The European Court of Auditors (ECA) published a special report on recovery of undue payments made under the Common Agricultural Policy (CAP). On the report it draws the conclusion that overall, whilst recovery of new debts by Member States and supervision by the Commission have improved since the new regulatory framework was introduced in 2006, certain weaknesses remain.

The assessment done by the ECA on recovery of undue payments made under the Common Agricultural Policy (CAP) shows that in general terms, Member States process and record debts in accordance with the rules and requirements. However, there are sometimes significant differences in the interpretation of the regulations. Therefore, there are certain weaknesses remaining whilst recovery of new debts by Member States and supervision by the Commission have improved since the new regulatory framework introduced in 2006. The ECA recently issued another report on the agri-environment support funding.

On the other hand, ECA observed that Member States are now recovering a greater proportion of new debts, although the ECA notes that the amounts being recorded as new debts have reduced. They generally write off debts in accordance with the rules, however a lack of clarity in these rules means that there are considerable differences in the circumstances in which this happens. In particular, the point in the insolvency procedure where write off occurs can differ between Member States.

In addition, the ECA also concluded that approximately 90% of the amounts reported in the EU annual accounts as “recoveries of undue payments” were those made by the Commission through deductions from the Member States and not actual recoveries of the unduly paid aid from beneficiaries. This procedure protects the financial interests of the EU but without the full deterrent effect of a recovery made from an unduly paid beneficiary.

Bearing in mind the above conclusions, ECA makes a series of recommendations in its special report to improve debt recovery. Among them, that the Commission should further improve the way in which debts in the Member States are managed and reported upon to ensure a consistent treatment of those debts across all Member States, and to consider how to recover a greater proportion of undue payments from beneficiaries.