Paying Agency Regulations, 2004

L.N. 126 of 2004

AGRICULTURE AND FISHERIES INDUSTRIES

(FINANCIAL ASSISTANCE) ACT,

(CAP. 146)

Paying Agency Regulations, 2004

IN exercise of the powers conferred by article 7 of the

Agricultural and Fishing Industries (Financial Assistance) Act, the

Minister for Rural Affairs and the Environment, with the concurrence

of the Minister of Finance and Economic Affairs, has made the

following regulations>

The title of these regulations is the Paying Agency

Regulations, 2004.

In these regulations, unless the context otherwise requires -

“the Act” means or the Agricultural and Fisheries Industries

(Financial Assistance) Act<

“the Agency” means the entity established under regulation

3<

“aid application” means any application for aid under an

aid scheme<

“aid scheme” means a scheme that the Minister shall, from

time to time, designate by notice in the Gazette under which a

person may apply for aid in connection with the agricultural

and fisheries industries<

“authorised officer” means any public officer assigned to

carry out the duties with the Paying Agency<

“bankers of the agency” means the banking agency which

the Minister shall, from time to time, designate by notice in

the Gazette<

“claimant” means any person engaged in the agricultural

or fishing industry and persons desiring to engage therein

making an application for aid under the Act<

“certifying body” means such unit within the Internal Audit

and Investigations Directorate having the function to carry out

the audits of the Agency according to Article 3 of Commission

Regulation 1663#95<

“competent authority” means such authority established

by the Minister to accredit the Paying Agency according to the

criteria for accreditation laid down in Annex 1 to these

regulations<

“Commission Regulation 1663#95” means Commission

Regulation (EC) No. 1663#95 of 7 July 1995 laying down

detailed procedure for the clearance of the accounts of the

EAGGF Guarantee Section<

“Commission Regulation 2419#01” means Commission

Regulation (EC) No 2419#2001 of 11 December 2001 laying

down detailed rules for applying the integrated administration

and control system for certain Community aid schemes

established by Council Regulation (EEC) No 3508#92<

“data” has the meaning assigned to it in the Electronic Cap. 426.

Commerce Act<

“duly qualified institution” means a body licensed in

accordance with article 3 of Financial Institutions Act<

“Fund” or “EAGGF” means the European Agricultural

Guidance and Guarantee Fund (EAGGF)<

“Integrated Administration and Control System”, or “IACS

“ means the system described in Annex 2 to these regulations<

“Internal Audit and Investigations Directorate” means the

directorate established by Part IV of the Internal Audit and

Financial Investigations Act<

“Minister” means the Minister responsible for Agriculture

or the Minister responsible for Fisheries as the case may be,

and the Ministry shall be construed accordingly.

(1) There is hereby established a Paying Agency, which Establishment of

the Paying Agency

shall have the function set out in these regulations.

(2) The Paying Agency shall not commence to perform

its functions until it is accredited in accordance with to the criteria

laid down in Annex 1 to these regulations by the competent authority

and notice of such accreditation had been published in the Gazette,

nor shall the Paying Agency continue to perform its functions if its

accreditation is withdrawn by the competent authority.

(3)

The Paying Agency shall perform the following three

functions>

(a) the authorisation of payments from the aid scheme

and establishing the amounts that shall be paid to claimants in

conformity with the aid schemes<

(b) the execution of payments from the aid schemes by

issuing instructions to the bankers of the agency, or, in

appropriate cases, a governments payments office, to pay the

authorised amount to the claimant or his assignee< and

(c) the accounting for payments made under the scheme

but including the recording of the payment in the separate books

of accounts of the agency of EAGGF expenditure and the

preparation of periodic summaries of expenditure, including

monthly and annual declarations to the European Communities.

(4)

Furthermore, the Agency shall provide two services,

namely>

(a) an internal audit service, having the tasks referred to

in paragraph 3 (i) of the Annex to Commission Regulation

1663#95<

(b) a technical control service, having the tasks referred

to in paragraph 3 (ii) of the Annex of Commission Regulation

1663#95.

(5) (a) The Minister responsible for Agriculture and

Fisheries shall assign an officer from the Ministry to be the Manager

of the Paying Agency.

(b) The Manager of the Paying Agency shall be

responsible for the day-to-day administration of the Agency.

(c) The Manager shall be assisted by such authorised

officers as may be assigned to the Paying Agency.

The certifying body shall be responsible for controlling,

checking and reporting on audited accounts and the internal control

systems of the Agency as provided for in Article 3 of Commission

Regulation 1663#95.

(1) The Paying Agency may delegate its Paying Agency

may delegate

authorisation function or its technical control service provided that authorisation

such delegation is in compliance with the procedures laid down in function etc.

paragraph 4 of the Annex to Commission Regulation 1663#95.

(2) Where any scheme provides that applications and

payment authorisation in connection therewith shall be regulated by

an integrated administration and control system, the pertinent

provisions of the Integrated Administration and Control System

Rules in the Annex to these regulations shall apply.

(1) The internal audit service shall provide independent Internal audit

service.

and impartial audits for the Agency.

(2)

The functions of the internal audit service shall be>

(i) to ensure that the internal control of the agency

operates effectively<

(ii)

to ensure that accounts are accurate, complete and

timely<

(iii) to verify that the procedures adopted by the agency

are adequate to ensure compliance with Community regulations<

(iv) to ensure that the work carried out is performed

according to internationally accepted standards<

(v) to record all work and provide reports and

recommendations to the management of the agency<

(vi) to ensure that audit plans and reports are available

to the certifying body and officials of the European Union<

(vii) to draw up audit plans that for period each not

exceeding five years that ensure that all significant areas,

including the departments responsible for authorisation are

covered.

The Paying Agency shall be responsible for the authorising Authorisation of

Payments.

and effecting of payments and the updating of the accounting records

concerned.

(1) The Paying Agency shall implement procedures that

ensure that payments are made directly to the claimants, to their

bank account or their assignee>

Provided that assignees may be nominated in writing and may

not be so nominated by electronic means.

(2) The implementation procedures shall ensure that

monthly and annual declarations are complete, accurate and timely

and that any errors or omission are detected and corrected in

particular through checks and reconciliations performed at intervals

not exceeding three months.

(3) The Paying Agency shall recognise the amounts still

due to EAGGF and record these according to the procedures laid

down in Commission Regulation 1663#95.

Where claims are processed using a computer system, in

addition to such measures which the Minister may direct to be taken,

access to the computer system shall be protected and controlled in

such a way that>

(i) all information entered into the system is properly

validated to ensure that input errors are detected and corrected<

(ii) no data shall be entered, modified or validated except

by authorised officials<

(iii) where documents relating to the authorised claims

are retained by other bodies provided for by regulation 5(1),

procedures shall apply so that access is provided thereto to the

officer of the Paying Agency dealing with the claim, the Paying

Agency internal audit service, the certifying body and officials

of the European Union.

Where aid schemes allow for advance payments, such

payments shall be identified in the accounting records, and all

repayments shall be guaranteed by duly qualified institutions. The

advances are cleared within the stipulated time limits, and that those

overdue for clearing are promptly identified and the guarantees

promptly called upon and the clearing of advances is subject to the

same controls by authorising officers as are payments.

Without prejudice to regulation 8(3) hereof the Paying

Agency may delegate the task of the collection of amounts due to

the Guarantee section of the EAGGF in accordance with Commission

Regulation 1663#95.

The Paying Agency shall ensure aid applications are dealt Paying Agency to

deal with

with as expeditiously as possible.

application

expeditiously.

(1) Any dispute arising from claims made to the Paying Board for dispute

resolution.

Agency shall be referred to internal dispute resolution board, set up

in sub-regulation (2) of this regulation.

(2) There shall be a Board composed of a chairman, who

shall be a person who holds the warrant to practice as an advocate

and who has at least three years experience in the agricultural sector,

and two other members, with who shall each have at least one year

experience in the agricultural sector.

(3) The procedures of the Board shall be regulated

according to rules of procedure published by the Minister by notice

in the Gazette.

(4) The decisions of the Board shall be final and an appeal

shall lie to the to a Court of Appeal (Inferior Jurisdiction) constituted

in terms of article 41(6) of the Code of Organization and Civil

Procedure from such decision only on points of law as decided by

the Board in its decision, by means of an application to be filed in

the registry of that Court within ten days from the date of the decision

of the Board. Such application shall be served on the Paying Agency

which shall file a reply thereto within ten days of such service.

The Paying Agency Regulations, 2004 are hereby revoked. Revokes

of 2004.

ANNEX 1

CRITERIA FOR THE ACCREDITATION OF THE PAYING

AGENCY

1. The competent authority shall consist of three or more

members responsible for audit within the Office of Review of the

Ministry responsible for Agriculture appointed by the Minister

responsible for agriculture, who shall appoint one of such members

as chairman and shall be the authority responsible for the granting

or withdrawal of accreditation to the Paying Agency.

2. (1) The accreditation of the Paying Agency shall be

subject to the authorisation of the Minister and the competent

authority shall be informed about such accreditation.

(2) In the exercise of its function to accredit the Paying

Agency, the competent authority shall ensure that the Paying Agency

is in compliance with the criteria established in Commission

Regulation 1663#95 and such Guidelines as may be issued in respect

thereof by the organs of the European Union.

(3) In particular, the competent authority shall ensure that

the Paying Agency has set up the proper systems for>

i.

the arrangements for the authorisation of claims<

ii.

the arrangements for the execution of payments<

iii.

the safeguarding of the treasury<

iv.

the security of the computer system<

v. the maintenance of the accounting records, the division

of duties and<

vi. the adequacy of internal and external controls insofar

as transactions financed by the Guarantee Section of the EAGGF

are concerned.

(4) The Minister shall provide the competent authority

with the following documents to enable it to carry out its functions>-

i. A formal act in compliance with Commission

Regulation 1663#95, that lays down the powers, obligations and

responsibilities and administrative structure of the Paying

Agency<

ii. All the formal protocols regarding the delegated

functions in compliance with paragraph 4 of Commission

Regulation 1663#95 and such guidelines as may be issued in

respect thereof by the organs of the European Union. These

protocols shall be signed by the manager Paying Agency and

the respective services to whom the tasks have been delegated

as required by European Commission guideline no> 9

iii. A written guarantee that the services of the Paying

Agency which have been delegated shall operate according to

the relevant parts of Commission Regulation 1663#95, in

particular with regards to the separation of functions, the use

of check-lists, written procedures and administrative controls

and inspections<

iv. A written report on the administration and accounting

conditions and those adopted to protect the interests of the

Community with regards to payment of advances, guarantees

obtained, intervention stocks and the amounts due to the

Guarantee Fund of the EAGGF<

v. The manual of procedure for access to the computer

system for the payment of claims which lays down that the

access to the computer system shall be protected and the

passwords shall be changed regularly to avoid misuse.

Furthermore, the manual shall state that the computer system

shall be protected from unauthorized access by physical controls

and copies stored in a separate and safe location and shall back

up the data provided by the Office of Audit of the Paying Agency

in Brussels, in compliance with such guidelines as may be issued

in respect thereof by the organs of the European Union<

vi. The measures, in written form, adopted so as to avoid

conflict of interest that may arise with regard to certain

responsibilities within the Paying Agency, in particular those

referring to the authorisation, execution of payments and

accounting for payments functions.

(5) Furthermore, the Competent Authority shall ensure

that payments made by the Paying Agency are made only to the

claimant or to his bank account or to his assignee< that the

administrative procedure of payments of advances shall be identified

in the accounting records, and a procedure shall be adopted to ensure

that guarantees are obtained only from a financial institution

approved by the appropriate authorities< and the guarantees provided

are applied throughout the process and comply with the requirements

of the Paying Agency.

(6) The competent authority shall verify that all the

requirements of the Integrated Administrative Control system and

the accounting requirements are satisfactory particularly with regards

to the following requisites>-

i. the computerised databases shall record the data

obtained from the aid applications for each agricultural holding

to allow direct and immediate consultation<

ii. the IACS administrative controls shall ensure that aid

is calculated correctly and that no duplicate payments are made<

iii. the identification of agricultural land shall be done

either by land registry maps or other cartographic references,

aerial photographs, satellite images, or other equivalent

supporting references<

iv. the competent authority shall verify that the Paying

Agency has the necessary human resources for the identification

and registration of animals, where such verification shall be

based on the quality of the basic data (alphanumerical system

of identification of agricultural land and bovine animals), the

information available in the applications and the type of

computer programs<

v. the land and animals mentioned in the aid application

have to be identified separately and that the controls on the aid

application data are effective<

vi. the main role of the field inspectors shall be to check

that the statements made by the farmers in their aid application

are accurate and the Paying Agency shall effect a number of

field inspections, in accordance with Commission Regulation

2419 of the 11th December 2001<

vii. the rules for sanctions and reductions applied shall

be those established by IACS Regulation<

viii. the identity of each farmer who submits an aid

application subject to the integrated system is duly recorded<

ix. the creation of an accounting system that records all

the EAGGF payments and provides for the recording of

overpayments in a ledger of the debtor thereby providing a

system for the effective collection of credit<

x. the existence of a certifying body as established by

Article 3 of Commission Regulation 1663#95.

3. (1) The competent authority shall set the period within

which the abovementioned checks have to be fulfilled.

(2) The competent authority has a time limit of 60 days

within which to authorize the accreditation of the Paying Agency,

which shall commence from the day the Paying Agency first

communicates its interest in writing, to apply for accreditation.

(3) The competent authority shall authorize the

accreditation provided that the Paying Agency complies with all the

relevant requirements.

(4) The act of accreditation shall consist of a written

confirmation by the Ministry that the Paying Agency meets the

criteria for accreditation.

(5) The accreditation of the Paying Agency shall be

communicated to the European Commission.

4. (1) In the case where the Paying Agency that applied for

accreditation does not meet the criteria laid down in these regulations,

the competent authority may grant temporary accreditation.

(2) The competent authority shall establish the period of

time for which temporary accreditation may be granted and this

procedure shall be communicated to the European Commission.

ANNEX 2

INTEGRATED ADMINISTRATION AND CONTROL SYSTEM

(IACS) RULES

1. In this Annex, unless the context otherwise requires -

“Agricultural Land Registration Records” means the

records established on the basis of the specifications contained

in the returns required under article 3 of the Agricultural Returns Cap 84.

Ordinance<

“agricultural parcel” means a continuous area of land on

which a single crop is raised by a single farmer<

“animal” means any living member of the animal

kingdom, other than a human being, to which any aid scheme

designated by the Minister under point 4 of this annex applies<

“animal keeper” means any person responsible for animals

whether on a permanent or on a temporary basis, including

during transport or at a market<

“animal determined” means any animal which meets all

the conditions laid down in the rules for the granting of aid<

“arable land” means the total area of the agricultural parcel,

provided it is sown or set aside under normal conditions<

“area aid application” means an application for the

payment of financial assistance under aid schemes regarding

the crop sector designated by the Minister under point 4 of this

Annex and such application shall include the declaration of any

other uses of area, in particular the declaration of forage area

for the purposes of livestock aid applications<

“area determined” means an area which meets all the

conditions laid down in the rules for the granting of aid<

“authorised person” means any person, whether or not

an officer of the Paying Agency, who is authorised by the Paying

Agency, either generally or specifically, to act in matters arising

under these regulations<

“claimed bovine animals” means bovine animals subject

to a livestock aid application under the relevant aid schemes

established by regulations made under article 6 or 7 of the Act<

“computerised database” means the computerised database

referred to in point of this annex<

“crop group” in relation to the use of areas, means a set

of distinct parcels in the application that have the same relevant

cultivation for the purposes of the calculation of the financial

assistance under the relevant aid scheme designated by the

Minister under point 4 of this annex<

“Director” means the head responsible for agricultural

services, and includes and any person delegated by the head to

act on his behalf<

“farmer” means any person who is an agricultural

producer, whose holding is situated in Malta<

“Farmer Registration Card” means the registration card

issued by the Director to a farmer on the basis of the data

contained in the Agricultural Land Registration Records<

“forage area” means an area of land falling under such

description on an aid scheme established under the Act<

“holding” means all the production units situated in Malta

managed by the same farmer<

“integrated control system” means the integrated control

system as referred to in point 12 of this annex covering the aid

applications submitted, in particular as regards administrative

checks, on-the-spot checks and, if appropriate, verification by

aerial or satellite remote sensing<

“irregularity” means any infringement of, or non-

compliance with, the relevant rules for the granting of the aid

in question<

“livestock aid application” means an application for the

payment of financial assistance under aid schemes regarding

the livestock sector designated by the Minister under point 4 of

this Annex<

“Minister” means the Minister responsible for

agriculture<

“Paying Agency” means the Paying Agency established

by these regulations<

“reference parcel” is the parcel defined as such in the

Land Parcel Identification System (LPIS) adopted by the Paying

Agency for the purposes of the Act<

“retention period” means the period during which an

animal for which aid has been claimed has to be kept on the

holding as provided for under the relevant aid scheme

established under the Act<

“unclaimed bovine animals” means bovine animals not

yet subject to a livestock aid application but potentially eligible

for aid under the relevant aid scheme established under the

Act<

“use of area” means the use or uses of any area in terms of

the type of crop or ground cover or the absence of a crop as

referred to in the aid scheme established under the Act.

2. The identity of a farmer submitting an aid application shall

be established on the basis of the Farmer Registration Card issued

by the Director.

3. (1) For the purposes of this annex an agricultural parcel

shall be identified on the basis of the registration number attributed

to it in the Agricultural Land Registration.

(2) Area aid applications shall be furnished with such

particulars or accompanied by such documents as may be specified

by the Paying Agency, so as to enable each agricultural parcel to be

located and measured.

(3) For the purposes of these regulations, each forage area

must be available for rearing animals for a minimum period to be

determined in the aid schemes.

(4) There shall be no minimum size of an agricultural parcel

in respect of which an aid application may be made.

4. The system for the identification and registration of animals

to be taken into account for the granting of aid governed by this

annex shall be such system as may be established under the provisions

of the Veterinary Services Act, and recognised by the Paying Agency

for the purpose of this Annex.

5. (1) In order to be eligible under one or more aid schemes

governed by this annex, a farmer shall submit, for each year, an area

aid application to the Paying Agency on such form as is made

available to farmers by the Paying Agency>

Provided that such area aid application need not be submitted

in relation to such financial assistance as the Minister may by notice

in the Gazette exempt subject to any conditions, if any, attached to

such exemption by the terms of the relevant aid scheme.

(2) Where in any year an application is to be made by a

farmer who submitted an application in the previous year, an area

aid application need only contain changes with respect to the area

aid application submitted the previous year. In such cases, the forms

shall be made available from the Paying Agency, together with

graphic material based on the Agricultural Land Registration

Records, indicating the location of the areas for which an application

had been submitted previously.

(3) A farmer shall provide such supplementary

documentation as may be required by the Paying Agency for the

purposes of determining eligibility for financial assistance under the

relevant aid scheme.

(4) Area aid applications shall be submitted by the 30th

of March of each year>

Provided that where such date falls on a Saturday, Sunday or

other public holiday, such date shall be deemed to be the first

following working day not being a Saturday>

Provided further that where an area aid application is submitted

electronically in accordance with sub-point (2) of point 7 of this

Annex, the time limit for receipt shall be 11.59 pm on the latest

submission date.

(5) A farmer shall declare the kind of use of area of all

agricultural parcels in the reference parcels on the holding in the

area aid application in such manner as may be specified by the

relevant aid scheme >

Provided that the Minister may declare by Notice in the Gazette

that no declaration is to be made in respect of the use of area for

which a scheme is established by regulations made under the Act,

where such information is made available to the Paying Agency in

the framework of an administration and control system applicable

to that scheme which is compatible with the integrated administration

and control system established in this Annex.

(6) Subject to sub-point(8) hereof where this is permitted

by and made in accordance with the rules applicable to the aid scheme

concerned, after the expiry of the time limit for the submission of

area aid applications, a farmer may apply for individual agricultural

parcels not declared in the aid application to be indicated and to

have changes regarding the use or aid scheme to be made to the area

aid application.

(7) The addition of agricultural parcels and amendments

in accordance with sub-point(6) shall be notified to the Paying

Agency in writing by not later than the latest sowing date laid down

in the relevant aid scheme.

Provided that provisos to sub-point(4) hereof shall apply mutatis

mutandis in relation to the latest sowing date.

(8) Where the Paying Agency has already informed the

farmer of irregularities in the aid application or where it has given

notice to the farmer of its intention to carry out an on-the-spot check

as referred to in point 14 of this Annex and where this on-the-spot

check reveals irregularities, additions and amendments in accordance

with sub-points (6) and (7) of this point may not be made in respect

of the agricultural parcels affected by the irregularities.

(9) Any aid application in respect of an area payment

shall be made in compliance with the relevant aid scheme and any

other aid scheme which may be applicable on the basis of the

agricultural use of the area and the year in respect of which the

application is made>

Provided that in any given year no more than one application

for an area payment shall be made in respect of any cultivated parcel,

and no area payment shall be granted on any cultivated parcel which

is covered, in respect of the same year, by another application for

area based aid under an aid scheme for arable crops intended to

stabilise the agricultural market.

6. (1) In order to be eligible for financial assistance under

an aid scheme regarding the livestock sector, a farmer shall submit

an aid application to the Paying Agency on such form as is made

available to farmers by the Paying Agency.

(2) Livestock aid application shall be submitted by such

date as shall be set out by the conditions governing the relevant aid

scheme>

Provided that where a livestock aid application is submitted

electronically in accordance with sub-point (2) of point 7 of this

annex, the time limit for receipt shall be 11.59 pm on the latest

submission date.

(3) Without prejudice to any requirement under any other

law, no animal shall be move from one location to another during

the retention period unless the farmer has given advance notice in

writing to the Paying Agency of such movement>

Provided that where an animal is moved without advance notice

because of urgent circumstances, the notice shall be given to the

Paying Agency within 24hours of the movement.

(4) An animal keeper may request the Paying Agency to

furnish him with information on the data relating to him and his

animals kept in the computerised database set up under any system

for the identification and registration of animals referred to in point

4 of this Annex. The Paying Agency shall provide such information

at reasonable intervals and within a reasonable time.

(5) Where an animal keeper submits an aid application,

after having previously obtained the relevant information from the

Paying Agency as aforesaid, he shall declare that the data obtained

from the said database is correct and complete, or he shall rectify

any incorrect data or add missing data, as the case may be.

(6) Where the data kept in the computerised database

set up under any system for the identification and registration of

animals referred to point 4 of this annex has been communicated at

the request of the animal keeper to the Paying Agency before or at

the same time as a livestock aid application in respect of the animals

concerned is submitted, such data need not be included in the aid

application. In such case, the data contained in the said database

shall be used by the Paying Agency for the purpose of completing

the aid application.

7. (1) Where an aid application or amendments to it are Common

provisions

required under rules governing the aid scheme or by the Paying regarding aid

Agency to be accompanied by supplementary documentation, such applications.

documentation shall be considered part of the application.

(2) An aid application shall be received by the Paying

Agency within the time limit established for a particular aid scheme,

and where an application has been made electronically and

supplementary documentation is to be submitted, the time limit for

the submission of the complementary documentation shall be the

same time limit as afore- said.

(3) Where a farmer has submitted an aid application to the

Paying Agency, and in this application he has made an error>–

(a) the farmer shall request the Paying Agency to make

the necessary adjustment to rectify the error<

(b) If the Paying Agency discovers the error in the aid

application before the farmer who submitted the application has

applied for the adjustment of that error, the Paying Agency shall

inform the applicant accordingly< in such a case the farmer shall

request the Paying Agency to rectify the error.

(4) The Paying Agency may accept to rectify the error

and thereupon the benefits to which the farmer may lawfully qualify

under the said aid application shall not be prejudiced if the Paying

Agency is satisfied that the error was made buona fide and was not

due to gross negligence on the part of the applicant.

(5) A farmer may apply to the Paying Agency at any

time for his aid application to be withdrawn in whole or in part, and

in such case the applicant farmer shall be put in the position he was

in before he submitted the aid application or the part thereof so

withdrawn>

Provided that no withdrawal shall be allowed between the time

when the Paying Agency has given notice to the farmer of its

intention to carry out an on-the-spot check and the time when the

spot check is effectively carried out>

Provided further that no withdrawal shall be allowed in respect

of any part of the aid application where the Paying Agency has

discovered any irregularity in relation to such part after carrying out

the on-the-spot check .

8. (1) The Paying Agency shall keep and administer a

computerised database which shall contain all the data obtained from

the aid applications for aid schemes.

(2) The Paying Agency shall be responsible for the

processing of the data concerned, and for such purpose, the

computerised database shall be such so as to allow direct and

immediate consultation of the data, as available, relating at least to

the previous three consecutive years.

9. The Paying Agency shall be responsible for the setting up

and maintenance of the single integrated control system which is

herein established.

10. The Paying Agency shall carry out an administrative check

on every aid application received and every aid application shall be

subject to such verification and control as the Paying Agency may

deem necessary, and for such purpose the applicant shall allow the

Paying Agency or its lawful representative or delegate access to

premises and sites related to the application.

11. (1) The Paying Agency may delegate to any competent

person or specialised agency or firm such duties in relation to the

carrying out and co-ordination of checks to ensure effective

verification of compliance with the terms under which aid is granted

in terms of this annex.

(2) Notwithstanding any such delegation, the Paying

Agency shall retain control over and responsibility for such duties.

12. (1) On-the-spot checks shall be carried out by authorised On-the-spot

checks.

persons and shall cover a sample of agricultural holdings according

to a sampling plan drawn up for such purpose by the Paying Agency.

(2) Farmers in whose regard on-the-spot checks are to

be carried out shall be selected by the Paying Agency on the basis

of a risk analysis and in such manner that the sample selected shall

represent a fair cross-section of all forms>

Provided that a risk analysis shall not be carried out where the

on-the-spot control is being carried out by means or remote sensing,

and all farmers submitting aid applications and falling within the

respective zone are subjected to on-the-spot checks.

(3) An application shall be rejected if the applicant or

his representative prevents or hinders an on-the-spot check from

being carried out.

(4) Every on-the-spot check shall be the subject of a

control report.

(5) If the farmer or his representative is present during

an on-the-spot check, he shall be given the opportunity to sign the

control report referred to in sub-point (4) to attest his presence at

the check and to add any observations he may wish to make.

(6) Where the on-the-spot check reveals any irregularity

the applicant shall be given a copy of the control report. A copy of

such report shall also be given to the applicant if the irregularity is

revealed by remote sensing carried out in accordance with sub-point

(4) of point 13.

13. (1) Agricultural parcel areas shall be determined by such On-the-spot

checks of area aid

means as may be established by the Paying Agency to be appropriate> applications.

Provided that arable land shall also be taken into account in

the calculation of such areas.

(2) Where certain features, in particular hedges, ditches

and walls, are traditionally part of good agriculture cropping or

utilisation practices, the corresponding area is to be considered part

of the fully utilised area on condition that it does not exceed a total

width of two metres.

(3) The eligibility of agricultural parcels shall be verified

by such means as may be established as appropriate by the Paying

Agency and for such purpose the Paying Agency may require such

additional proof as it may consider necessary>

Provided that in whole or in part, the eligibility for payments

under an aid scheme shall be determined on the basis of the

measurements as are recorded in the Agricultural Land Registration

Records.

(4) On-the-spot checks in respect of area aid applications

may be carried out by way of remote sensing on all or part of the

sample referred to in sub-point (1) of point 12 to determine the area

of agricultural parcels, identify crops and verify their status.

14. (1) The eligibility for payments under an aid scheme

checks of livestock

regarding livestock shall be verified by such appropriate means as

may be established by the Paying Agency and for such purpose the

Paying Agency may require such additional proof as it may deem

necessary.

(2) Where on-the-spot checks are carried out in

conjunction with inspections pursuant to the Veterinary Services Act

in respect of the identification and registration of animals, the control

report referred to in sub-point (4) of point 12 shall be supplemented

by the reports in respect of those inspections.

(3) Where on-the-spot checks reveal cases of non-

compliance with the provisions made by or under the Veterinary

Services Act in respect of the identification and registration of

animals, a copy of the control report referred to in sub-point (4) of

point 14 of this Annex shall be sent without delay to the authority

responsible under the said Act.

(1) The amount of the aid to be granted shall be

calculated according to the provisions of the aid schemes, subject to

aid, reductions and

such reductions and exclusions as are applicable thereto.

(2)

Reductions or exclusions shall not apply>

(i) where the farmer can show that he submitted factually

correct information or where he proves that he has exercised

all due diligence in the submission of his application<

(ii) with regard to such parts of the aid application in

respect of which the farmer has informed the Paying Agency in

writing that the aid application is incorrect or has become

incorrect since it was submitted.

Notwithstanding the provisions of sub-point 2(i) above, the

application shall be adjusted to reflect the actual situation.

(3) In relation to area aid applications, calculations shall

be made for crop groups, in the appropriate manner as may be

determined by the Paying Agency>

Provided that, if the area of a crop group determined is found

to be greater than that declared in the aid application, the area

declared shall be taken for calculation of the aid.

(4) Where in relation to a livestock aid application a

difference is found between the number of animals declared and the

number of animals determined, any reductions and exclusions which

are applicable shall not apply where>

(a) owing to the impact of natural circumstances on the

herd or flock, the farmer cannot meet his commitment to keep

the animals in respect of which aid is claimed throughout the

retention period< and

(b) there has been a reduction in the number of animals

due to the following cases of natural circumstances of the herd

or flock, namely>-

(i)

death of an animal as a consequence of a disease<

(ii) death of an animal following an accident for

which the farmer cannot be held responsible>

Provided that, the farmer has informed the Paying Agency in

writing within ten working days of finding any reduction in the

number of animals.

(5) In relation to claimed bovine animals which are the subject

of an aid application, sub-point (1) and (2) hereof shall apply.

Reductions or exclusions shall also not apply in relation to any error

or omission in any of the entries in the computerised database referred

to in sub-point (6) of point 6 in this Annex.

(6) In relation to unclaimed bovine animals which are not the

subject of an aid application the reductions and exclusions applicable

in cases of non-compliance with the provisions of the system for the

identification and registration of bovine animals referred to in point

4, shall not apply if the farmer communicates amendments and

adjustments of entries in the computerised database referred to in

sub-point(6) of point 6 to the Paying Agency>

Provided that the communication by the farmer was made before

the farmer was informed of the Paying Agency’s intention to carry

out an on-the-spot check.

(7) Where environmental requirements, provided for under

any enactment containing environmental measures in relation to the

agricultural land used or production concerned, are not respected,

such reductions or cancellations of the benefits accruing from the

relevant aid schemes shall apply as provided under the Act or the

regulations as the case may be, containing the environmental

measures.

(1) Where a farmer has been unable to comply with his

obligations as a result of force majeure or any other exceptional

circumstance, he shall notify the Paying Agency in writing of the

occurrence of the force majeure or the exceptional circumstance

within ten days of the date on which the farmer is in a position to do

so and in the case of the death of a farmer such notification shall be

made within a reasonable time of the occurrence by the heirs.

(2) The notification in accordance with sub-point (1)

hereof shall be accompanied by such relevant information as the

Paying Agency may require.

(3)

For the purposes of this point exceptional

circumstances shall include>

(a)

the death of the farmer<

(b)

long-term professional incapacity of the farmer<

(c) a severe natural disaster gravely affecting the

holding’s agricultural land<

(d) the accidental destruction of livestock buildings on

the holding<

(e) an epizootic affecting part or all of the farmer’s

livestock.

(1) If undue payment is made, the farmer shall upon Recovery of undue

payments.

notification by the Paying Agency repay the amount unduly paid

together with interest calculated in accordance with sub-point (3)

hereof.

(2) Recovery of the undue payment is to be made by

deduction of the amount unduly paid from any advances or payments

otherwise payable to the farmer following the date of the decision

to recover under such aid scheme as referred to in sub-point (4)

hereof>

Provided that no such deduction shall be made if the farmer

has repaid the amount in question.

(3) Interest shall be charged at 6% and shall be calculated

for the period elapsing between the date of the notification of the

repayment obligation to the farmer and the date either of repayment

or of deduction as provided in sub-point (2) hereof.

(4) The repayment obligation referred to in sub-point (1)

hereof shall not apply if the payment was made through the error of

the Paying Agency itself or of another authority and if the error

could not reasonably have been detected by the farmer>

Provided that, where the error relates to factual elements

relevant to the calculation of the payment concerned, this sub-point

shall only apply if the decision to recover was not communicated

within twelve months of the payment.

(5) The repayment obligation referred to in sub-point (1)

hereof shall not apply if the period which elapsed between the date

of the payment of the aid and that of the first notification to the

beneficiary by the Paying Agency concerning the undue nature of

the payment concerned is more than ten years>

Provided that the period referred to in this sub-point shall be

limited to four years if the beneficiary acted in good faith.

(6) Amounts to be recovered as a consequence of the

application of reductions and exclusions referred to in sub-point(1)

of point 15 of these regulations shall be subject to a prescriptive

period of four years.

(7) The provisions of sub-point (4) and (5) hereof shall

not apply in the case of advances.

(1)

For the purposes of this point>

(a) the “transfer of a holding” includes the sale, lease or

any similar transfer in respect of the production units concerned<

(b) “transferor” means the farmer whose holding is

transferred to another farmer<

(c) “transferee” means the farmer to whom the holding

is transferred.

(2) Where a holding is transferred in its entirety from

one farmer to another farmer after an aid application has been lodged

and before all the conditions for granting the aid have been fulfilled,

no aid shall be granted to the transferor in respect of the transferred

holding.

(3) The aid applied for by the transferor shall be granted

to the transferee where>

(a) within ten working days from the date of the transfer

agreement the transferee notifies the Paying Agency of the

transfer and requests payment of the aid<

(b) the transferee presents such evidence as may be

required by the Paying Agency<

(c) all the conditions for granting the aid are fulfilled in

respect of the holding transferred.

(4) Once the transferee informs the Paying Agency of

the transfer of the holding and requests payment of the aid in

accordance with sub-point (3)(a) above and provided that the

transferee produces such evidence as may be required under sub-

point(3)(b)>

(a) all rights and obligations of the transferor resulting

from the legal relationship between the transferor and the Paying

Agency generated by the aid application shall be transferred on

the transferee<

(b) all actions necessary for the granting of the aid and

all declarations made by the transferor prior to the transfer shall

be attributed to the transferee for the purpose of applying the

relevant rules<

(c) the holding transferred shall be considered, if the case

so requires, as a separate holding in respect of the marketing

year or premium period in question.

(5) Where an aid application is lodged after the actions

necessary for the granting of the aid have been performed and a

holding is transferred in its entirety from one farmer to another farmer

after those actions have started but before all the conditions for

granting the aid have been fulfilled, the aid may be granted to the

transferee provided the conditions in sub-point (3) (a) and (b) hereof

are fulfilled. In which case, sub-point(4) (b) above shall apply.

(6) The Paying Agency may decide, if the case so

requires, to grant the aid to the transferor, in which event>

(a)

no aid shall be granted to the transferee< and

(b) the requirements set out in sub-points (2) to (5) hereof

shall apply mutatis mutandis.

Any information given or collected by virtue of this annex Confidentiality.

shall be treated as confidential and shall not be disclosed except for

the purposes of this annex or as may be required under any other

law where provision is made for such disclosure.

(1) An authorised person may at any reasonable time Power of

authorised

and on producing, if so required, a duly authenticated document persons.

showing his authority, exercise the powers specified in this point

for the purposes of -

(a) carrying out any check, test, verification, inspection,

control or other operation in relation to land and livestock

required under this annex< or

(b) ascertaining whether an irregularity under this annex

has been or is being committed.

(2) In the exercise of his powers as afore said, the

authorised person may enter –

(a) any slaughterhouse or any premises where loading

operations are carried out, and where animals are kept to which

any of the aid schemes may apply or where the authorised person

has reasonable cause to believe that such animals are kept< and

(b) any premises which are, or which are believed to be,

in the possession of a farmer, or employee or representative of

a farmer.

(3) An authorised person who has entered any premises

by virtue of this point may-

(a) inspect all or any part of the land farmed, laid fallow

or withdrawn from agricultural production by a farmer< and

(b)

inspect any crops growing on that land or kept on it<

and

(c) inspect any of the animals to which any of the aid

schemes apply or may become applicable.

(4) An authorised person entering any premises by virtue

of this point may take with him such other person, as he considers

necessary or as may be required.

(5) Where the Paying Agency, in exercising its control

over any person or specialised agency or firm as referred to in sub-

point (1) of point 12, carries out any inspection or check, the official

of the agency carrying out such inspection or check shall be

accompanied by an authorised person.

(1) No person shall refuse entry to an authorised officer

exercising his power under point 20 of this annex.

(2) Any farmer or any employee or other person

representing such farmer shall during any inspection or verification,

or at any such time as may be required give to an authorised person

all the assistance and any information as the authorised person may

reasonably require so as to enable him to exercise his duties in

relation to any power conferred upon him by the point 20 of this

annex.

Mitbug[ fl-Istamperija tal-Gvern — Printed at the Government Printing Press