Modelo Temaguide

2.201. The export refund system, costing the EU tax- payer some 5 billion euro each year, provided for refund rates for certain products to be differentiated bydestina- tion, as long as satisfactoryevidence (proof of arrival) was presented that the goods had been placed on the market at the declared destination.

2.202. In 1992 the Commission provided a catalogue of model proofs to assist Member States in checking proofs of arrival, but this was not subsequentlyupdated. Large disparities were found between Member States as regards these checks.

2.203. Although the Commission had not undertaken a general audit of the proof of arrival system, it had identified major weaknesses in Member State checks at the time of export, resulting in financial corrections amounting to 188 million euro.

2.204. Some Member States had not carried out required audits of approved supervisorycompanies. Where such audits occurred, serious shortcomings and irregularities were detected, although these were not always satisfactorily followed-up.

The results of the study should be available at the end of 2001. A number of points being prepared could prove useful in preparing the report required by Regulation (EC) No 1868/94 which the Commission will present to the Council by 31 October 2001. The report will cover the allo- cation of the potato starch quota in the Community and any proposals required.

2.202. The system selected to prove importation from a non-member country is based mainly on documentation issued by the public authorities, such as customs import documents. In 1992, a catalogue of forms and customs stamps valid in 59 non-member countries was made available to the Member States. The Commission supports the idea of considering whether a catalogue could be prepared, at least for certain countries, and kept permanently up to date.

2.203. Although the Commission has not undertaken a general audit of the proof of arrival system, it has undertaken a specific audit of proofs of arrival issued by supervisory com- panies in Germany, which de factowas the only Member State accepting such certificates on a large scale. This resulted in a financial correction of some EUR 20 million.

2.204. Approval of and checks on the operations of surveil- lance companies are a matter for the Member States. How- ever, if a Member State decides to withdraw the approval it had granted to a surveillance company, the Commission noti- fies the other Member States, explaining the reasons which led the Member State to withdraw its approval, if it knows them. Furthermore, when the Commission was informed that a Member State has withdrawn approval of a surveillance com- pany which was part of a group, it asked the other Member States which had subsidiaries of that group approved on its territory to check whether the same shortcomings existed there. The approval conditions for surveillance companies will be evaluated during the ongoing audit (started in May 2001) on differentiated refunds carried out under the clearance of accounts.

2.205. Although a keyrole in monitoring arrival of the exported goods was assigned to Member States’ embassies in third countries, Member States did not issue guidelines on checks to be carried out before issu- ing certificates of unloading. Physical checks at the time of unloading were rarelyperformed.

2.206. OLAF and DG AGRI had detected or caused to be detected a number of serious irregularities and sus- pected frauds in some of the most important export destinations. Supervisorycompanies were implicated in some cases. The Court’s audit uncovered further sus- pected irregularities and instances where the justifica- tion for payment of refunds to certain destinations is questionable. The suspected irregular payments referred to in this report amount to some 100 million euro. 2.207. The system of proofs of arrival includes a com- pliance cost burden on administrations and trade alike, and provides minimal assurance. The Court recom- mended that proofs of arrival should onlybe required in cases of doubt, or for high risk destinations but that a posteriorichecks byMember States on placing on the market should be intensified and should include con- sultation of shipping and container movement data- bases and records held byhauliers for all transactions selected for audit. If the requirement for the systematic presentation of proofs of arrival were maintained, the Court recommended that the existing system for vali- dating proofs of arrival and for authorising supervisory companies and Member States’ embassies to issue such proofs should be considerablystrengthened.

2.205. Unloading certificates issued by the embassies are just one of the proofs allowed by the rules for obtaining pay- ment of the refund. Article 16 of Regulation (EC) No 800/1999 contains an exhaustive list of the various proofs which may be used.

2.206. According to the information received from the Court, the amount relates basically to suspected irregularities established in one Member State in the period 1994-1996 (EUR 60 million) and to irregular exports to Iraqafter the introduction of the embargo in 1991 (about EUR 40 mil- lion). The cases are pursued by the Commission, and they are followed up in accordance with the rules. In the other cases appropriate action will be taken by the Commission. 2.207. Relaxing the conditions for presenting proofs of arrival in the way recommended by the Court is not workable, because, requiring proof of arrival only in cases of doubt, or for high risk destinations, would create a potential risk of los- ing control of exports to countries for which an export refund is not fixed. Furthermore, it would entail increasing risks of fraud and irregularities. It would also expose the Community to fundamental criticism in the way the EU monitors and controls its subsidised trade with third countries, particularly taking into consideration the international undertakings to refrain from granting an export refund for specific markets. The Commission will discuss with the services responsible for a posteriorichecks how to include consultation of shipping and container movement databases in the audit programmes. The Commission will also consider a system which would make the surveillance companies assume their responsibilities more fully. In this regard, it will discuss with the Member States the possibility of making approval of such companies subject to provision of a guarantee

2.206 to 2.211. The special report on export refunds does not use the words ‘serious abuse’; it refers to ‘suspected irregu- larities and instances where the justification for payment of refunds is questionable’.

Common elements among findings and conclusions in