Regulation (EU) 2021/2116 of the European Parliament and of the Council of 2 December 2021 on the financing, management and monitoring of the common agricultural policy and repealing Regulation (EU) No 1306/2013

• (b) prior to 1 December pay advances of up to 85 % for the support granted under interventions for rural development referred to in Article 65(2) of this Regulation.

3a. Member States may decide to pay advances to beneficiaries of the interventions referred to in Title III, Chapter III, of Regulation (EU) 2021/2115, subject to the specific conditions laid down pursuant to paragraph 5.

3b. Member States may decide to pay advances under the aid scheme laid down in Part II, Title I, Chapter II, Section 1, of Regulation (EU) No 1308/2013 in respect of aid for school year 2023/2024 and subsequent school years, subject to the specific conditions laid down pursuant to paragraph 5.

3c. Member States may decide to pay advances to beneficiaries of measures supporting agricultural markets adopted under Articles 219, 220 and 221 of Regulation (EU) No 1308/2013, subject to the specific conditions laid down pursuant to paragraph 5.

Article 45

Assignment of revenue

• (a) as regards expenditure under both the EAGF and the EAFRD, sums under Articles 38 and 55 of this Regulation and Article 54 of Regulation (EU) No 1306/2013 applicable in accordance with Article 104 of this Regulation and, as regards expenditure under the EAGF, sums under Articles 53 and 56 of this Regulation which are to be paid into the Union budget, including interest thereon;

• (b) amounts corresponding to penalties applied in accordance with Articles 12 and 14 of Regulation (EU) 2021/2115 as regards expenditure under the EAGF;

• (c) any security, deposit or guarantee provided pursuant to Union law adopted within the framework of the CAP, excluding interventions for rural development, and subsequently forfeited; however, forfeited securities lodged when issuing export or import licences or under a tendering procedure for the sole purpose of ensuring that tenderers submit genuine tenders shall be retained by the Member States;

• (d) sums definitively reduced in accordance with Article 41(2).

Article 46

Information measures

It shall supply coherent, evidence-based, objective and comprehensive information, both inside and outside the Union, and outline the communication actions planned in the Commission’s multiannual strategic plan for agriculture and rural development.

• (a) annual work programmes or other specific measures presented by third parties;

• (b) activities implemented on the initiative of the Commission.

Those measures which are required by law or those measures already receiving financing under another Union action shall be excluded.

When implementing the activities referred to in the first subparagraph, point (b), the Commission may be assisted by external experts.

The measures referred to in the first subparagraph shall also contribute to the corporate communication of the Union’s political priorities in so far as those priorities are related to the general objectives of this Regulation.

Article 47

Other Commission powers relating to this Chapter

If the Union budget has not been adopted by the beginning of the budgetary year or if the total amount of the commitments scheduled exceeds the threshold laid down in Article 11(2) of the Financial Regulation, the Commission is empowered to adopt delegated acts in accordance with Article 102 of this Regulation supplementing this Regulation with rules on the method applicable to the commitments and the payment of the amounts.

• (a) the financing and accounting of intervention measures in the form of public storage, and other expenditure financed by the EAGF and EAFRD;

• (b) the terms and conditions governing the implementation of the automatic decommitment procedure.

Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 103(3).

CHAPTER IV Clearance of accounts

Section 1 General provisions

Article 48

Single audit approach

In accordance with Article 127 of the Financial Regulation, the Commission shall take assurance from the work of the certification bodies referred to in Article 12 of this Regulation, unless it has informed the Member State concerned that it cannot rely on the work of the certification body for a given financial year, and it shall take it into account in its risk assessment of the need for Commission audits in that Member State. The Commission shall inform that Member State of the reasons why it cannot rely on the work of the certification body concerned.

Article 49

Checks by the Commission

• (a) administrative practices comply with Union rules;

• (b) the expenditure falling within the scope of Article 5(2) and Article 6 of this Regulation and corresponding to the interventions referred to in Regulation (EU) 2021/2115 has a corresponding output as reported in the annual performance report;

• (c) the expenditure corresponding to the measures laid down in Regulations (EU) No 228/2013, (EU) No 229/2013, (EU) No 1308/2013 and (EU) No 1144/2014 has been effected and checked in accordance with applicable Union rules;

• (d) the work of the certification body is carried out in accordance with Article 12 and for the purposes of Section 2 of this Chapter;

• (e) a paying agency complies with the minimum conditions for the accreditation laid down in Article 9(2) and whether the Member State correctly applies Article 9(4);

• (f) the Member State concerned implements the CAP Strategic Plan in accordance with Article 9 of Regulation (EU) 2021/2115;

• (g) the action plans referred to in Article 42 are correctly implemented.

Persons authorised by the Commission to carry out checks on its behalf, or Commission agents acting within the scope of the powers conferred on them, shall have access to the books and all other documents, including documents and metadata drawn up or received and recorded on an electronic medium, relating to expenditure financed by the EAGF or the EAFRD.

The powers to carry out checks shall not affect the application of national provisions which reserve certain acts for agents specifically designated by national law. Without prejudice to the specific provisions of Regulation (Euratom, EC) No 2185/96 and Regulation (EU, Euratom) No 883/2013, persons authorised by the Commission to act on its behalf shall not take part, inter alia, in home visits or the formal questioning of persons on the basis of law of the Member State concerned. However, they shall have access to information thus obtained.

At the request of the Commission and with the agreement of the Member State, additional checks or inquiries into the operations covered by this Regulation shall be undertaken by the competent bodies of that Member State. Commission agents or persons authorised by the Commission to act on its behalf may take part in such checks.

In order to improve checks, the Commission may, with the agreement of the Member States concerned, request the assistance of the authorities of those Member States for certain checks or inquiries.

Article 50

Access to information

Article 51

Access to documents

Those documents and that information may be kept in electronic form under the conditions laid down by the Commission pursuant to paragraph 3.

Where those documents and that information are kept by an authority acting under delegation from a paying agency and responsible for authorising expenditure, that authority shall send reports to the accredited paying agency on the number of checks made, their content and the measures taken in the light of their results.

Article 52

Commission powers relating to checks and documents and information and cooperation obligation

Section 2 Clearance

Article 53

Annual financial clearance

Those implementing acts shall cover the completeness, accuracy and veracity of the annual accounts submitted and shall be without prejudice to the content of the implementing acts subsequently adopted pursuant to Article 55.

Article 55

Conformity procedure

However, as regards the types of intervention referred to in Regulation (EU) 2021/2115, the exclusions from Union financing referred to in the first subparagraph of this paragraph shall only apply in the case of serious deficiencies in the proper functioning of the governance systems of the Member States.

The first subparagraph shall not apply to cases of non-compliance with the eligibility conditions for individual beneficiaries laid down in the CAP Strategic Plans and national rules.

If no agreement is reached, the Member State concerned may request the opening of a procedure aimed at reconciling, within a period of four months, each party’s position. The procedure shall be carried out by a conciliation body. A report on the outcome of that procedure shall be submitted to the Commission. The Commission shall take into account the recommendations of the report before deciding on refusal of the financing and shall provide justification if it decides not to follow those recommendations.

• (a) the expenditure indicated in Article 5(2) which is effected more than 24 months before the Commission notifies the Member State in writing of its findings;

• (b) expenditure on multiannual interventions falling within the scope of Article 5(2) or within the scope of the interventions for rural development referred to in Article 6, where the final obligation of the beneficiary occurs more than 24 months before the Commission notifies the Member State in writing of its findings;

• (c) expenditure on the interventions for rural development referred to in Article 6, other than those referred to in point (b) of this paragraph, for which the payment or, as the case may be, the final payment by the paying agency is made more than 24 months before the Commission notifies the Member State in writing of its findings.

• (a) aids granted by a Member State for which the Commission has initiated the procedure laid down in Article 108(2) TFEU;

• (b) infringements which the Commission has notified to the Member State concerned by a reasoned opinion in accordance with Article 258 TFEU;

• (c) infringements by Member States of their obligations under Title IV, Chapter III, of this Regulation, provided that the Commission notifies the Member State in writing of its findings within 12 months following receipt of the Member State’s report on the results of its checks on the expenditure concerned.

Section 3 Recoveries for non-compliance

Article 56

Provisions specific to the EAGF

Article 57

Provisions specific to the EAFRD

Amounts of the Union financing under the EAFRD which are cancelled and amounts recovered, and the interest thereon, shall be reallocated to other rural development operations in the CAP Strategic Plans. However, Member States may reuse the cancelled or recovered Union funds in their entirety only for a rural development operation under their CAP Strategic Plans and may not reallocate them to rural development operations which have been the subject of a financial adjustment.

Member States shall deduct any sums unduly paid as a result of an outstanding irregularity by a beneficiary, in accordance with this Article, from any future payments to the beneficiary by the paying agency.

• (a) where the non-compliance that gives rise to the cancellation of the contribution is detected at the level of the final recipient as defined in Article 2, point (18), of Regulation (EU) 2021/1060, only for other final recipients within the same financial instrument;

• (b) where the non-compliance that gives rise to the cancellation of the contribution is detected at the level of the specific fund as defined in Article 2, point (21), of Regulation (EU) 2021/1060 within a holding fund as defined in Article 2, point (20), of that Regulation, only for other specific funds.

By way of derogation from paragraph 1, the bodies implementing financial instruments shall not reimburse to Member States the amounts referred to in the first subparagraph of this paragraph provided that those bodies demonstrate, for a given irregularity, that all the following conditions are fulfilled:

• (a) the irregularity occurred at the level of final recipients or, in the case of a holding fund, at the level of bodies implementing specific funds or final recipients;

• (b) the bodies implementing financial instruments carried out their obligations, in relation to the programme contributions affected by the irregularity, in accordance with applicable law and acted with the degree of professional care, transparency and diligence expected from a professional body experienced in implementing financial instruments; and

• (c) the amounts affected by the irregularity could not be recovered even though the bodies implementing financial instruments pursued all applicable contractual and legal measures with due diligence.

Article 58

Implementing powers relating to the possible offsetting of the amounts and notification forms

The Commission shall adopt implementing acts laying down rules on the possible offsetting of the amounts resulting from recovery of undue payments and the forms of notification and communication to be made by the Member States to the Commission in relation to the obligations set out in this Section. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 103(3).

TITLE IV CONTROL SYSTEMS AND PENALTIES

CHAPTER I General rules

Article 59

Protection of the financial interests of the Union

• (a) checking the legality and regularity of operations financed by the EAGF and EAFRD, including at the level of beneficiaries and as set out in the CAP Strategic Plans;

• (b) ensuring effective prevention against fraud, especially in areas with a higher level of risk, which will act as a deterrent, having regard to the costs and benefits and the proportionality of the measures;

• (c) preventing, detecting and correcting irregularities and fraud;

• (d) imposing penalties which are effective, proportionate and dissuasive in accordance with Union law, or failing this, national law, and bring legal proceedings to that effect, as necessary;

• (e) recovering undue payments plus interest and bring legal proceedings to that effect, as necessary, including for irregularities within the meaning of Article 1(2) of Regulation (EC, Euratom) No 2988/95.

Member States shall take the actions necessary to ensure the proper functioning of their management and control systems and the legality and regularity of expenditure declared to the Commission.

To assist the Member States in this respect, the Commission shall make available to the Member States a data-mining tool to assess risks presented by projects, beneficiaries, contractors and contracts while ensuring minimal administrative burden and effective protection of the Union financial interests. That data-mining tool may also be used in order to avoid circumvention of rules as referred to in Article 62. By 2025, the Commission shall present a report which assesses the use of the single data-mining tool and its interoperability with a view to its generalised use by Member States.

The arrangements set out by Member States shall ensure, in particular, that no penalties are imposed where:

• (a) the non-compliance is due to force majeure or exceptional circumstances in accordance with Article 3;

• (b) the non-compliance is due to an error of the competent authority or another authority, and where the error could not reasonably have been detected by the person concerned by the administrative penalty;

• (c) the person concerned can demonstrate to the satisfaction of the competent authority that he or she is not at fault for the non-compliance with the obligations referred to in paragraph 1 of this Article or where the competent authority is otherwise satisfied that the person concerned is not at fault.

Where the non-compliance with the conditions for the granting of the aid is due to force majeure or exceptional circumstances in accordance with Article 3, the beneficiary shall retain the right to receive aid.

Any conditions established by Member States to supplement the conditions laid down by Union rules for receiving support financed by the EAGF or the EAFRD shall be verifiable.

• (a) the procedures, deadlines, exchange of information, requirements for the data-mining tool and information to be collected on the identification of beneficiaries in relation to the obligations as set out in paragraphs 1, 2 and 4;

• (b) the notification and communication to be made by the Member States to the Commission in relation to the obligations set out in paragraphs 5 and 7.

Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 103(3).

Article 60

Rules regarding checks to be carried out

Member States shall ensure that a level of checks needed for an effective management of the risks to the financial interest of the Union is carried out. The relevant authority shall draw its check sample from the entire population of applicants comprising, where appropriate, a random part and a risk-based part.

Where a beneficiary has been selected for an on-the-spot check on an aid application, on a payment claim or on the compliance with the rules on conditionality pursuant to Article 83, Member States shall, as far as possible and taking account of the associated risks, not select that beneficiary for a subsequent check and control sample for that year, except when circumstances require a further check in order to ensure the effective protection of the financial interests of the Union. This provision shall not reduce the level of checks.

Checks shall not be carried out at the level of the EIB or other international financial institutions in which a Member State is a shareholder.

• (a) with regard to hemp as referred to in Article 4(4), second subparagraph, of Regulation (EU) 2021/2115, rules on the specific control measures and methods for determining tetrahydrocannabinol levels;

• (b) with regard to cotton as referred to in Title III, Chapter II, Section 3, Subsection 2, of Regulation (EU) 2021/2115, a system for checks of the approved interbranch organisations;

• (c) with regard to wine as referred to in Regulation (EU) No 1308/2013, rules on the measurement of areas, on checks and on rules governing the specific financial procedures for the improvement of checks;

• (d) the tests and methods to be applied in order to establish the eligibility of products for public intervention and private storage, and the use of tendering procedures, both for public intervention and for private storage;

• (e) other rules on the checks to be conducted by the Member States as regards the measures laid down in Chapter IV of Regulation (EU) No 228/2013 and in Chapter IV of Regulation (EU) No 229/2013.

Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 103(3).

Article 61

Non-compliance with public procurement rules

Where the non-compliance concerns Union or national rules on public procurement, Member States shall ensure that the part of the aid not to be paid or to be withdrawn is determined on the basis of the gravity of the non-compliance and in accordance with the principle of proportionality.

Member States shall ensure that the legality and regularity of the transaction shall only be affected up to the level of the part of the aid not to be paid or to be withdrawn.

Article 62

Circumvention clause

Without prejudice to specific provisions of Union law, Member States shall take effective and proportionate measures to avoid provisions of Union law to be circumvented and ensure, in particular, that no advantage provided for under agricultural legislation is granted in favour of a natural or legal person in respect of whom it is established that the conditions required for obtaining such advantages were created artificially, contrary to the objectives of that legislation.

Article 63

Compatibility of interventions for the purposes of checks in the wine sector

For the purposes of applying the interventions in the wine sector referred to in Title III, Chapter III, Section 4, of Regulation (EU) 2021/2115, Member States shall ensure that the administration and control procedures applied to those interventions are compatible with the integrated system referred to in Chapter II of this Title as regards:

• (a) the identification systems for agricultural parcels;

• (b) the checks.

Article 64

Securities

• (a) specify the responsible party in the event that an obligation is not met;

• (b) lay down the specific situations in which the competent authority may waive the requirement of a security;

• (c) lay down the conditions applying to the security to be lodged and the guarantor and the conditions for lodging and releasing that security;

• (d) lay down the specific conditions related to the security lodged in connection with advance payments;

• (e) set out the consequences of breaching the obligations for which a security has been lodged, as provided for in paragraph 1, including the forfeiting of securities and the rate of reduction to be applied on release of securities for refunds, licences, offers, tenders or specific applications, as well as, where an obligation covered by that security has not been met either wholly or in part, taking into account the nature of the obligation, the quantity for which the obligation has been breached, the period exceeding the time limit by which the obligation should have been met and the time by which evidence that the obligation has been met is produced.

• (a) the form of the security to be lodged and the procedure for lodging the security, for accepting it, and for replacing the original security;

• (b) the procedures for the release of a security;

• (c) the notifications to be made by Member States and by the Commission.

Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 103(3).

CHAPTER II Integrated administration and control system

Article 65

Scope and definitions relating to this Chapter

• (a) ‘geo-spatial application’ means an electronic application form that includes an information technology application based on a geographic information system that allows beneficiaries to spatially declare the agricultural parcels of the holding as defined in Article 3, point (2), of Regulation (EU) 2021/2115 and non-agricultural areas claimed for payment;

• (b) ‘area monitoring system’ means a procedure of regular and systematic observation, tracking and assessment of agricultural activities and practices on agricultural areas by Copernicus Sentinels satellite data or other data with at least equivalent value;

• (c) ‘system for the identification and registration of animals’ means the system for the identification and registration of kept terrestrial animals laid down by Part IV, Title I, Chapter 2, Section 1, of Regulation (EU) 2016/429 of the European Parliament and of the Council ([^E0007]);

• (d) ‘agricultural parcel’ means a unit, defined by Member States, of agricultural area as determined in accordance with Article 4(3) of Regulation (EU) 2021/2115;

• (e) ‘geographic information system’ means a computer system capable of capturing, storing, analysing, and displaying geographically referenced information;

• (f) ‘automatic claim system’ means an application system for area- or animal-based interventions in which the data required by the administration on at least individual areas or animals claimed for aid are available in official computerised databases managed by the Member State and made available to the beneficiary where necessary.

Article 66

Elements of the integrated system

• (a) an identification system for agricultural parcels;

• (b) a geo-spatial application system and, where applicable, an animal-based application system;

• (c) an area monitoring system;

• (d) a system for the identification of beneficiaries of the interventions and measures referred to in Article 65(2);

• (e) a control and penalty system;

• (f) where applicable, a system for the identification and registration of payment entitlements;

• (g) where applicable, a system for the identification and registration of animals.

Article 67

Data keeping and sharing

The data and documentation referred to in the first subparagraph relating to the current calendar year or marketing year and to the previous 10 calendar years or marketing years shall be accessible for consultation through the digital databases of the competent authority of the Member State.

Data used for the area monitoring system may be stored as raw data on a server external to the competent authorities. Those data shall be kept on a server for at least three years.

By way of derogation from the second subparagraph, Member States which acceded to the Union in or after the year 2013 shall only be required to ensure that the data are available for consultation from the year of their accession.

By way of derogation from the second subparagraph, Member States shall only be required to ensure that the data and documentation related to the area monitoring system referred to in Article 66(1), point (c), are available for consultation as of the date of the implementation of the area monitoring system.

Article 68

Identification system for agricultural parcels

• (a) uniquely identifies each agricultural parcel and units of land containing non-agricultural areas considered eligible by the Member States for receiving the aid for the interventions referred to in Title III of Regulation (EU) 2021/2115;

• (b) contains up-to-date values on the areas considered eligible by the Member States for receiving the aid for the interventions referred to in Article 65(2);

• (c) enables the correct localisation of agricultural parcels and non-agricultural areas claimed for payment.

Article 69

Geo-spatial and animal-based application system

Where a Member State has taken the decision referred to in Article 4(3), point (c), second subparagraph, of Regulation (EU) 2021/2115, it shall ensure that beneficiaries who have already submitted the application referred to in paragraph 1 of this Article have a possibility to amend or withdraw, totally or partially, their application. If Member States fail to ensure that beneficiaries have that possibility, they shall not impose any penalty on the beneficiaries as a result of that decision.

Article 70

Area monitoring system

Article 70a

Quality assessment of the identification system for agricultural parcels, of the geo-spatial application system and of the area monitoring system

Member States shall annually assess the quality of the elements referred to in Articles 68, 69 and 70 in accordance with the methodology established at Union level. Where the assessment reveals deficiencies in the systems, the Member State concerned shall adopt appropriate remedial actions or, failing that, the Commission shall request that that Member State establish an action plan in accordance with Article 42.

Following the assessment referred to in the first paragraph, Member States shall submit to the Commission an assessment report and, where appropriate, the remedial actions and the timetable for their implementation by 15 February following the calendar year concerned.

Article 71

System for the identification of beneficiaries

The system for recording the identity of each beneficiary of the interventions and measures referred to in Article 65(2) shall guarantee that all applications submitted by the same beneficiary can be identified as such.

Article 72

Control and penalty system

Member States shall set up a control and penalty system referred to in Article 66(1), point (e). Member States, through the paying agencies or the bodies delegated by them, shall annually carry out administrative checks on the aid application and payment claims to verify legality and regularity in accordance with Article 59(1), point (a). Those checks shall be supplemented by on-the-spot checks, which may be executed remotely through the use of technology.

However, Member States may choose not to carry out on-the-spot checks where the eligibility conditions of interventions are monitored under the area monitoring system referred to in Article 70.

Article 73

System for the identification and registration of payment entitlements

The system for the identification and registration of payment entitlements shall allow for verification of the entitlements with the applications and the identification system for agricultural parcels.

Article 74

Delegated powers of the Commission relating to the integrated system

The Commission is empowered to adopt delegated acts in accordance with Article 102 which are necessary to ensure that the integrated system provided for in this Chapter is implemented in an efficient, coherent and non-discriminatory way which protects the financial interests of the Union, supplementing this Regulation with:

• (a) rules on the quality assessment referred to in Article 70a;

• (b) rules on the identification system for agricultural parcels, the system for the identification of beneficiaries and the system for the identification and registration of payment entitlements referred to in Articles 68, 71 and 73.

Article 75

Implementing powers relating to Articles 68 to 70a

The Commission may adopt implementing acts laying down rules on:

• (a) the form and content, and the arrangements for transmitting or making available to the Commission, of:
• (i) the assessment reports referred to in Article 70a;
• (ii) the remedial actions referred to in Article 70a;

• (b) basic features of, and rules on, the aid application system under Article 69 and the area monitoring system referred to in Article 70, including the parameters of the gradual increase of the number of interventions under the area monitoring system.

Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 103(3).

CHAPTER III Scrutiny of transactions

Article 76

Scope and definitions relating to this Chapter

The Commission is empowered to adopt delegated acts in accordance with Article 102 supplementing this Regulation with a list of interventions which, due to their design and control requirements, are unsuited for additional ex-post controls by way of scrutiny of commercial documents and, therefore, are not to be subject to such scrutiny under this Chapter.

• (a) ‘commercial document’ means all books, registers, vouchers and supporting documents, accounts, production and quality records, correspondence relating to the undertaking’s business activity, and commercial data, in whatever form they may take, including electronically stored data, in so far as those documents or data relate directly or indirectly to the transactions referred to in paragraph 1;

• (b) ‘third party’ means any natural or legal person directly or indirectly connected with transactions carried out within the financing system by the EAGF.

Article 77

Scrutiny by Member States

Article 78

Cross-checks

• (a) comparisons with the commercial documents of suppliers, customers, carriers and other third parties;

• (b) physical checks, where appropriate, upon the quantity and nature of stocks;

• (c) comparison with the records of financial flows leading to or consequent upon the transactions carried out within the financing system by the EAGF;

• (d) checks, in relation to bookkeeping, or records of financial movements showing, at the time of the scrutiny, that the documents held by the paying agency by way of justification for the payment of aid to the beneficiary are accurate.

Article 79

Mutual assistance

Member States shall assist each other upon request for the purpose of carrying out the scrutiny provided for in this Chapter in the following cases:

• (a) where an undertaking or third party is established in a Member State other than that in which payment of the amount in question has or should have been made or received;

• (b) where an undertaking or third party is established in a Member State other than that in which the documents and information required for scrutiny are to be found.

Article 80

Planning and reporting

• (a) their control plan referred to in paragraph 1 and the number of undertakings to be scrutinised and their breakdown by sector on the basis of the amounts relating to them;

• (b) a detailed report on the application of this Chapter for the previous scrutiny period, including the results of any scrutiny carried out under Article 79.

Article 81

Access to information and scrutiny by the Commission

Article 82

Implementing powers relating to the scrutiny of transactions

The Commission shall adopt implementing acts laying down rules necessary for the uniform application of this Chapter and in particular relating to the following:

• (a) the performance of the scrutiny referred to in Article 77 as regards the selection of undertakings, rate and the timescale for the scrutiny;

• (b) the performance of the mutual assistance referred to in Article 79;

• (c) the content of reports referred to in Article 80(2), point (b), and any other notification needed under this Chapter.

Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 103(3).

CHAPTER IV Control system and administrative penalties in relation to conditionality

Article 83

Control system for conditionality

• (a) beneficiaries receiving direct payments under Title III, Chapter II, of Regulation (EU) 2021/2115;

• (b) beneficiaries receiving annual payments in accordance with Articles 70, 71 and 72 of Regulation (EU) 2021/2115;

• (c) beneficiaries receiving support in accordance with Chapter IV of Regulation (EU) No 228/2013 or Chapter IV of Regulation (EU) No 229/2013.

1a. By way of derogation from paragraph 1 of this Article, the control system for conditionality shall not apply to beneficiaries receiving payments referred to in Article 28 of Regulation (EU) 2021/2115.

2a. Farmers with a maximum size of holding not exceeding 30 hectares of agricultural area declared in accordance with Article 69(1) of this Regulation shall be exempt from controls of GAEC standard 7 requirements, as defined in Annex III to Regulation (EU) 2021/2115, under a system set up in accordance with paragraph 1 of this Article.

Those systems shall be compatible with the control systems referred to in paragraph 1.

• (a) ‘requirement’ means each individual statutory management requirement under Union law referred to in Article 12 of Regulation (EU) 2021/2115 within a given legal act, differing in substance from any other requirements of the same legal act;

• (b) ‘legal act’ means each of the individual directives and regulations referred to in Article 12 of Regulation (EU) 2021/2115;

• (c) ‘reoccurrence of non-compliance’ means non-compliance with the same requirement or standard more than once within a consecutive period of three calendar years, provided that the beneficiary has been informed of previous non-compliance and, where relevant, has had the possibility to take the necessary measures to remedy that previous non-compliance.

• (a) shall include on-the-spot checks to verify the compliance of beneficiaries with the obligations laid down in Title III, Chapter I, Section 2, of Regulation (EU) 2021/2115;

• (b) may decide, depending on the requirements, standards, legal acts or areas of conditionality in question, to use the checks, including administrative checks, carried out under the control systems applicable to the respective requirement, standard, legal act or area of conditionality, provided the effectiveness of these checks is at least equal to the on-the-spot checks referred to in point (a);

• (c) may, where appropriate, make use of remote sensing or the area monitoring system or other relevant technologies assisting them to carry out the on-the-spot checks referred to in point (a);

• (d) shall establish the control sample for the on-the-spot checks referred to in point (a) of this paragraph to be carried out each year on the basis of an annual risk analysis that includes a random component and covers at least 1 % of the beneficiaries listed in paragraph 1 of this Article; where, pursuant to Article 60(1), third subparagraph, they do not select a beneficiary for a check or control sample, they shall ensure that the minimum control rate is respected;

• (e) as regards the obligations of conditionality in relation to Council Directive 96/22/EC ([^E0011]), shall consider the application of a specific sampling level of monitoring plans to fulfil the requirement of the minimum rate laid down in point (d) of this paragraph.

Article 84

System of administrative penalties for conditionality

The administrative penalties referred to in the first subparagraph shall only apply where the non-compliance is the result of an act or omission directly attributable to the beneficiary concerned, and where one or both of the following conditions are met:

• (a) the non-compliance is related to the agricultural activity of the beneficiary;

• (b) the non-compliance concerns the holding as defined in Article 3, point (2), of Regulation (EU) 2021/2115 or other areas managed by the beneficiary situated within the territory of the same Member State.

With regard to forest areas, however, the administrative penalties referred to in the first subparagraph shall not apply where no support is claimed for the area concerned in accordance with Articles 70 and 71 of Regulation (EU) 2021/2115.

1a. By way of derogation from paragraph 1 of this Article, the system of administrative penalties for conditionality shall not apply to beneficiaries receiving payments referred to in Article 28 of Regulation (EU) 2021/2115.

• (a) shall include rules on the application of administrative penalties in cases where the agricultural land, or an agricultural holding, or part thereof, is transferred during the calendar year or the years concerned; those rules shall be based on a fair and equitable attribution of the liability for non-compliance among transferors and transferees;

• (b) may decide, notwithstanding paragraph 1, not to apply an administrative penalty to a beneficiary per a calendar year when the amount of the penalty is EUR 100 or less; however, the beneficiary shall be informed about the finding of the non-compliance and about the obligation to take remedial action for the future;

• (c) shall provide that no administrative penalty be imposed if:
• (i) the non-compliance is due to force majeure or exceptional circumstances in accordance with Article 3,
• (ii) the non-compliance is due to an order from a public authority.

For the purposes of the first subparagraph, point (a), ‘transfer’ means any type of transaction whereby the agricultural land, or the agricultural holding, or part thereof, ceases to be at the disposal of the transferor.

Article 85

Application and calculation of the administrative penalties