11.—(1) Paragraph (2) applies where Ministers have approved an application (in whole or in part) under regulation 6(2) and Ministers think–
(a)the applicant has given information on any matter relevant to the giving of approval or the making of payment of grant under these Regulations, which is false or misleading in a material particular;
(b)any condition subject to which the approval was given, or the grant has been paid, has not been complied with;
(c)the project in respect of which the approval was given, or the grant was paid, has not been carried out or has not been carried out in accordance with the application approved by Ministers;
(d)the project has been or is being unreasonably delayed beyond the time limits contained in any condition subject to which approval has been given, or grant paid, under these Regulations, or is unlikely to be completed;
(e)the project was commenced before the date on which Ministers gave written permission to do so;
(f)the European Commission has decided that the grant paid, or to be paid, does not comply with the Community legislation;
(g)public funds in excess of those permitted under these Regulations have been applied to the project; or
(h)the applicant, or an employee, agent or servant of the applicant, has–
(i)intentionally obstructed any authorised person in exercise of the powers under regulation 10;
(ii)failed to comply with a requirement imposed under regulation 10(4)(b) to (e); or
(iii)failed to give assistance under regulation 10(5).
(2) Where this paragraph applies, Ministers may–
(a)apply a reduction to any payment made, or to be made, to the applicant;
(b)revoke or vary (including any conditions subject to which it was given) the approval in respect of the whole or any part of the approved expenditure;
(c)withhold payment of grant in whole or in part;
(d)on demand, recover as a debt the whole or any part of the grant which has been paid.
(3) Where paragraph (2) applies, and Ministers also think that the applicant acted recklessly or intentionally, they may also–
(a)require the applicant to pay an additional sum equal to 10% of the sums paid or payable to the applicant under these Regulations;
(b)prohibit the applicant from applying for grant under these Regulations for such period (not exceeding two years) from the date of the revocation of approval of any payment under these Regulations as Ministers may specify.
(4) But, before Ministers do anything under paragraphs (2) or (3), they must–
(a)give the applicant in respect of whom such a step is proposed to be taken, written notification of that step and, if appropriate, the amount by which it is proposed that the grant be reduced or the amount of such grant which it is proposed be withheld or recovered;
(b)give that applicant an opportunity to make representations about the proposed step, within such time and in such form as they think fit; and
(c)consider such representations.
(5) A reduction under paragraph (2)(a) must be applied in accordance with the Control Regulation.