Commission Delegated Regulation (EU) 2022/127 of 7 December 2021 supplementing Regulation (EU) 2021/2116 of the European Parliament and of the Council with rules on paying agencies and other bodies, financial management, clearance of accounts, securities and use of euro

CHAPTER I

Paying agencies and other bodies

Article 1

Conditions for the accreditation of paying agencies

Member States shall accredit as paying agencies departments or bodies, which fulfil the conditions laid down in this paragraph and meet the criteria referred to in paragraphs 2 and 3. Paying agencies carrying out the management and control of expenditure as provided for in Article 9(1) of Regulation (EU) 2021/2116 shall provide, in respect of payments made by them and as regards communicating and keeping information, sufficient guarantees that:

(a) as regards types of intervention referred to in Regulation (EU) 2021/2115, the expenditure matches the corresponding reported output and that it has been effected in accordance with the applicable governance systems;

(b) payments are legal and regular as regards the measures laid down in Regulations (EU) No 228/2013 (¹), (EU) No 229/2013 (²), (EU) No 1308/2013 and (EU) No 1144/2014 of the European Parliament and of the Council (³);

(c) accurate and exhaustive accounts are kept of the payments made;

(d) the checks laid down by Union legislation are made;

(e) the requisite documents are presented within the time limits and in the form set out by Union rules;

(f) the documents are accessible and kept in a manner which ensures their completeness, validity and legibility over time, including with regard to electronic documents within the meaning of Union rules.

In order to be accredited, a paying agency shall have an administrative organisation and a system of internal control which comply with the criteria set out in Annex I regarding:

(a) internal environment;

(b) control activities;

(c) information and communication;

(d) monitoring.

Article 2

Conditions for the accreditation of coordinating bodies

In order to be accredited, the coordinating body shall ensure that:

(a) declarations to the Commission are based on information from properly authorised sources;

(b) the annual performance report referred to in Article 54(1) of Regulation (EU) 2021/2116 and Article 134 of Regulation (EU) 2021/2115 is covered by the scope of the opinion referred to in Article 12(2) of Regulation (EU) 2021/2116 and its transmission is accompanied by a management declaration covering the compilation of the entire report;

(c) declarations to the Commission are properly authorised before transmission;

(d) a proper audit trail exists to support the information transmitted to the Commission;

(e) a record of information received and transmitted is securely stored in computerised format.

Article 3

Obligations of the paying agency as regards public intervention

The paying agencies may delegate their powers in relation to public intervention measures to intervention agencies which meet the conditions of approval laid down in point 1.D of Annex I to this Regulation or act through other paying agencies.

The paying agencies or intervention agencies may, without prejudice to their overall responsibility relating to public storage:

(a) entrust the management of certain public storage measures to natural or legal persons storing bought-in agricultural products (‘storers’);

(b) mandate natural or legal persons to carry out certain specific tasks laid down by the sectoral agricultural legislation.

If the paying agencies entrust the management to storers as referred to in the first subparagraph, point (a), such management shall be carried out under storage contracts on the basis of the obligations and general principles set out in Annex IV.

The obligations of paying agencies with regard to public storage shall be, in particular, as follows:

(a) to keep stock accounts and financial accounts for each product covered by an intervention measure involving public storage, based on the operations they carry out from 1 October of one year to 30 September of the following year, this period being referred to as an ‘accounting year’;

(b) to keep an up-to-date list of the storers with whom they have concluded public storage contracts. This list shall contain references allowing the exact identification of all storage points, their capacity, the number of warehouses, cold stores and silos, and drawings and diagrams thereof;

(c) to make available to the Commission the standard contracts used for public storage, the rules laid down for the taking-over of products, their storage and removal from the storehouses of the storers, and the rules applicable to the liability of storers;

(d) to keep centralised, computerised stock accounts of all stocks, covering all storage places, all products and all the quantities and qualities of the different products, specifying in each case the weight (net and gross, where applicable) or the volume;

(e) to perform all operations relating to the storage, conservation, transport or transfer of intervention products in accordance with Union and national legislation, without prejudice to the responsibility of the purchasers, of the other paying agencies involved in an operation and of any other persons acting on instruction in this regard;

(f) to conduct checks on places where intervention stocks are held, throughout the year, at irregular intervals and without prior warning. However, provided that the purpose of the control is not jeopardised, advance notice may be given, but shall be strictly limited to the minimum time-period necessary. Such notice shall not exceed 24 hours, except in duly justified cases;

(g) to conduct an annual stocktaking in accordance with Article 4.

Where, in a Member State, management of the public storage accounts for one or more products is carried out by more than one paying agency, the stock accounts and financial accounts referred to in the first subparagraph, points (a) and (d), shall be consolidated at Member State level before the corresponding information is notified to the Commission.

The paying agencies shall ensure:

(a) that products covered by Union intervention measures are properly conserved by checking the quality of stored products at least once a year;

(b) the integrity of intervention stocks.

The paying agencies shall inform the Commission immediately:

(a) of cases where extending the storage period of a product is likely to result in its deterioration;

(b) of quantitative losses or deterioration of the product due to natural disasters.

Where situations referred to in the first subparagraph are applicable, the Commission shall adopt the appropriate decision:

(a) as regards the situations referred to in the first subparagraph, point (a), in accordance with the examination procedure referred to in Article 229(2) of Regulation (EU) No 1308/2013;

(b) as regards the situations referred to in the first subparagraph, point (b), in accordance with the examination procedure referred to in Article 102(3) of Regulation (EU) 2021/2116.

Article 4

Inventory

They shall compare the results of the inventory with the accounting data. Any differences in quantities found, and the amounts resulting from differences in quality found during checks, shall be accounted for in accordance with the rules adopted pursuant to Article 47(3), point (a) of Regulation (EU) 2021/2116.

CHAPTER II

Financial management

Article 5

Non-compliance with the latest payment deadline

Where EAGF or EAFRD expenditure effected after the deadlines laid down by Union law is above the threshold of 5 % for the EAGF and the EAFRD respectively, all further expenditure effected late shall be reduced in accordance with the following rules:

(a) for EAGF expenditure: (i) expenditure effected in the first month following the month in which the payment deadline expired shall be reduced by 10 %; (ii) expenditure effected in the second month following the month in which the payment deadline expired shall be reduced by 25 %; (iii) expenditure effected in the third month following the month in which the payment deadline expired shall be reduced by 45 %; (iv) expenditure effected in the fourth month following the month in which the payment deadline expired shall be reduced by 70 %; (v) expenditure effected later than the fourth month following the month in which the payment deadline expired shall be reduced by 100 %;

(b) for EAFRD expenditure: (i) expenditure effected between 1 July and 15 October of the year in which the payment deadline expired shall be reduced by 25 %; (ii) expenditure effected between 16 October and 31 December of the year in which the payment deadline expired shall be reduced by 60 %; (iii) expenditure effected later than 31 December of the year in which the payment deadline expired shall be reduced by 100 %.

By way of derogation from paragraph 2, the following conditions shall apply:

(a) where for expenditure for interventions in the form of direct payments or EAFRD expenditure the threshold referred to in paragraph 2, first subparagraph, has not been used in full for payments made in respect of calendar year N no later than 15 October of year N + 1 for the EAGF and no later than 31 December of year N + 1 for the EAFRD and the remainder of the threshold exceeds 2 %, that remainder shall be reduced to 2 %;

(b) during a financial year N + 1, payments for interventions in the form of direct payments, other than payments provided for in Regulations (EU) No 228/2013 and (EU) No 229/2013, in respect of calendar years N-1 or earlier made after the payment deadline shall only be eligible for financing by the EAGF if the total amount of interventions in the form of direct payments made within financial year N+1, where applicable corrected to amounts before the adjustment provided for in Article 17 of Regulation (EU) 2021/2116, does not exceed the ceiling laid down in Annex V to Regulation (EU) 2021/2115 in respect of calendar year N, in accordance with Article 87(1) of that Regulation;

(c) expenditure exceeding the limits referred to in point (a) or (b) shall be reduced by 100 %.

The amounts of the reimbursements referred to in Article 17(3), second subparagraph, of Regulation (EU) 2021/2116 shall not be taken into account to check whether the condition laid down in the first subparagraph, point (b), of this paragraph is fulfilled.

However, the first subparagraph shall not apply for expenditure exceeding the ceiling referred to in paragraph 3, first subparagraph, point (b).

Any overrun of payment deadline shall be taken into account in the accounts clearance decision referred to in Article 53 of Regulation (EU) 2021/2116, at the latest.

Article 6

Non-compliance with the earliest date of payment

As regards EAGF expenditure, if Member States are allowed to pay advances up to a certain maximum amount before the earliest payment date laid down by Union law, this expenditure shall be considered as expenditure eligible for Union financing. Any expenditure paid above this maximum amount shall be ineligible for Union financing except in duly justified cases where exceptional management conditions are encountered for certain interventions or measures or where justified reasons are provided by the Member States. In such cases, the expenditure paid above the maximum amount shall be eligible for Union financing subject to a reduction of 10 %.

The corresponding reduction shall be taken into account in the accounts clearance decision referred to in Article 53 of Regulation (EU) 2021/2116, at the latest.

Article 7

Compensation by paying agencies

Commitment appropriations and payment appropriations generated by assigned revenue shall be open once this revenue has been assigned to budget lines.

Article 8

Late adoption of Union budget

The Commission shall take into account the balance of amounts not reimbursed to the Member States in subsequent payments.

Article 9

Deferral of monthly payments

The monthly payments referred to in Article 21 of Regulation (EU) 2021/2116 to the Member States may be deferred where the communications as referred to in Article 90(1), point (c)(i) and (ii), of that Regulation arrive late or contain discrepancies, which necessitate further checks. The Commission shall inform the Member States concerned in due time of its intention to defer payments.

Article 10

Suspension of payments in relation to the annual clearance

Where the Commission suspends the monthly payments referred to in Article 21(3) of Regulation (EU) 2021/2116 pursuant to Article 40(1), first subparagraph, of that Regulation, the following rates of suspension of payments shall apply:

(a) if the Member State does not submit the documents referred to in Articles 9(3) and 12(2) of Regulation (EU) 2021/2116 by 1 March, 1 % of the total amount of the monthly payments referred to in Article 21(3) of that Regulation;

(b) if the Member State does not submit the documents referred to in Articles 9(3) and 12(2) of Regulation (EU) 2021/2116 by 1 April, 1,5 % of the total amount of the monthly payments referred to in Article 21(3) of that Regulation.

Article 11

Suspension of payments in relation to the performance clearance

Article 12

Applicable exchange rate for drawing up declarations of expenditure

CHAPTER III

Clearance of accounts and other checks

Article 13

Criteria and methodology for applying reductions in the framework of the performance clearance

By way of derogation from the first subparagraph, Member States are not required to provide justifications for the purpose of the annual performance clearance for deviations of realised unit amounts from planned unit amounts where the total expenditure corresponding to these deviations does not exceed 2 % of the total expenditure declared in the annual performance report in accordance with Article 134(5), point (b), of Regulation (EU) 2021/2115 for the financial year concerned. For the calculation towards this threshold only deviations resulting in excess expenditure shall be taken into account.

However, Member States shall provide justifications for the purposes of the annual performance clearance for all excesses of realised unit amounts from maximum planned unit amounts.

The Member State shall also provide explanations regarding the extent and effect of the corrective actions already taken to remedy the deviation and to prevent it from reoccurring.

Where the Member State cannot provide justifications for the deviations in accordance with paragraph 2, it may provide justifications for a part of the deviations.

Article 14

Criteria and methodology for applying corrections in the framework of the conformity procedure for the expenditure outside the scope of Regulation (EU) 2021/2115 or for the crop-specific payment for cotton and support for early retirement

In order to determine the amounts that may be excluded from Union financing, when finding that expenditure outside the scope of Regulation (EU) 2021/2115, for the crop-specific payment for cotton or support for early retirement under Title III, Chapter II, Section 3, Subsection 2, and Article 155(2) of that Regulation, respectively, has not been incurred in conformity with Union law, the Commission shall use its own findings and shall take into account the information made available by the Member States during the conformity clearance procedure carried out in accordance with Article 55 of Regulation (EU) 2021/2116.

In order to take into consideration the results submitted by Member States as referred to in paragraphs 2 and 3, the Commission shall be in a position to:

(a) assess the methods used for identifying or extrapolating, which shall be clearly described by the Member States;

(b) check the representativeness of the sample referred to in paragraph 3;

(c) check the content and results of the identification or extrapolation submitted to it;

(d) obtain sufficient and relevant audit evidence regarding the underlying data.

When applying extrapolated corrections as foreseen in paragraph 3, the Member States may use the paying agencies’ control statistics as confirmed by the certification body, or such body’s assessment of the level of error in the context of its audit referred to in Article 12 of Regulation (EU) 2021/2116, provided that:

(a) the Commission is satisfied with the work carried out by the certification bodies, both in terms of audit strategy and concerning the content, extent and quality of the actual audit work;

(b) the scope of the certification bodies’ work is consistent with the scope of the conformity clearance enquiry in question, in particular with regard to the measures or schemes;

(c) the amount of the penalties that should have been applied was taken into account in the assessments.

The level of flat-rate correction shall be established by taking into consideration in particular the type of non-conformity identified. To this effect, control deficiencies shall be divided between those relating to key and ancillary controls as follows:

(a) key controls shall be the administrative and on-the-spot checks necessary to determine the eligibility of the aid and the relevant application of reductions and penalties;

(b) ancillary controls shall be all other administrative operations required to correctly process claims.

If, in the framework of the same conformity clearance procedure, different non-conformities which would individually lead to distinct flat-rate corrections are established, then only the highest flat-rate correction shall apply.

When establishing the level of flat-rate corrections, the Commission shall specifically take into account one or more of the following circumstances demonstrating a higher gravity of the deficiencies revealing a greater risk of loss for the Union budget:

(a) one or more key controls are not applied or are applied so poorly or so infrequently that they are deemed ineffective in determining the eligibility of the claim or in preventing irregularities;

(b) three or more deficiencies are detected with respect to the same control system;

(c) the Member State’s application of a control system is found to be absent or gravely deficient, and there is evidence of wide-spread irregularity and negligence in countering irregular or fraudulent practices;

(d) similar deficiencies in the same sector are detected in a Member State in an enquiry that follows an enquiry in which they have been first detected and communicated to the Member State, account taken however of the corrective or compensating measures already taken by the Member State.

Article 15

Criteria and methodology for applying corrections in the framework of the conformity procedure for expenditure within the scope of Regulation (EU) 2021/2115