Brussels, 30/10/2001 (Agence Europe) - As part of the first phase of the accounts clearance decision (informal phase involving written communications), the Commission experts who manage the procedure (the Accounts Clearance Unit) have told Spain that given the seriousness of the case (of EU budget fraud involving aid for Spanish flax farmers), it merited the levying of a fine of 100% of the aid granted between 1996 and 1999 (and maybe 2000 too). Franz Fischler's spokesperson explained that this stage simply involved preliminary recommendations rather than an official notification by the Commission of the exact amount of aid to be recovered in Spain, contrary to what most Spanish papers had reported over the weekend. Michaele Schreyer's spokesperson signalled that he could not confirm the size of the reimbursements that had been reported in the media (21 billion pesetas or EUR 126 million for 1996-1999).
Spain now has six weeks in which to reply to the letter from the Commission's experts. It can make use of a conciliation procedure if it decides to challenge the findings of the controls carried out by the Commission. The aim of the procedure (which is used to avoid sending disputes to the Court of Justice, Ed) is to try and find convergence between the two sides at a conciliation committee made up of five independent people appointed by the Commission. The procedure can last up to 4 months, and it is only after its completion that DG Agriculture will transmit a proposal to the College of Commissioners (the College's decision can be challenged by taking it to the Court of Justice). EUROPE would like to point out that the view taken by the conciliation committee on the accounts clearance procedure has no bearing on the Commission's final decision.
Mr Fischler's spokesperson noted that the total amount of EU subsidies granted to Spanish flax farmers was EUR 171 million over the 1996-2000 period, EUR 8.8 million in 1996, 31 in 1997, 32 in 1998, 40 in 1999 and 60 in 2000. He added that the requests for aid had sharply fallen off in 2001 (due to the reform of the flax and hemp markets). The Spanish Agriculture Minister Miguel Arias Canete said that Spain would only be prepared to accept "justified" financial corrections of less than 30% of the total aid received rather than the 100% suggested by the Commission experts.
Importance of OLAF's role
The written recommendations sent to Spain by the Accounts Clearance Unit were inspired by the findings of the enquiries carried out by OLAF, the European Anti-Fraud Office, that ended part way through March 2001 (see EUROPE of 20 and 21 March). In its most recent activity report (see EUROPE of 22/23 October, p.12), OLAF dedicates a chapter to the Spanish case, noting that most of the alleged irregularities concern overdeclaration of the amount of flax straw produced from land given over to flax and the presentation of false processing declarations certified by the flax processing plants. During the period under investigation, Spain received over EUR 100 million in funding, signals OLAF, which points out that its investigation has been extended to a Belgian player connected with the Spanish processors, and that other investigations were being carried out in Portugal and the United Kingdom. OLAF's activity report concludes that its investigation illustrated the complex nature of the activities to be carried out - recovering aid from operators, financial corrections to be made to Member States' aid, and providing legal assistance for the relevant national authorities when corruption is alleged.