Thursday, 28 October 2004

Brussels criticised over recovery of CAP fraud


Three quarters of the 3.1 billion euro squandered in irregular agricultural payments from 1971-2002 has not been recovered due to inefficiencies at both Member State and Commission level, according to a new report.

The two billion euro plus in fradulent payments is not being recovered or written off, due to weaknesses both in Brussels and in Member States, according to a new report published today by the European Court of Auditors (ECA).

Some of the deficiences highlighted by the report include: delays by Member States in notifying the Commission and discrepancies in the data provided.

The ECA also blames “national administrative delays” and “the Commission’s reluctance to accept offers of partial settlement”.

When CAP (common agricultural policy) payments of more than 4000 euro are found to be “irregular” or fraudulent, Member States must notify the Commission and attempt to recover the payments.

If the payments cannot be recovered, and the Member State was not negligent in the matter, the costs are covered by the EU or written off as unrecoverable.

Disappointment

David Bostock, an ECA member who presented the report, said in a statement, “recovery of reported irregular payments is disappointingly partial and slow”.

The fraud is concentrated in the export and fruit and vegetable sectors, said the ECA.

The sort of fraud that might occur, according to ECA officials is that exporters do not export what they say they are exporting and receive export refunds.

Fruit and vegetable producers might also be paid irregularly for destroying fruit when there is a surplus.

The scale of the problem is by far and away the worst in Italy, where 1.7 billion euro has been detected as irregular since 1971, representing over half of the EU total.

Commission response

Brussels, however, is responding to the problem, according to Mr Bostock.

The ECA proposed that improvements needed to be made to the information member states made available to the Commission and that decisions on whom should bear the costs of write-offs be clarified.

And he noted today, “The Commission has made a number of proposals in response to our audit”.

“Perhaps the most significant is where member states fail to recover amounts due within four to six years and have not been negligent, the costs of write-off will be shared equally with the Commission”.

He concluded, “we have not yet had a chance to study this proposal in detail, but at first sight it promises to be a positive and bold step in the right direction”.

The EU spends more than 40 billion euro annually on the CAP.

By Richard Carter

This article first appeared on http://www.euobserver.com