Non-compliance with the latest payment deadline
Article 5
1. Payments to a beneficiary made after the latest possible payment date may be considered eligible under the circumstances and conditions laid down in paragraphs 2 to 6. 2. Where European Agricultural Guarantee Fund (EAGF) expenditure under Article 5(2) or European Agricultural Fund for Rural Development (EAFRD) expenditure under Article 6 for interventions referred to in Article 65(2) of Regulation (EU) 2021/2116 effected after the deadline laid down by Union law is equal to the threshold of 5 % or less of the expenditure effected before the deadlines for the EAGF and the EAFRD respectively, no reduction of the monthly or interim payments shall be made. 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 %. 3. 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. 4. Where exceptional management conditions are encountered for certain interventions and measures or where justified reasons are advanced by the Member States, the Commission shall apply either different time scales from those laid down in paragraphs 2 and 3, and/or lower reductions or apply no reduction at all. However, the first subparagraph shall not apply for expenditure exceeding the ceiling referred to in paragraph 3, first subparagraph, point (b). 5. Checks on compliance with the payment deadline shall be made once each financial year on expenditure made by 15 October. 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. 6. The reductions referred to in this Article shall be applied without prejudice to the subsequent decision on annual performance clearance, referred to in Article 54 of Regulation (EU) 2021/2116 and the conformity procedure, referred to in Article 55 of that Regulation.