TITLE IV

CONTROL SYSTEM AND ADMINISTRATIVE PENALTIES IN RELATION TO CROSS-COMPLIANCE
CHAPTER II

CALCULATION AND APPLICATION OF ADMINISTRATIVE PENALTIES

Calculation and application of administrative penalties in the case of negligence
Article 39
1.
Where a non-compliance determined results from the negligence of the beneficiary, a reduction shall be applied. That reduction shall
, as a general rule, be 3 %
be a percentage
of the total amount resulting from the payments and annual premiums indicated in Article 92 of Regulation (EU) No 1306/2013.
However, the
The
paying agency may, on the basis of the assessment of the importance of the non-compliance provided by the competent control authority in the evaluation part of the control report taking into account the criteria referred to in Article 38(1) to (4), decide
either to reduce that percentage to 1 % or to increase it to 5 %
that the percentage reduction will be 1%, 2%, 3%, 4% or 5%
of the total amount referred to in the first subparagraph or, in the cases where provisions relating to the requirement or standard in question leave a margin not to further pursue the non-compliance found or in the cases for which support is granted according to Article 17(5) and (6) of Regulation (EU) No 1305/2013, not to impose any reductions at all.
2.
Where a
relevant authority
decides not to apply an administrative penalty pursuant to Article 97(3) of Regulation (EU) No 1306/2013 and the beneficiary has not remedied the situation within a deadline set by the competent authority, the administrative penalty shall be applied.
The deadline set by the competent authority shall not be later than the end of the year following the one in which the finding was made.
3.
Where a
relevant authority
makes use of the option provided for in the second subparagraph of Article 99(2) of Regulation (EU) No 1306/2013 and the beneficiary has not remedied the situation within a deadline set by the competent authority, a reduction of at least 1 % as provided for in paragraph 1 of this Article shall be applied retroactively in relation to the year of the initial finding when the early warning system was applied, if the non-compliance is found not to have been remedied during a maximum period of three consecutive calendar years calculated from and including that year.
The deadline set by the competent authority shall not be later than the end of the year following the one in which the finding was made.
A non-compliance which has been remedied by the beneficiary within the deadline set shall not be considered as a non-compliance for the purpose of establishing reoccurrence in accordance with paragraph 4.
4.
Without prejudice to cases of intentional non-compliance, the reduction to be applied in respect of the first reoccurrence of the same non-compliance in accordance with paragraph 1 shall be multiplied by the factor three.
In case of further reoccurrences, the multiplication factor three shall be applied each time to the result of the reduction fixed in respect of the previous reoccurrence. The maximum reduction shall, however, not exceed 15 % of the total amount referred to in paragraph 1.
Once the maximum percentage of 15 % has been reached, the paying agency shall inform the beneficiary concerned that if the same non-compliance is determined again, the beneficiary shall be considered to have acted intentionally within the meaning of Article 40.
Once the maximum percentage of 15% has been reached, the paying agency shall inform the beneficiary concerned that if the same non-compliance is determined again, the beneficiary shall be considered to have acted intentionally within the meaning of Article 40.
Words in Art. 39(2) substituted (31.1.2020 in so far as it relates to the Common Agricultural Policy direct payment schemes) by The Financing, Management and Monitoring of Direct Payments to Farmers (Amendment) Regulations 2020 (S.I. 2020/90), regs. 1(2), 15(23); and words in Art. 39(2) substituted (31.12.2020 for the purposes of common organisation of the markets and rural development measures) by The Common Agricultural Policy (Financing, Management and Monitoring Supplementary Provisions) (Miscellaneous Amendments) (EU Exit) Regulations 2019 (S.I. 2019/765), regs. 1, 6(25); 2020 c. 1, Sch. 5 para. 1(1)
Words in Art. 39(3) substituted (31.1.2020 in so far as it relates to the Common Agricultural Policy direct payment schemes) by The Financing, Management and Monitoring of Direct Payments to Farmers (Amendment) Regulations 2020 (S.I. 2020/90), regs. 1(2), 15(23); and words in Art. 39(3) substituted (31.12.2020 for the purposes of common organisation of the markets and rural development measures) by The Common Agricultural Policy (Financing, Management and Monitoring Supplementary Provisions) (Miscellaneous Amendments) (EU Exit) Regulations 2019 (S.I. 2019/765), regs. 1, 6(25); 2020 c. 1, Sch. 5 para. 1(1)
Words in Art. 39(1) substituted (E.) (1.1.2021) by The Direct Payments to Farmers and Cross-Compliance (Simplifications) (England) (Amendment) Regulations 2020 (S.I. 2020/1387), regs. 1(1), 7(8)(a)
Word in Art. 39(1) substituted (E.) (1.1.2021) by The Direct Payments to Farmers and Cross-Compliance (Simplifications) (England) (Amendment) Regulations 2020 (S.I. 2020/1387), regs. 1(1), 7(8)(b)(i)
Words in Art. 39(1) substituted (E.) (1.1.2021) by The Direct Payments to Farmers and Cross-Compliance (Simplifications) (England) (Amendment) Regulations 2020 (S.I. 2020/1387), regs. 1(1), 7(8)(b)(ii)
Title 4 Ch. 2 revoked (E.) (1.1.2024) by The Agriculture (Removal of Cross-Compliance and Miscellaneous Revocations and Amendments, etc.) (England) Regulations 2023 (S.I. 2023/816), reg. 1(1), Sch. Pt. 1 para. 1 Table 1 (with Sch. Pt. 2 para. 2)
Words in Art. 39(4) inserted (N.I.) (1.1.2025) by The Direct Payments to Farmers (Cross-Compliance) (Amendment) Regulations (Northern Ireland) 2024 (S.R. 2024/211), regs. 1(1), 2 (note that the inserted words replicate the third subparagraph in Art. 39(4), which was previously revoked in relation to N.I. by S.R. 2022/240, reg. 2)