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Funds financing agricultural expenditure
The financing of the various interventions and measures falling under the CAP from the general budget of the Union (‘the Union budget’) shall be made by: (a) the European Agricultural Guarantee Fund (EAGF); (b) the European Agricultural Fund for Rural Development (EAFRD).
EAGF expenditure
1. The EAGF shall be implemented either under shared management between the Member States and the Union in accordance with paragraph 2, or under direct management in accordance with paragraph 3. 2. The EAGF shall finance the following expenditure under shared management: (a) measures regulating or supporting agricultural markets laid down in Regulation (EU) No 1308/2013 of the European Parliament and of the Council ( 26 ) ; (b) the Union’s financial contribution to interventions in certain sectors as referred to in Title III, Chapter III, of Regulation (EU) 2021/2115; (c) interventions in the form of direct payments to farmers under the CAP Strategic Plan referred to under Article 16 of Regulation (EU) 2021/2115; (d) the Union’s financial contribution to information and promotion measures for agricultural products on the internal market of the Union and in third countries which are undertaken by Member States and which are selected by the Commission; (e) the Union’s financial contribution to the specific measures for agriculture in the outermost regions of the Union laid down in Regulation (EU) No 228/2013 and to the specific measures for agriculture in favour of the smaller Aegean islands laid down in Regulation (EU) No 229/2013. 3. The EAGF shall finance the following expenditure under direct management: (a) the promotion of agricultural products either directly by the Commission or through international organisations; (b) measures taken in accordance with Union law to ensure the conservation, characterisation, collection and utilisation of genetic resources in agriculture; (c) the establishment and maintenance of agricultural accounting information systems; (d) agricultural survey systems, including surveys on the structure of agricultural holdings.
EAFRD expenditure
The EAFRD shall be implemented under shared management between the Member States and the Union. It shall finance the Union’s financial contribution to the interventions for rural development referred to in Title III, Chapter IV, of Regulation (EU) 2021/2115 as specified in the CAP Strategic Plans and to actions referred to in Article 125 of that Regulation.
Other expenditure, including technical assistance
The EAGF and EAFRD may, either on the initiative of the Commission or on its behalf, each directly finance the preparatory, monitoring, administrative and technical support activities, and the evaluation, audit and inspection, required to implement the CAP. That includes, in particular: (a) measures required for the analysis, management, monitoring, information exchange and implementation of the CAP, including assessing its impacts, environmental performance and progress towards Union targets, as well as measures relating to the implementation of control systems and technical and administrative assistance; (b) the acquisition by the Commission of satellite data required for the area monitoring system in accordance with Article 24; (c) the actions taken by the Commission through remote-sensing applications used for the monitoring of agricultural resources in accordance with Article 25; (d) measures required to maintain and develop methods and technical means for information, interconnection, monitoring and control of the financial management of the funds used to finance the CAP; (e) the provision of information on the CAP in accordance with Article 46; (f) studies on the CAP and evaluations of measures financed by the EAGF and EAFRD, including the improvement of evaluation methods and the exchange of information on best practices under the CAP and consultations with the relevant stakeholders, as well as studies carried out with the European Investment Bank (EIB); (g) where relevant, contribution to executive agencies that are set up in accordance with Council Regulation (EC) No 58/2003 ( 27 ) and act in connection with the CAP; (h) contribution to measures which relate to the dissemination of information, raising awareness, promoting cooperation and exchanging experiences with the relevant stakeholders at Union level, and which are taken in the context of interventions for rural development, including the networking of the parties concerned; (i) information technology networks focusing on information processing and exchange, including corporate information technology systems, needed in connection with the management of the CAP; (j) measures required for the development, registration and protection of logos within the framework of the Union quality schemes in accordance with Article 44(2) of Regulation (EU) No 1151/2012 of the European Parliament and of the Council ( 28 ) and for the protection of intellectual property rights linked to it, and the necessary developments in information technology.
Competent authority
1. Each Member State shall designate a competent authority at ministerial level responsible for: (a) the issuing, reviewing and withdrawing of accreditation of paying agencies referred to in Article 9(2); (b) the designation and the issuing, reviewing and withdrawing of the accreditation of the coordinating body referred to in Article 10; (c) designating and withdrawing the designation of a certification body as referred to in Article 12, and ensuring that there is always a certification body designated; (d) carrying out the tasks assigned to the competent authority under this Chapter. 2. On the basis of an examination of the minimum conditions to be adopted by the Commission in accordance with Article 11(1), point (a), the competent authority shall, by way of a formal act, decide on the issuing or, following a review, the withdrawal of the accreditation of the paying agency and on the designation and accreditation and the withdrawal of the accreditation of the coordinating body. 3. The competent authority shall, by way of a formal act, decide on the designation, and the withdrawal of the designation, of the certification body, while ensuring that there is always a certification body designated. 4. The competent authority shall inform the Commission without delay of all accreditations and withdrawals of accreditation of the paying agency and of the designation and accreditation and withdrawal of accreditation of the coordinating body, as well as of the designation, and the withdrawal of the designation, of the certification body.
Paying agencies
1. Paying agencies shall be departments or bodies of the Member States and, where applicable, of their regions responsible for the management and control of expenditure referred to in Article 5(2) and Article 6. With the exception of making payment, paying agencies may delegate performance of the tasks referred to in the first subparagraph. 2. Member States shall accredit, as paying agencies, departments or bodies which have an administrative organisation and a system of internal control which provide sufficient guarantees that payments are legal, regular and properly accounted for. To that end, paying agencies shall comply with minimum conditions for the accreditation with regard to the internal environment, control activities, information and communication and monitoring laid down by the Commission pursuant to Article 11(1), point (a). Each Member State shall, taking into account its constitutional provisions, restrict the number of its accredited paying agencies: (a) to a single paying agency at national level or, where applicable, one per region; and (b) to a single paying agency for the management of both EAGF and EAFRD expenditure where paying agencies exist only at national level. Where paying agencies are established at regional level, Member States shall, in addition, either accredit a paying agency at national level for aid schemes which, by their nature, have to be managed at national level, or confer the management of those schemes on their regional paying agencies. By way of derogation from the second subparagraph of this paragraph, Member States may maintain the paying agencies which have been accredited before 15 October 2020, provided that the competent authority, by means of the decision referred to in Article 8(2), confirms that they comply with the minimum conditions for accreditation referred to in the first subparagraph of this paragraph. Paying agencies which have not managed EAGF or EAFRD expenditure for at least three years shall have their accreditation withdrawn. Member States shall not accredit any new additional paying agency after 7 December 2021, except for cases referred to in the second subparagraph, point (a), where, taking into account the constitutional provisions, additional regional paying agencies may be necessary. 3. For the purposes of Article 63(5) and (6) of the Financial Regulation, the person in charge of the accredited paying agency shall, by 15 February of the year following the agricultural financial year (‘financial year’) concerned, draw up and provide the Commission with the following: (a) the annual accounts on the expenditure incurred in the execution of the tasks entrusted to that accredited paying agency, as provided for in Article 63(5), point (a), of the Financial Regulation, accompanied by the requisite information for the clearance in accordance with Article 53 of this Regulation; (b) the annual performance report referred to in Article 54(1) of this Regulation and Article 134 of Regulation (EU) 2021/2115 showing that the expenditure was effected in accordance with Article 37 of this Regulation; (c) an annual summary of the final audit reports and of controls carried out, an analysis of the nature and extent of errors and weaknesses identified in governance systems, as well as corrective action taken or planned, as provided for in Article 63(5), point (b), of the Financial Regulation; (d) a management declaration as provided for in Article 63(6) of the Financial Regulation as to: (i) the fact that the information is properly presented, complete and accurate, as provided for in Article 63(6), point (a), of the Financial Regulation, (ii) the proper functioning of the governance systems put in place, with the exception of the competent authority referred to in Article 8, the coordinating body referred to in Article 10 and the certification body referred to in Article 12 of this Regulation, ensuring that the expenditure was effected in accordance with Article 37 of this Regulation, as provided for in Article 63(6), points (b) and (c), of the Financial Regulation. The deadline of 15 February referred to in the first subparagraph of this paragraph may be extended on an exceptional basis by the Commission to 1 March, upon communication by the Member State concerned, as provided for in Article 63(7), second subparagraph, of the Financial Regulation. 4. Where an accredited paying agency does not meet or no longer meets one or more of the minimum conditions for accreditation referred to in paragraph 2, first subparagraph, the Member State concerned, acting on its own initiative or at the request of the Commission, shall withdraw the accreditation of that paying agency unless the paying agency makes the necessary changes within a period to be determined by the competent authority of that Member State depending on the severity of the problem. 5. The paying agencies shall manage, and ensure the control of, the operations linked to public intervention for which they are responsible and they shall retain overall responsibility in that field. Where support is provided through a financial instrument which is implemented by the EIB or another international financial institution in which a Member State is a shareholder, the paying agency shall rely on a control report supporting the payment applications submitted. Those institutions shall provide the Member States with the control report. 6. For the purposes of Article 33, for EAFRD expenditure, an additional performance report shall be provided, by 30 June 2030, in accordance with paragraph 3 of this Article and with Article 10(3), covering the period until 31 December 2029.
Coordinating bodies
1. Where more than one paying agency is accredited in a Member State, that Member State shall designate a public coordinating body, to which it shall assign the following tasks: (a) to collect the information to be provided to the Commission and to send that information to the Commission; (b) to supply to the Commission the annual performance report referred to in Article 54(1) of this Regulation and Article 134 of Regulation (EU) 2021/2115; (c) to take or coordinate actions with a view to resolving any deficiencies of a common nature and to inform the Commission of any follow-up; (d) to promote and, where possible, ensure the harmonised application of Union rules. 2. As regards the processing of the information of a financial nature referred to in paragraph 1, point (a), the coordinating body shall be subject to specific accreditation by the Member State. 3. The annual performance report referred to in paragraph 1, point (b), of this Article shall be covered by the scope of the opinion referred to in Article 12(2) and it shall be submitted to the Commission together with a management declaration covering the compilation of the entire report.
Commission powers relating to paying agencies and coordinating bodies
1. The Commission is empowered to adopt delegated acts in accordance with Article 102 to ensure the sound operation of the paying agencies and coordinating bodies provided for in Articles 9 and 10, supplementing this Regulation with rules on: (a) the minimum conditions for the accreditation of the paying agencies referred to in Article 9(2), first subparagraph, and for the designation and accreditation of the coordinating bodies referred to in Article 10; (b) the obligations of the paying agencies as regards public intervention, as well as the rules on the content of their management and control responsibilities. 2. The Commission shall adopt implementing acts laying down rules on: (a) the procedures for issuing, withdrawing and reviewing accreditation of paying agencies and for designation and issuing, withdrawing and reviewing accreditation of coordinating bodies, as well as the procedures for the supervision of the accreditation of paying agencies; (b) the arrangements and procedures for the checks underlying the management declaration of the paying agencies referred to in Article 9(3), first subparagraph, point (d), as well as its structure and format; (c) the functioning of the coordinating body and the submission of information to the Commission in accordance with Article 10. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 103(3).
Certification bodies
1. The certification body shall be a public or private audit body designated by the Member State for a period of at least three years, without prejudice to national law. Where it is a private audit body and where the applicable Union or national law so requires, it shall be selected by the Member State by means of a public tendering procedure. A Member State that designates more than one certification body may appoint a public certification body at national level to be responsible for coordination. 2. For the purposes of Article 63(7), first subparagraph, of the Financial Regulation, the certification body shall issue an opinion, drawn up in accordance with internationally accepted audit standards, which shall establish whether: (a) the accounts give a true and fair view; (b) the Member States’ governance systems put in place function properly, in particular: (i) the governance bodies referred to in Articles 9 and 10 of this Regulation and Article 123 of Regulation (EU) 2021/2115, (ii) the basic Union requirements, (iii) the reporting system put in place for the purposes of the annual performance report referred to in Article 134 of Regulation (EU) 2021/2115; (c) the performance reporting on output indicators for the purposes of the annual performance clearance referred to in Article 54 of this Regulation and the performance reporting on result indicators for the multiannual performance monitoring referred to in Article 128 of Regulation (EU) 2021/2115, demonstrating that Article 37 of this Regulation is complied with, is correct; (d) the expenditure for the measures laid down in Regulations (EU) No 228/2013, (EU) No 229/2013 and (EU) No 1308/2013 and in Regulation (EU) No 1144/2014 of the European Parliament and of the Council ( 29 ) for which reimbursement has been requested from the Commission is legal and regular. That opinion shall also state whether the examination calls into question the assertions made in the management declaration referred to in Article 9(3), first subparagraph, point (d). The examination shall also cover the analysis of the nature and extent of errors and weaknesses identified in governance systems by audit and controls, as well as corrective action taken or planned by the paying agency, referred to in Article 9(3), first subparagraph, point (c). Where support is provided through a financial instrument which is implemented by the EIB or another international financial institution in which a Member State is a shareholder, the certification body shall rely on the annual audit report drawn up by the external auditors of those institutions. Those institutions shall provide the Member States with the annual audit report. 3. The certification body shall have the necessary technical expertise, as well as knowledge of the CAP. It shall be operationally independent from the paying agency and the coordinating body concerned as well as from the competent authority which has accredited that paying agency and the bodies responsible for the implementation and the monitoring of the CAP. 4. The Commission shall adopt implementing acts laying down rules on the functioning of the certification bodies, including the checks to be carried out and the bodies subject to those checks, and on the certificates and the reports, together with the documents accompanying them, to be drawn up by those bodies. The implementing acts shall also set out: (a) the audit principles on which the opinions of the certification bodies are based, including an assessment of the risks, internal controls and the level of audit evidence required; (b) the audit methods to be used by the certification bodies, having regard to international standards on auditing, to deliver their opinions. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 103(3).
Exchange of best practices
The Commission shall promote the exchange of best practices between the Member States, in particular as regards the work of the governance bodies under this Chapter.
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