SECTION 4 Clearance of accounts and financial corrections

Article 44Request for payment of the annual balance1.

By 15 February of the year following the financial year, each Member State shall submit to the Commission the documents and information required under Article 59(5) of Regulation (EU, Euratom) No 966/2012. The documents submitted shall serve as the request for payment of the annual balance. The deadline of 15 February may be exceptionally extended by the Commission to 1 March at the latest upon communication from the Member State concerned. Member States may, at the appropriate level, publish that information.

The Commission may ask a Member State to provide further information for the purpose of the annual clearance of the accounts. If a Member State does not provide the requested information by the deadline for its submission set by the Commission, the Commission may take its decision on the clearance of the accounts on the basis of the information in its possession.

The Commission shall adopt, by way of implementing acts, the models according to which the documents referred to in paragraph 1 shall be drawn up. Those implementing acts shall be adopted in accordance with the advisory procedure referred to in Article 59(2).

Article 45Annual clearance of accounts1.

By 31 May of the year following the financial year, the Commission shall decide on the clearance of the annual accounts for each national programme. The clearance decision shall cover the completeness, accuracy and veracity of the annual accounts submitted and shall be without prejudice to any subsequent financial corrections.

The Commission shall, by way of implementing acts, lay down the arrangements for the implementation of the annual clearance of accounts procedure, as regards the measures to be taken in connection with the adoption of the decision and its implementation, including on the exchange of information between the Commission and the Member States and the deadlines to be respected. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 59(3).

Article 46Financial corrections by Member States

Member States shall make the financial corrections required in connection with individual or systemic irregularities detected under the national programmes. Financial corrections shall consist of cancelling all or part of the contribution from the Union budget concerned. The Member States shall take into account the nature and gravity of the irregularities and the financial loss to the Union budget and shall apply a proportionate correction. Amounts cancelled and amounts recovered, as well as the interest thereon, shall be reallocated to the national programme concerned, excluding the amounts resulting from irregularities identified by the Court of Auditors and the Commission services, including OLAF. After the closure of the national programme, the Member State concerned shall refund the sums recovered to the Union budget.

Article 47Conformity clearance and financial corrections by the Commission1.

The Commission shall make financial corrections by cancelling all or part of the Union contribution to a national programme and effecting recovery from the Member State concerned in order to exclude from Union financing any expenditure which is in breach of applicable law, including in relation to deficiencies in the management and control systems of Member States which have been detected by the Commission or the Court of Auditors.

A breach of applicable law shall lead to a financial correction only in relation to expenditure which has been declared to the Commission and where one of the following conditions is met:

(a)

the breach has affected the selection of a project under the national programme, or, in cases where, due to the nature of the breach, it is not possible to establish that impact, there is a substantiated risk that the breach has had such an effect;

(b)

the breach has affected the amount of expenditure declared for reimbursement by the Union budget, or in cases where, due to the nature of the breach, it is not possible to quantify its financial impact, but there is a substantiated risk that the breach has had such an effect.

When deciding on a financial correction under paragraph 1, the Commission shall respect the principle of proportionality by taking account of the nature and gravity of the breach of applicable law and its financial implications for the Union budget.

Before the adoption of any decision to refuse financing, the findings from the Commission and the Member State’s replies shall be notified in writing, following which the two parties shall attempt to reach agreement on the action to be taken.

Financing may not be refused for:

(a)

expenditure which is incurred by the Responsible Authority more than 36 months before the Commission notifies the Member State in writing of its findings;

(b)

expenditure on multiannual actions within the scope of the national programmes, where the final obligation on the beneficiary occurs more than 36 months before the Commission notifies the Member State in writing of its findings;

(c)

expenditure on actions in national programmes, other than those referred to in point (b), for which the payment or, as the case may be, the final payment, by the Responsible Authority, is made more than 36 months before the Commission notifies the Member State in writing of its findings.

The Commission shall, by way of implementing acts, lay down the arrangements for the implementation of the conformity clearance as regards the measures to be taken in connection with the adoption of the decision and its implementation, including the information exchange between the Commission and the Member States and the deadlines to be respected. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 59(3).

Article 48Obligations of Member States

A financial correction by the Commission shall not prejudice the Member State’s obligation to pursue recoveries under point (h) of Article 21 of this Regulation and to recover State aid within the meaning of Article 107(1) TFEU and under Article 14 of Council Regulation (EC) No 659/1999

Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article 108 of the Treaty on the Functioning of the European Union (OJ L 83, 27.3.1999, p. 1).

Article 49Repayment1.

Any repayment due to be made to the Union budget shall be made before the due date indicated in the order for recovery drawn up in accordance with Article 80 of Regulation (EU, Euratom) No 966/2012. That due date shall be the last day of the second month following the issuing of the order.

Any delay in making repayment shall give rise to interest on account of late payment, starting on the due date and ending on the date of actual payment. The rate of such interest shall be one-and-a-half percentage points above the rate applied by the European Central Bank in its main refinancing operations on the first working day of the month in which the due date falls.