,40ESDecoupled Direct Aids2011Weaknesses in the administrative controls, on– the– spot checks and recoveriesONE– OFFEUR– 368,200,00– 368,20ESCross Compliance2009Leniency of the sanctioning system, CY2008ONE– OFFEUR– 191873,53– 383,75– 191489,78ESCross Compliance2009Partial and ineffective check of many SMRs, CY2008FLAT RATE2,00 %EUR– 790454,36– 218,52– 790235,84ESCross Compliance2009Partial and ineffective check of many SMRs, CY2010FLAT RATE2,00 %EUR– 24049,410,00– 24049,41ESCross Compliance2010Partial and ineffective check of many SMRs, CY2008FLAT RATE2,00 %EUR– 638,550,00– 638,55ESCross Compliance2010Partial and ineffective check of many SMRs, CY2009FLAT RATE2,00 %EUR– 781951,76– 1002,96– 780948,80ESCross Compliance2010Partial and ineffective check of many SMRs, CY2010FLAT RATE2,00 %EUR– 30,920,00– 30,92ESCross Compliance2011Partial and ineffective check of many SMRs, CY2008FLAT RATE2,00 %EUR– 117,270,00– 117,27ESCross Compliance2011Partial and ineffective check of many SMRs, CY2009FLAT RATE2,00 %EUR– 570,440,00– 570,44ESCross Compliance2011Partial and ineffective check of many SMRs, CY2010FLAT RATE2,00 %EUR– 824194,020,00– 824194,02TOTAL ESEUR– 3224514,79– 1605,23– 3222909,56 FIDecoupled Direct Aids2010Weaknesses in LPIS, on– the– spot checks and calculation of reductionsONE– OFFEUR– 289992,100,00– 289992,10FIDecoupled Direct Aids2011Weaknesses in LPIS, on– the– spot checks and calculation of reductionsONE– OFFEUR– 961208,710,00– 961208,71FIDecoupled Direct Aids2012Weaknesses in LPIS, on– the– spot checks and calculation of reductionsONE– OFFEUR– 1384610,180,00– 1384610,18TOTAL FIEUR– 2635810,990,00– 2635810,99FRMilk — Schoolmilk2009late on– the– spot control for School milk scheme (school year 2008– 2009)FLAT RATE5,00 %EUR– 290282,580,00– 290282,58FRMilk — Schoolmilk2010late on– the– spot control for School milk scheme (school year 2008– 2009)FLAT RATE5,00 %EUR– 351047,940,00– 351047,94FRMilk — Schoolmilk2011late on– the– spot control for School milk scheme (school year 2008– 2009)FLAT RATE5,00 %EUR– 1610,580,00– 1610,58FRMilk — Schoolmilk2012late on– the– spot control for School milk scheme (school year 2008– 2009)FLAT RATE5,00 %EUR– 474,300,00– 474,30FREntitlements2010irregular allocations of the national reserve and consolidation of the forage areasFLAT RATE10,00 %EUR– 5938076,490,00– 5938076,49FREntitlements2010irregular allocations of the national reserve and consolidation of the forage areasONE– OFFEUR– 2584040,400,00– 2584040,40FREntitlements2011irregular allocations of the national reserve and consolidation of the forage areasFLAT RATE10,00 %EUR– 3176345,750,00– 3176345,75 FREntitlements2011irregular allocations of the national reserve and consolidation of the forage areasONE– OFFEUR– 2584032,470,00– 2584032,47FREntitlements2012irregular allocations of the national reserve and consolidation of the forage areasFLAT RATE10,00 %EUR– 3176345,750,00– 3176345,75FREntitlements2012irregular allocations of the national reserve and consolidation of the forage areasONE– OFFEUR– 2584031,620,00– 2584031,62TOTAL FREUR– 20686287,880,00– 20686287,88GBDecoupled Direct Aids2011Weaknesses in LPIS and on– the– spot checksONE– OFFEUR– 2563473,000,00– 2563473,00TOTAL GBEUR– 2563473,000,00– 2563473,00ITFruit and Vegetables — Tomato Processing2008Weaknesses in administrative and accounting checks; No reconciling records held by producer organisations and processors with the accounts required under national lawFLAT RATE5,00 %EUR– 2332156,30– 932862,52– 1399293,78ITFruit and Vegetables — Tomato Processing2010Weaknesses in administrative and accounting checks; No reconciling records held by producer organisations and processors with the accounts required under national lawFLAT RATE5,00 %EUR720,020,00720,02ITIrregularities2012Lack of information on the undertaken recovery actionsONE– OFFEUR– 2362005,730,00– 2362005,73

ITIrregularities2012Negligence in the recovery procedureONE– OFFEUR– 1283164,950,00– 1283164,95ITIrregularities2012Non– reporting in Annex IIIONE– OFFEUR– 1460976,880,00– 1460976,88TOTAL ITEUR– 7437583,84– 932862,52– 6504721,32LVDecoupled Direct Aids2011Weaknesses following the obvious errors and in the on– the– spot checks with errors below 3 %ONE– OFFEUR– 15324,300,00– 15324,30LVDecoupled Direct Aids2012Weaknesses following the obvious errors and in the on– the– spot checks with errors below 3 %ONE– OFFEUR– 3399,210,00– 3399,21LVCross Compliance20094 GAEC not defined, incorrect calculation of sanction, CY 2008FLAT RATE5,00 %EUR– 254163,510,00– 254163,51LVCross Compliance20102 GAEC not defined, deficiencies in checks for SMR4 and tolerance applied for SMR7, CY 2009FLAT RATE2,00 %EUR– 181777,790,00– 181777,79LVCross Compliance20104 GAEC not defined, incorrect calculation of sanction, CY 2008FLAT RATE5,00 %EUR– 179,810,00– 179,81LVCross Compliance20112 GAEC not defined, deficiencies in checks for SMR4 and tolerance applied for SMR7, CY 2009FLAT RATE2,00 %EUR– 100,050,00– 100,05LVCross Compliance20114 GAEC not defined, incorrect calculation of sanction, CY 2008FLAT RATE5,00 %EUR14,860,0014,86 LVCross Compliance2011Deficiencies in checks for SMR4 and tolerance applied for SMR7, CY 2010ONE– OFFEUR– 2230,280,00– 2230,28LVCross Compliance20122 GAEC not defined, deficiencies in checks for SMR4 and tolerance applied for SMR7, CY 2009FLAT RATE2,00 %EUR– 0,190,00– 0,19TOTAL LVEUR– 457160,280,00– 457160,28SEDecoupled Direct Aids2010Weaknesses in LPIS, CY 2009ONE– OFFEUR– 1117986,600,00– 1117986,60SEDecoupled Direct Aids2011Weaknesses in LPIS, CY 2010ONE– OFFEUR– 15591,000,00– 15591,00TOTAL SEEUR– 1133577,600,00– 1133577,60SIDecoupled Direct Aids2010Weakness in verification of small parcels to respect the definition of agricultural parcelsFLAT RATE5,00 %EUR– 85780,08– 2203,29– 83576,79SIDecoupled Direct Aids2010Non– extrapolation of control result in case of difference below 3 %ONE– OFFEUR– 1771,90– 10,97– 1760,93SIDecoupled Direct Aids2011Weakness in verification of small parcels to respect the definition of agricultural parcelsFLAT RATE5,00 %EUR– 115956,460,00– 115956,46SIDecoupled Direct Aids2011Non– extrapolation of control result in case of difference below 3 %ONE– OFFEUR– 6376,67– 7,62– 6369,05 SIDecoupled Direct Aids2012Weakness in verification of small parcels to respect the definition of agricultural parcelsFLAT RATE5,00 %EUR– 131269,230,00– 131269,23SIDecoupled Direct Aids2012Non– extrapolation of control result in case of difference below 3 %ONE– OFFEUR– 6506,76– 7,78– 6498,98TOTAL SIEUR– 347661,10– 2229,66– 345431,44TOTAL 6701EUR– 42285334,82– 936697,41– 41348637,41 BUDGET ITEM: 6711 DKRural Development EAFRD Axis 2 (2007– 2013, area related measures)2011On– the– spot check weaknessesFLAT RATE2,00 %EUR– 138216,280,00– 138216,28DKRural Development EAFRD Axis 2 (2007– 2013, area related measures)2012On– the– spot check weaknessesFLAT RATE2,00 %EUR– 114814,020,00– 114814,02TOTAL DKEUR– 253030,300,00– 253030,30ESCross Compliance2009Partial and ineffective check of many SMRs, CY2008FLAT RATE2,00 %EUR– 25382,590,00– 25382,59ESCross Compliance2009Partial and ineffective check of many SMRs, CY2009FLAT RATE2,00 %EUR– 1341,720,00– 1341,72ESCross Compliance2010Partial and ineffective check of many SMRs, CY2008FLAT RATE2,00 %EUR18,140,0018,14ESCross Compliance2010Partial and ineffective check of many SMRs, CY2009FLAT RATE2,00 %EUR– 34511,040,00– 34511,04

ESCross Compliance2010Partial and ineffective check of many SMRs, CY2010FLAT RATE2,00 %EUR– 317,200,00– 317,20ESCross Compliance2011Partial and ineffective check of many SMRs, CY2008FLAT RATE2,00 %EUR– 36,650,00– 36,65ESCross Compliance2011Partial and ineffective check of many SMRs, CY2009FLAT RATE2,00 %EUR– 69,840,00– 69,84ESCross Compliance2011Partial and ineffective check of many SMRs, CY2010FLAT RATE2,00 %EUR– 39292,140,00– 39292,14TOTAL ESEUR– 100933,040,00– 100933,04FIRural Development EAFRD Axis 2 (2007– 2013, area related measures)2010Weaknesses in LPIS, on– the– spot checks and calculation of reductionsONE– OFFEUR– 132350,410,00– 132350,41FIRural Development EAFRD Axis 2 (2007– 2013, area related measures)2011Weaknesses in LPIS, on– the– spot checks and calculation of reductionsONE– OFFEUR– 449325,950,00– 449325,95FIRural Development EAFRD Axis 2 (2007– 2013, area related measures)2012Weaknesses in LPIS, on– the– spot checks and calculation of reductionsONE– OFFEUR– 558189,310,00– 558189,31TOTAL FIEUR– 1139865,670,00– 1139865,67GBRural Development EAFRD Axis 2 (2007– 2013, area related measures)2011Weaknesses in LPIS and on– the– spot checksONE– OFFEUR– 614769,000,00– 614769,00TOTAL GBEUR– 614769,000,00– 614769,00 HURural Development EAFRD Axis 1+3 — Investment orientated measures (2007– 2013)2009inadequate key control — support paid to ineligible beneficiaries (compulsory training not attended)FLAT RATE10,00 %EUR– 131333,830,00– 131333,83HURural Development EAFRD Axis 1+3 — Investment orientated measures (2007– 2013)2010inadequate key control — support paid to ineligible beneficiaries (compulsory training not attended)FLAT RATE10,00 %EUR– 149391,750,00– 149391,75HURural Development EAFRD Axis 1+3 — Investment orientated measures (2007– 2013)2011inadequate key control — support paid to ineligible beneficiaries (compulsory training not attended)FLAT RATE10,00 %EUR– 42101,650,00– 42101,65HURural Development EAFRD Axis 1+3 — Investment orientated measures (2007– 2013)2012inadequate key control — support paid to ineligible beneficiaries (compulsory training not attended)FLAT RATE10,00 %EUR– 60885,250,00– 60885,25TOTAL HUEUR– 383712,480,00– 383712,48LVCross Compliance20094 GAEC not defined, incorrect calculation of sanction, CY 2008FLAT RATE5,00 %EUR– 212566,450,00– 212566,45LVCross Compliance20102 GAEC not defined, deficiencies in checks for SMR4 and tolerance applied for SMR7, CY 2009FLAT RATE2,00 %EUR– 92731,870,00– 92731,87LVCross Compliance20104 GAEC not defined, incorrect calculation of sanction, CY 2008FLAT RATE5,00 %EUR1146,350,001146,35LVCross Compliance20112 GAEC not defined, deficiencies in checks for SMR4 and tolerance applied for SMR7, CY 2009FLAT RATE2,00 %EUR249,480,00249,48 LVCross Compliance20114 GAEC not defined, incorrect calculation of sanction, CY 2008FLAT RATE5,00 %EUR425,780,00425,78LVCross Compliance20122 GAEC not defined, deficiencies in checks for SMR4 and tolerance applied for SMR7, CY 2009FLAT RATE2,00 %EUR106,220,00106,22LVCross Compliance20124 GAEC not defined, incorrect calculation of sanction, CY 2008FLAT RATE5,00 %EUR183,030,00183,03TOTAL LVEUR– 303187,460,00– 303187,46PLRural Development EAFRD Axis 1+3 — Investment orientated measures (2007– 2013)2009Lack of selection criteriaFLAT RATE5,00 %EUR– 16237,920,00– 16237,92PLRural Development EAFRD Axis 1+3 — Investment orientated measures (2007– 2013)2010Lack of selection criteriaFLAT RATE5,00 %EUR– 2189601,120,00– 2189601,12PLRural Development EAFRD Axis 1+3 — Investment orientated measures (2007– 2013)2011Lack of selection criteriaFLAT RATE5,00 %EUR– 2290180,190,00– 2290180,19PLRural Development EAFRD Axis 1+3 — Investment orientated measures (2007– 2013)2012Lack of selection criteriaFLAT RATE5,00 %EUR– 1175231,690,00– 1175231,69PLRural Development EAFRD Axis 1+3 — Investment orientated measures (2007– 2013)2013Lack of selection criteriaFLAT RATE5,00 %EUR– 172311,400,00– 172311,40TOTAL PLEUR– 5843562,320,00– 5843562,32

PTRural Development EAFRD Axis 2 (2007– 2013, area related measures)2008late on– the– spot checksFLAT RATE5,00 %EUR– 81992,88– 81992,880,00PTRural Development EAFRD Axis 2 (2007– 2013, area related measures)2009late on– the– spot checksFLAT RATE5,00 %EUR– 3374908,49– 2911944,67– 462963,82PTRural Development EAFRD Axis 2 (2007– 2013, area related measures)2009late on– the– spot checksFLAT RATE2,00 %EUR– 353974,420,00– 353974,42PTRural Development EAFRD Axis 2 (2007– 2013, area related measures)2010late on– the– spot checksFLAT RATE2,00 %EUR– 213427,370,00– 213427,37PTRural Development EAFRD Axis 2 (2007– 2013, area related measures)2010late on– the– spot checksFLAT RATE5,00 %EUR– 1682133,84– 1446076,06– 236057,78TOTAL PTEUR– 5706437,00– 4440013,61– 1266423,39SERural Development EAFRD Axis 2 (2007– 2013, area related measures)2010Weaknesses in LPIS, CY 2009ONE– OFFEUR– 190380,000,00– 190380,00SERural Development EAFRD Axis 2 (2007– 2013, area related measures)2011Weaknesses in LPIS, CY 2010ONE– OFFEUR– 143719,000,00– 143719,00TOTAL SEEUR– 334099,000,00– 334099,00TOTAL 6711EUR– 14679596,27– 4440013,61– 10239582,66