Division 3 APPLICATION AND EFFECT OF NET FINANCIAL CORRECTIONS

Where the Member State made the financial correction proposed in the procedure under Article 26(2) of Decision 2004/904/EC, the Commission need not impose a net reduction in the funding, but may allow the Member State to reallocate the sums released. However, financial corrections imposed by the Commission under Article 26(2) of Decision 2004/904/EC after completion of the procedure laid down by Article 26(3) and (4) of the same Decision will in all cases involve a net reduction in the indicative allocation of assistance from the Fund.

A net correction is automatically made if the Commission considers that the Member State has not taken satisfactory account of conclusions on irregularities detected by Community or national bodies and/or if the irregularity is related to a serious deficiency in the management or control system of the Member State or of the management or payment authorities.

Any sum due to the Commission as a result of net corrections is to be paid together with interest under Article 26(4) of Decision 2004/904/EC and in accordance with Article 3(1) of this Decision.