The Commission shall clear all amounts declared in the accounts where there is no doubt on the completeness, accuracy and veracity in the accounts submitted

The Commission may require further information because of incomplete or unclear information provided, disagreements, differences of interpretation or any other inconsistency relating to a request for payment.

The Member State concerned shall, upon request by the Commission, provide additional information by the deadline set in that request. In justified cases, on request by the Member State before the expiry of the deadline, the Commission may accept a request for late submission of information and set a new deadline.

Where the Member State concerned fails to provide the additional information by the deadline or if the response is unsatisfactory the Commission may proceed with the clearance decision on the basis of the information in its possession.

The Commission shall inform the Member State of its decision on the payment of the annual balance, including the reasons for any accounts or amounts in the accounts not paid.

Where accounts or amounts in the accounts are not paid by the Commission, the Member State may submit additional information for the accounts or amounts to be reconsidered in subsequent financial years.

Where the amount accepted by the Commission in the decision on the clearance of annual accounts for financial year N is lower than the annual pre-financing amount for financial year N, the latter amount shall be cleared against the former. Any outstanding pre-financing amount shall be cleared in the course of subsequent clearance exercises.

The first subparagraph shall apply also in cases where a Member State submits annual accounts reporting zero payment.

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Paragraphs 1 to 5 of this Article shall apply, mutatis mutandis, to amounts recovered.

When the Commission considers that expenditure was not in compliance with Union and national rules, it shall notify its findings to the Member State concerned, specifying the corrective measures needed in order to ensure future compliance, and indicating the level of financial correction it considers to correspond to its findings.

That notification shall be made in accordance with Article 47(5) of Regulation (EU) No 514/2014 and make a reference to this Article.

The Commission shall formally communicate its findings to the Member State on the basis of the information received in the framework of the conformity clearance procedure.

After having communicated its findings to the Member State, the Commission shall adopt, where appropriate, one or more decisions under Article 47 of Regulation (EU) No 514/2014 in order to exclude from Union financing any expenditure affected by the non-compliance with Union rules.

The Commission may pursue consecutive conformity clearance procedures until the Member State has implemented the corrective measures.

The Commission's assessment shall cover the internal control environment of the national programme, the management and control activities of the Responsible Authority, and the control and audit activities of the Audit Authority and shall be based on verification of compliance with the key requirements set out in Table 1 of the Annex.

Compliance with the key requirements referred to in paragraph 1 according to the categories set out in Table 2 of the Annex shall be used to assess the effective functioning of each competent authority and to reach an overall conclusion on the management and control system. Any mitigating or aggravating factors shall be taken into account in the overall conclusion on the management and control system.

Wherever it is assessed that any of the key requirements 2, 4, 5, 8, 11, 12 or 14 in Table 1 of the Annex, or two or more of the other key requirements in that Table fall into categories 3 or 4 set out in Table 2 of the Annex, it shall be considered as a type of serious deficiency in the effective functioning of the management and control system.

The Commission shall apply financial corrections where it identifies one or more individual or systemic irregularities or one or more deficiencies in the effective functioning of the management and control system ( ‘ system deficiencies ’ ).

For the purpose of this Regulation, an irregularity means any infringement of Union or national law or any infringement of national rules resulting from an act or omission by a beneficiary or beneficiaries which has, or would have, the effect of prejudicing the general budget of the European Union by charging to it an unjustified item of expenditure.

The amount of the financial correction shall be determined on a case-by-case basis wherever possible and shall be equal to the exact amount of expenditure wrongly charged to the general budget of the Union.

Where the Commission identifies irregularities in a representative sample of expenditure in all or part of a national programme, but it is not cost-effective to verify the regularity of the other expenditure, the correction may be determined by extrapolating the results of the examination of the sample to the rest of the population from which it was drawn.

Where the Commission identifies systemic irregularities or system deficiencies but where it is not possible, even by extrapolation, to quantify the correction precisely, a flat-rate financial correction shall be applied to the expenditure declared for the part of the system affected in accordance with the indicative criteria and scales set out in paragraphs 2 and 3.

Flat-rate corrections may also be applied in respect of individual irregularities.

Where, due to a competent authority's failure to take adequate corrective measures following the application of a financial correction in a financial year, the same irregularity or irregularities or deficiency or deficiencies is/are identified in a subsequent financial year, the rate of flat rate correction may, due to the persistence of the irregularity or irregularities or deficiency or deficiencies, be raised to a level not exceeding the next level in the scale set out in paragraph 3.